BRLT

Good day, and thank you for standing by. Welcome to the Brilliant Earth first quarter 2026 earnings call. At this time all participant are in a listen only mode. After the speakers presentation there will be a question and answer session to ask a question you need to press star one one on your telephone you will then hear an automated advicing your hand is raised to withdraw you question please press one one again. Please be advice that this conference is recorded. I would now like to hand the conference over to your first speaker today, Colin Bourland. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to the Brilliant Earth first quarter 2026 earnings conference call. My name is Colin Bourland, Vice President of Strategy, Business Development, and Investor Relations. Joining me today are Beth Gerstein, our Chief Executive Officer, and Jeffrey Kuo, our Chief Financial Officer. During the call today, management will make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Please refer to our SEC filings for a description of the risks that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. These forward-looking statements reflect our opinion only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events, unless required by law.

Also, during this call, management will refer to certain non-GAAP financial measures. A reconciliation of Brilliant Earth's non-GAAP measures to the comparable GAAP measures is available in today's earnings release, which can be found on the Brilliant Earth Investor Relations website. I'll now turn the call over to Beth.

Good afternoon, everyone, and thank you for joining us. We're pleased to report a strong start to 2026, with first quarter results that reflect the disciplined execution of our growth strategy. Net sales grew approximately 6% year-over-year to $99.5 million at the high end of our guidance range. The quarter's strong performance was driven by total orders growing 3% year-over-year, without performance in repeat orders and year-over-year growth in average selling prices across the assortment. Fine jewelry was a clear standout, with bookings growing 33% year-over-year and making up 17% of total bookings. In addition, we're particularly pleased with the impressive year-over-year bookings growth in wedding and anniversary bands in Q1.

We delivered gross margin within our mid-50s target, year-over-year marketing leverage, and prudent OpEx management resulting in our adjusted EBITDA landing in the upper half of our guidance range. These results underscore our ability to execute with discipline while investing in the growth drivers that are building Brilliant Earth into a leading jewelry brand in the $350 billion jewelry industry. Let me take you through some of the highlights of the quarter. What I am most proud of this quarter is the ongoing strength and resonance of our brand.

Valentine's Day was a record, with bookings up 9% year-over-year during the two-week peak shopping period. Our Perfect Timing campaign celebrated how chance encounters become the unexpected beginnings of lasting love stories. This campaign drove triple-digit year-over-year growth in organic social engagement, reflecting the power of compelling storytelling to drive both engagement and sales throughout this traditional gifting period. Valentine's Day is yet another demonstration of our team's ability to execute with excellence around key gifting moments, and we head into Mother's Day and other gifting occasions with that same momentum.

In January, we also introduced a new concept we call Bridal Collective, creator-hosted events in our New York and Beverly Hills locations, showcasing our position as bridal leaders and the experiential aspects of our showrooms. The Bridal Collective series turned our showrooms into a social media destination for fine jewelry discovery and live styling, reaching a style-savvy bridal audience and generating over 150 pieces of organic content across 41 creators.

We believe this proves that as desire for more physical retail experiences grows among consumers, Brilliant Earth is uniquely positioned to lead the next chapter of luxury jewelry retail. Our omni-channel experience also continues to set us apart. We ended the quarter with 42 showrooms and are planning for two more in San Antonio, Texas, and San Jose, California, by the end of the year as we continue to thoughtfully expand our footprint. Growing our physical presence and creating joyful, personalized shopping experiences has been a key strategic priority since we began.

One of the opportunities that excites me most, though, is how well this strategy amplifies our fine jewelry growth. As our retail execution has evolved, we've been intentional about building our showrooms into a true destination for fine jewelry. That strategy is working. This quarter, fine jewelry bookings in showrooms grew 48% year-over-year, outpacing the total assortment growth. While that is impressive on its own, I'm even more encouraged by the long-term performance. In Q3 2024, we introduced our first fine jewelry try-on bar, and soon after, we began adding them in new and existing showrooms.

In the 18 months following, fine jewelry bookings from showrooms have nearly doubled compared to the preceding 18-month period. These are the kinds of results and learnings that guided our most recent opening, our Beverly Hills flagship location, which we opened in January. So far, the flagship is delivering very strong retail orders and foot traffic with exceptional customer sentiment. We've introduced a number of new elements to our customer experience in Beverly Hills, including our Date Night experience, a fun hospitality-infused adaptation of our personalized bridal shopping appointment.

Date Night has proven to be incredibly popular and is typically booked multiple weeks in advance. We continue to see our Beverly Hills flagship concept as a blueprint for the future of modern luxury jewelry retail. We're also encouraged by what we see in our product assortment. Average selling prices are up meaningfully across the assortment, reflecting a growing customer appetite for quality, thoughtfully designed jewelry at elevated price points. This is a consistent trend we're seeing in the industry, and we are well-positioned with a premium brand, a design-forward assortment, and long-term customer relationships we've cultivated for over two decades.

As I mentioned, fine jewelry is driving increased diversification, outperforming the business, and is well on a path toward becoming a $100 million business. Further, we've been intentional about elevating our product assortment and strategically focusing on attracting new customers at higher price points. As a matter of fact, in Q1, we acquired nearly 40% more new fine jewelry customers whose first purchase was $500 or more compared to Q1 last year. We're pleased with the broad demand we're seeing for both our Diamond Essentials and our signature and iconic collections, which continue to outpace total fine jewelry bookings growth.

For example, bookings from our proprietary Sol Collection, which first launched in Q4 2023, grew an impressive 90% year-over-year. We're very pleased that our strategy to expand our reach with fine jewelry is paying off. While bridal remains important to our business, this diversification allows us to mitigate the varying dynamics of bridal and stay focused on quality growth. We have a lot to look forward to for the remainder of the year. We kicked off spring in Q2 with the launch of our Butterfly Collection, a new collection that includes a pendant necklace featuring a single brilliant lab diamond custom cut to form the wings of a butterfly.

Heading into Mother's Day, we've introduced our Keepsake Collection, a modern celestial-inspired take on the classic locket. We have a number of new and innovative design collections in the pipeline for the year ahead that I believe will further demonstrate the artistry, craftsmanship, and resonance of our brand. I look forward to sharing more as the year goes on. We are watching the consumer environment carefully and are observing a similar bifurcation that has been widely reported across our industry and the consumer sector. Specifically, while we are seeing some signs of softness at lower price points, demand at higher price points is holding up well in Q2 to date.

Our ASP strength and fine jewelry growth reflect this dynamic, more than that, they demonstrate the growing power of our brand with the higher income consumer. The deliberate work we have done to build Brilliant Earth into a brand that stands for quality, craftsmanship, and meaning is exactly what positions us well as the industry landscape shifts. Quarter to date, we have seen year-over-year bookings growth driven by strong performance at higher price points and fine jewelry outperformance. We're encouraged by sequential gross margin improvement.

As we said last quarter, with more time, we have more levers to pull to increase gross margin in this volatile metal environment, including selective price optimization, design and production engineering, and supply chain efficiencies, to name a few. We are executing diligently on what we can control in gross margin and believe Q1 marks the low point for our gross margin this year, and we are well-positioned as we move through the balance of 2026.

Jeffrey will share more detail on our guidance and outlook. I want to close by thanking our incredible team for their continued dedication and execution. Their passion and commitment are the reason momentum keeps building quarter after quarter, and the best is still ahead for Brilliant Earth. Now, I'll hand it over to Jeffrey Kuo, who will walk through the financials in detail and discuss our outlook.

Thanks, Beth. Good afternoon, everyone. As Beth mentioned, we're pleased to report a solid first quarter where we continue to successfully drive our strategic initiatives, delivering year-over-year net sales growth at the high end of our guidance range, gross margin within our expectations, year-over-year marketing leverage, and profitability in the upper half of our stated guidance. Let me take you through the details for Q1. Net sales were $99.5 million, up approximately 6% year-over-year and at the high end of our guidance for mid-single digit year-over-year growth.

Total orders grew approximately 3% year-over-year. Repeat orders outperformed overall order growth, demonstrating the effectiveness of our customer acquisition and retention efforts and the resonance of our brand and products with consumers. Average order value, or AOV, was approximately $2,131, up approximately 3% year-over-year, with ASP growth across the assortment, including engagement rings, wedding and anniversary bands, and fine jewelry. This was driven largely by two things. Customers are mixing into higher-priced items, reflecting our strength with the higher income consumer, and we have made selective price increases as a result of rising precious metal costs.

Gross margin was 54.3% within our expectations of mid-50s gross margins. This reflects the impact of historically high metal prices on our cost of goods, partially offset by our ability to nimbly adapt to market conditions, including our price optimization engine, thoughtful product design and specifications, vendor procurement efficiencies, and hedging. We expect gross margin in the remainder of 2026 to be higher than Q1 as we continue to execute on these initiatives.

We delivered adjusted EBITDA of negative $4.7 million, or a negative 4.7% adjusted EBITDA margin, landing in the upper half of our guidance range. Q1 is typically our seasonally lowest quarter for net sales, and we expect higher profitability in upcoming quarters this year. Q1 operating expense was 63.3% of net sales compared to 62.4% of net sales in Q1 2025, representing approximately 90 basis points of deleverage year-over-year.

Q1 adjusted operating expense was 59.2% of net sales compared to 57.6% in Q1 2025, representing approximately 160 basis points of deleverage year-over-year. Adjusted operating expense does not include items such as depreciation and amortization, equity-based compensation, showroom pre-opening expenses, and other non-recurring expenses. Q1 marketing expense was 23.6% of net sales compared to 24.5% in Q1 2025.

This represents approximately 90 basis points of year-over-year leverage. We were pleased to drive year-over-year leverage in marketing expense as a percentage of net sales in Q1, extending the success that we have had in the past two years, driving increasing efficiency while delivering strong top-line results. Employee costs as a percentage of net sales were higher year-over-year by approximately 190 basis points as adjusted. This includes growth in showroom employees, including from newly opened showrooms as we strategically invest in our showroom expansion. We continue to manage these expenses in a disciplined and responsible manner.

Other G&A as a percentage of net sales was higher year-over-year by approximately 60 basis points as adjusted in Q1, reflecting our balanced approach to disciplined cost management as we invest thoughtfully in the business for the medium and long term. As I've noted in the past, we don't have significant seasonal fluctuations in costs, such as employee costs and most of our other G&A costs.

Since Q1 is historically our seasonally lowest net sales quarter, we expect that adjusted employee and other G&A costs will be lower than Q1 as a percentage of sales in each of the remaining quarters this year. Year-over-year inventory grew principally as a result of strategic procurement opportunities to purchase diamond and jewelry inventory at advantageous prices last year, as well as growth in our fine jewelry assortment.

Even with this increase, our inventory turns at over four times remain significantly above the industry average. We maintain conviction that the agility of our data-driven, capital-efficient, and inventory-light operating model is a compelling competitive advantage. We ended the first quarter with approximately $59 million in cash, with no debt on the balance sheet. As a reminder, the year-over-year decline in cash balance reflects the payoff of our term loan in Q3 of last year and the completion of our one-time dividend and distribution of approximately $25 million last year.

Consistent with recent historical seasonality, Q1 represents our lowest cash quarter of the year. We expect our quarter end cash balance to be higher than Q1 in every quarter for the remainder of the year, reflecting the strength of our asset-light, data-driven business model that differentiates us from others in the industry. Turning to our outlook, for Q2, we expect net sales to be up in the low single-digit percent range year-over-year. On a two-year stacked basis, this represents an acceleration compared to our Q1 net sales growth.

We expect a profitable Q2 with adjusted EBITDA in the range of $0.5 million-$2 million. For the full year, we continue to expect net sales to grow year-over-year in the mid-single digit percent range and continue to expect a mid-50s gross margin for the year. We also expect year-over-year leverage in marketing expense as a percentage of net sales for the full year. We will make selective medium and longer term investments, including employee costs and other G&A, such as investments in technology and in our showrooms. We continue to expect adjusted EBITDA dollars for the year to be positive but slightly lower than 2025.

We also continue to expect that most of this year's adjusted EBITDA will come from Q4, given the seasonal shape of quarterly net sales, with Q4 being the highest net sales quarter of the year, improvements in gross margin as we progress through the year, and that we don't expect significant seasonal incremental employee and other G&A costs.

In closing, our data-driven approach, including our agile price optimization, disciplined expense management, and our asset-light business model, position us well to outperform the industry while delivering profitable growth. This quarter's solid execution reinforces our capability to identify and capture opportunities to drive sustainable, profitable growth and create value for our shareholders. With that, I'll turn the call over to the operator for questions.

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We do ask that you please limit to one question and one follow-up. Our first question comes from the line of Oliver Chen of TD Cowen. Your line is now open.

Hi, Beth and Jeffrey. Nice job on all the progress in fine jewelry, by the way. As we look at your think about your guidance next quarter, how are things trending lately relative to what you're seeing? Also related, pricing sensitivity given the increase this quarter and what you're thinking about prices relative to unit and elasticity. I imagine you're being pretty surgical and analytical about how you think about pricing. Then a follow-up question on fine jewelry. What are your thoughts on the LTV and the CAC on the fine jewelry customer relative to your heritage and bridal as well? Thank you.

Hi, Oliver. Thanks for the questions. Maybe we can start with just what we're seeing lately. I would say Q2 to date, nothing really significant to call out in a big difference in macro. We continue to see top line growth. The high-value per customer is continuing to perform and show resiliency there. I think you know, your discussion on Pricing sensitivity is absolutely something that we think very carefully about. The ASPs generally are increasing based on a few different factors. One of those factors is we're just continuing to see that strength at the higher end, those higher value customers. We are taking selective ASP increases to mitigate that increased metal cost. As you mentioned, we're being very surgical.

You know, having a really keen eye for that pricing sensitivity is something that we've developed capability really for many, many years. I don't think it's anything new here, but we are being careful to protect value, quality, profitability while still making sure that we are attracting that new customer. As it relates to fine jewelry, I think we're really pleased that we're able to acquire new customers at very strong marketing efficiencies. You know, I mentioned how we are investing heavily in the $500 plus assortment. We're very strategically focused on that higher value customer, and we're seeing very strong results there, growing that customer base.

We're having new customers over 40% this year relative to last year just in that $500 plus assortment. Marketing, driving marketing efficiencies across the assortment is always something that we pay very special attention to, but the brand resonance, the assortment, all of that is performing really well and driving nice efficiencies. As a result, across the assortment, we are seeing marketing leverage, which is something that we are also heavily focused on.

Okay, thanks. Jeffrey Kuo, you've always been very active at managing gross margins with agility. We're facing these unprecedented times with cost. What are you seeing now with gross margins and amongst the volatility, what are the latest strategies in terms of sourcing and what's implied in your guidance? Thank you.

Thanks, Oliver. I think we did a great job managing our gross margin in Q1. In line with our expectations, we were able to take historically high, all-time high metal prices in Q1, navigate through that really nimbly with a variety of strategies, including price optimization, vendor procurement efficiencies, being thoughtful about product designs and specification and hedging. We're able to package all that together really quickly in a dynamic market and deliver a strong gross margin within our expectations.

I think we're glad to see that sequentially quarter to date, we've had improving gross margins, and we think that as the year progresses with more time to manage with these tools that we have, we'll be able to deliver increasing gross margins, assuming that metal prices stay where they are. I think this is a real case study in how Brilliant Earth has just been able to be very nimble and effective, even in the face of significant changes like what we've seen. This is all included in our guidance, including our agility and our strategies, as well as expectations for metal prices, you know, being where they are and some continued volatility. I think we're feeling good overall at what we were able to deliver.

Thanks so much. Best regards.

Thank you. Our next question comes from the line of Ashley Owens of KeyBanc Capital Markets. Your line is now open.

Hi. Great and good afternoon. Thanks for taking our questions. Maybe just to start, you know, you've noted that nearly half of the new customers are now discovering Brilliant Earth through fine jewelry. As that becomes the primary acquisition channel, how is that changing the customer journey? Are these fine jewelry first customers eventually converting to bridal, or would you say you're building a different customer base than the one you had five years ago?

I would say that overall, we are acquiring more and more customers through fine jewelry, but we continue to invest in bridal, especially given the importance of it as that first purchase. You know, we do see the customer journey where people will buy fine jewelry, and then they'll buy bridal. I would say more frequent, you're seeing a bridal customer who is, you know, that's really their first major purchase, and then they tend to repeat in the future, whether it's wedding band or additional fine jewelry.

You know, really, I think it's important for us to cater to both the bridal and the fine jewelry customer. Driving repeat is something we are laser focused on, essentially making sure that we are increasing our customer loyalty and thinking through the journey, whether it's online or in our showrooms, to be able to ultimately drive that customer loyalty, whether it's starting with bridal or fine jewelry.

Okay. Maybe just as a follow-up on that really quickly. You know, you did highlight the ASP growth across assortment, but I don't think you broke out the engagement rings specifically. Could you just update us on where those landed in 1Q? Jeff, maybe on AOV really quickly. You know, both the drivers you called out with the higher priced items and some of the selective price increases seem pretty durable at this time. Is there a reason that the AOV growth we saw in 1Q wouldn't be a reasonable run rate for the next few quarters? Does the fine jewelry mix shift kinda eventually reassert some of that pressure we have been seeing for about several quarters? Thanks.

I can start on the bridal side. We're happy to see that ASP growth, which is true, you know, across all of the different pieces of the assortment. Bridal as well, we're seeing more strength at the higher end with a higher value customer, and more resilience there versus at the lower end. That's kind of what we're seeing on bridal. I would say Q1, it was bookings were slightly down as it relates to Q2 to date. We're seeing signs of improvement, a similar bifurcation that we've talked about with the relative strength at the higher price points. Jeffrey, do you wanna talk about the AOV and how we're thinking about that projecting forward?

Sure. We're seeing a few things in the Q1 results. As we talked about for Q1, onewe're seeing a variety of things influencing the ASPs, including the resonance that we have with higher income consumers mixing in to some higher price point products and the success that we're having in driving some of those higher price point sales, as well as Beth mentioned, some of the selective price increases. You are seeing some of those factors at play. You know, overall, regarding your point about growth of FJ, we do think that, you know, over a longer term, as we continue to have success in fine jewelry, we will, you know, we expect some moderation in price points overall because they do have lower price points than, for example, bridal.

It's something that we do want to continue to have that success in growing fine jewelry since it's such a big opportunity for us. You're seeing a variety of different factors at play in the Q1 results. I think overall, we're very pleased to be able to navigate through and drive these results where both orders and AOV increased for the quarter.

Okay. Appreciate the color. I'll pass it along. Thanks.

Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Our next question comes from the line of Dana Telsey of Telsey Advisory Group. Your line is now open.

Hi. Good afternoon, everyone. Two questions. First of all, new collections has always been, and the innovation and newness has always been a driver. As you think about the comparatives with last year, anything we should be thinking about new collection launches and timing this year versus last year? Certainly with the rise in energy prices, what have you been seeing? How have you incorporated the impact in margins, and how would you define it? Any changes to the cadence or shaping of the year given this than you originally expected? Thank you.

Thank you, Dana. I can start with just the new jewelry collections. I agree, this is a driver of the success that we've seen in fine jewelry. The assortment is very strong, and signature and iconic design collections have been performing very well. Sol was up 90%, as I mentioned earlier. We're continuing to invest in existing collections, the iconic collections that we continue to be known for, and we have a really nice pipeline of new product collections as well. We mentioned the Butterfly Collection. That's performing really well.

We reintroduced our Ring Pop collaboration, which sold out and was phenomenal. We think it's a really important part of the strategy to continue to introduce this newness. Also introducing it in really fresh, innovative ways with strong marketing campaigns. Making sure that we are able to capitalize on key holidays like Valentine's Day and timing the collections appropriately there is also really important. Also just making sure that all of this creates a nice halo effect on our Diamond Essentials, which continue to demonstrate strong growth.

We're excited about the pipeline we have coming up this year, but do recognize that this is a really nice way for us to communicate, drive our brand, and overall also activate the showrooms and make sure that we're driving really strong interest, which is why the showrooms as well have very nice fine jewelry growth, about 48%. I think they're all of these aspects of the strategy are key, and they're working well together.

As it relates to energy specifically, I wouldn't say that what we're seeing in the macro has changed our overall outlook in terms of the year. That's why we're reiterating the same guidance that we had last quarter for the full year. I wouldn't say it's something that we have noticed in terms of very specific behavioral changes that is changing how we are shaping the year.

Thank you.

Great.

Thank you. I am showing no further questions at this time. We have one more question. Our next question comes from the line of Anna Glaessgen of B. Riley Securities. Your line is now open.

Hi, everyone. Thanks for taking my questions. I'm hopping off another call, I apologize if it's been asked. Was curious on the discussions around bridal. I think, you know, over the past few quarters, we've seen nice momentum within the category. Curious if you can read into the consumer a little bit and what's going on that's driving that bifurcation. Is it a response to, you know, recent gas prices or broader uncertainty, and how you can address that in your go-to-market strategy ahead? Thanks.

Sure. Thanks, Anna, for the question. I think as it relates to bridal, and frankly, all the categories, we're seeing that similar type of behavior where the higher value customer continues to show resilience, and we're seeing a little bit more softness at the lower end, which is likely due to a lot of the factors that you guys have talked about, whether it's increasing gas prices or just some of the overall macro volatility, affordability, et cetera. I think that, you know, generally, we're pleased to see that high end continue to hold up well.

We've always, as a company, catered to a variety of different price points, but we continue to invest in elevating the brand and catering to a higher value customer, having a really premium experience with new innovations like our Date Night experience in our showrooms. I think we're very well positioned in both the breadth of the assortment as well as the premium nature of our brand to take advantage of the strength in that higher value consumer, which is also showing up in the bridal assortment as well.

Great. Thanks. I guess, if we can extrapolate more on that. You know, when you have pressure within that lower consumer, given you speak to a more premium consumer, do you expect that people trade down within your mix? Or is it that they potentially might seek more value-oriented offerings outside of your core?

I think it's a mixture of, you know, kind of holding off in terms of buying based on some of the volatility. I think that might be part of it. I think the holding off on purchasing could be an important aspect. You know, overall, we wanna make sure that we are acquiring customers in a profitable and sustainable way. We just have to continue to price optimize to make sure that we're able to acquire that customer where it makes sense to acquire them.

Great. Thanks.

Thank you. I am showing no further questions at this time. I would like to turn it back to Beth for closing remarks.

Great. Thank you everyone for joining us for our Q1 earnings call. I appreciate all of the questions. Look forward to talking to you next quarter.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Ladies and gentlemen, thank you for standing by. Welcome to the Brilliant Earth Group, Inc. Fourth Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Colin Bourland, Vice President of Strategy, Business Development, and Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to the Brilliant Earth Group, Inc. Fourth Quarter 2025 Earnings Conference Call. My name is Colin Bourland, Vice President of Strategy, Business Development, and Investor Relations. Joining me today are Beth Gerstein, our Chief Executive Officer, and Jeffrey Kuo, our Chief Financial Officer. During the call today, management will make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a description of the risks that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. These forward-looking statements reflect our opinion only as of the date of this call, and we undertake no obligation to revise or publicly release the result of any revision to these forward-looking statements in light of new information or future events unless required by law. Also, during this call, management will refer to certain non-GAAP financial measures. A reconciliation of Brilliant Earth Group, Inc.'s non-GAAP measures to the comparable GAAP measures is available in today's earnings release, which can be found on the Brilliant Earth Group, Inc. Investor Relations website. I will now turn the call over to Beth. Good morning, everyone, and thank you for joining us.

I am pleased to share strong Q4 results today. We delivered our largest quarter ever of net sales in Q4, driving 4% year-over-year growth in net sales with particularly strong performance in fine jewelry. We also delivered positive adjusted EBITDA, above the midpoint of our stated guidance, highlighting the agility of our business model. Our results reflect the success of the investments we have been making across product, brand, and experience. 2025 was a banner year for Brilliant Earth Group, Inc. We celebrated our twentieth anniversary and achieved major accomplishments across each of the strategic priorities that drive our growth. Before we dive into the results, I want to remind you of that growth strategy and how it guides our execution in this highly competitive and dynamic industry. We believe that these four things are key to realizing the growth opportunity ahead of us. First, our aim is to build Brilliant Earth Group, Inc. into the most loved and trusted jewelry brand. 2025 was a year of incredible brand momentum and successes. Our brand was at the center of many high-visibility moments this year, as stars like Beyoncé, Sabrina Carpenter, and Selena Gomez chose our product for major events in their lives. And we expanded our brand reach through unique partnerships ranging from Jane Goodall to Ring Pop. Second, create great product that is distinctive and ownable and builds affinity for the Brilliant Earth Group, Inc. brand. Have particular focus on expanding beyond our core bridal business into fine jewelry. And 2025 was a breakthrough year in which we grew fine jewelry mix to 17% of bookings with many iconic product releases, including our signature Pacific green-colored lab diamond collection, our Medallions with Meaning, and our Love Decoded collection. Our success in fine jewelry has turned what was a nascent portion of sales just five years ago into a business on a path to $100,000,000 annually. Third, deliver joyful and personalized shopping experiences that delight customers, foster lasting relationships, and set new standards for modern luxury retail. Last year, we continued to deliver industry-leading digital experiences and opened two new showrooms, reaching 42 in total. And our physical retail strategy continues to evolve with the opening of our first flagship showroom in Beverly Hills earlier this year, which showcases our new approach to experiential retail. And fourth, continue to develop our industry-leading asset-light business model utilizing cutting-edge technology and processes to drive long-term profitable growth. The results we shared today demonstrate the power of our model and this team's ability to deliver. Now let me walk you through some performance highlights of Q4. For the fourth quarter, net sales were $124,400,000, representing 4.1% growth year over year, and the highest quarter of net sales in our history. ASPs in Q4 were up year over year across the assortment. Much of the growth in ASP was driven by changes in mix to higher-priced items within each assortment, as we are seeing particular strength with the higher-end consumer combined with strong total and repeat order growth. For the full year, net sales reached $437,500,000, up 3.6% year over year. We delivered a fantastic holiday performance, including another record-breaking Cyber Weekend. Throughout the holiday selling period, our seamless omnichannel model drove strong traffic and conversion, both online and in our showrooms. From our Joyful Delight in the Details holiday campaign to showroom executions, including new experiences like trunk shows and deeper inventory investments, we saw strong performance during the quarter, especially in the ten days leading up to Christmas, where we drove 15% year-over-year bookings growth as customers sought Brilliant Earth Group, Inc. as their go-to gifting destination. Our gross margin was 55.9% in Q4 and 57.5% for the full year, approximately in line with what we had communicated during our Q3 earnings call, highlighting our ability to drive strong margins despite significant metal and tariff headwinds. You all know that the challenges presented by record metal prices and fluctuating tariff conditions are unprecedented. Our ability to manage through these conditions has been a testament to the strength of our business model and our team. This is an industry-wide impact, but our ability to optimize the performance drivers within our control has allowed us to navigate these challenges and still deliver profitability within our expectations. Jeffrey will talk more about the impacts, but as we are now into the new year, you can expect that we will continue to focus on optimizing our business in the ways that we can control to mitigate as much of the external cost pressures as possible. Our strong gross margin, another quarter and year of year-over-year marketing leverage, and overall operating expense discipline enabled us to drive a Q4 adjusted EBITDA of $4,200,000, or a 3.3% margin, and full-year adjusted EBITDA of $12,000,000, or a 2.7% margin, illustrating the agility of our business model and our continued discipline in cost management. Turning to some additional highlights for the quarter. Fine jewelry was a clear standout. In Q4, for the first time, we had multiple days where we hit $1,000,000 in fine jewelry bookings. We are seeing strong demand for both self-purchase and gifting, with almost half of new customers discovering Brilliant Earth Group, Inc. through fine jewelry in Q4, resulting in another record quarter in fine jewelry. Fine jewelry bookings grew 34% year over year in Q4, with strong unit and ASP growth, reaching 23% of total bookings mix for the quarter and 17% for the full year. As you know, fine jewelry has been one of our top strategic priorities for several years as we diversify beyond our bridal heritage, and we have driven extraordinary results. Our full-year 2025 fine jewelry bookings are more than three times bigger than they were just four years ago at the time of our IPO. Our iconic and signature fine jewelry collections, like Jane Goodall, Soul, and Love Decoded, and collaborations like Ring Pop, continued to significantly outpace overall fine jewelry bookings growth as customers are increasingly drawn to Brilliant Earth Group, Inc.'s one-of-a-kind styles through campaigns that capture consumers' imagination. We have also had great success driving growth in lab-grown diamond fine jewelry. As you know, we are early leaders in the lab diamond space. We have immense opportunities as lab diamonds continue to increase in popularity amongst consumers. In Q4, bookings from fine jewelry made with lab diamonds grew 61% year over year, and we continue to see significant opportunities for lab diamonds to increase the addressable market of consumers looking to buy diamond jewelry for everyday wear. In wedding and anniversary bands, we set another record, delivering our largest fourth quarter of bookings ever with double-digit year-over-year growth. And we continue to see success across both our men's and women's collections, with outperformance in giftable and higher price point diamond rings in Q4. And in engagement rings, we continue to drive booking of approximately 1% year over year in the second half of the year. Our signature collections, the exclusive designs we are known for, continue to drive strong results, growing double digits year over year in Q4. Turning to our seamless omnichannel experience, we continue to innovate across our digital and in-person customer experience. In digital, we made many enhancements from online imagery and merchandising to overall up-leveling of our online shopping experience. In showrooms, we opened two new locations in 2025, one in Southlake, Texas, and another in Alpharetta, Georgia, ending the year with 42. And as our showroom format strategy continues to evolve to more ground-floor and mall locations, we have had increasing success with retail customers who walk into the showroom without a prior appointment. In fact, orders from these retail customers grew 61% year over year in Q4. In January, we opened our first flagship showroom in Beverly Hills. This showroom is a new and evolved concept that celebrates the artistry, craftsmanship, and quality that we are known for, while immersing customers in the fullest physical expression of our brand to date. In addition to elevating our hallmark appointment experience, we have introduced several new features, including an eternity bar featuring the widest breadth of our engagement and wedding assortment and our unique design-your-own experience, a fine jewelry personalization station, a dedicated VIP showroom, and an exclusive new date night appointment offering that is an exceptional personalized experience for couples. The date night appointment is a simple idea that takes what can be a stressful process for couples and makes it genuinely fun and celebratory. The Beverly Hills flagship is both an evolution and elevation of our retail strategy. In fact, Forbes called our concept a blueprint for the future of luxury jewelry retail, and we agree. Beyond the opening of our flagship, we expect to open another two showrooms in 2026. For Q1 to date, I am pleased to report that we have seen a continuation of strong performance with strong year-over-year bookings growth, year-over-year new and repeat order growth, as well as an encouraging Valentine's Day start to the year. ASPs are also up year over year across engagement rings, wedding and anniversary bands, and fine jewelry, consistent with what we observed in Q4, demonstrating strength among our higher-income consumers. We also recognize that the industry is facing historically high metal costs. We believe we are well positioned to navigate this environment with our agile and sophisticated merchandising, pricing, and sourcing strategies. Before I hand the call over, I also want to share that today we released our 2025 Mission Report, which marks our two decades of impact and charts our progress toward our four mission pillars: transparency, sustainability, compassion, and inclusion. I invite you to read the report, in which we also introduced the next generation of initiatives designed to expand our impact even further. And finally, I want to thank our incredible team for their commitment and tireless efforts this past year. Their passion and execution are the reason we can stand here today, twenty years in, and say with confidence that the best is still ahead for Brilliant Earth Group, Inc. I will now turn the call over to Jeffrey.

Thanks, Beth, and good morning, everyone. As Beth mentioned, we are pleased to report fourth quarter and full-year results where we continue to successfully drive our strategic initiatives, deliver top-line growth, and sustain profitability and positive free cash flow despite a challenging cost environment. Let me take you through the details. Q4 net sales were $124,400,000, up 4.1% year over year, which was our biggest quarter ever and near the midpoint of our stated guidance range. Full-year 2025 net sales were $437,500,000, up 3.6% year over year. Total orders grew 6.5% year over year in Q4 and 13% for the full year. Repeat orders grew 15% year over year in Q4 and 13% for the full year, demonstrating the effectiveness of our customer acquisition and retention efforts, and the continued resonance of our brand and products with consumers. Average order value, or AOV, was $2,001 in Q4 and $2,082 for the full year. This represents a decline of 2.3% year over year in Q4 and 8.2% for the full year. Our Q4 AOV reflects the continued success we have had in driving strong fine jewelry performance, which carries a comparatively lower price point, along with year-over-year growth in ASPs across the assortment, as we see strong success driving sales of higher price point items. Q4 gross margin was 55.9%, and full-year gross margin was 57.5%. This represents a 370 basis point decline year over year in Q4 and a 280 basis point decline for the full year. To put the Q4 margin environment in context, gold prices at the end of Q4 were up approximately 67% year over year, while platinum was up approximately 144% year over year, both at or near what were then all-time highs, and we continue to navigate a challenging tariff environment. We are extraordinarily proud of our ability to deliver strong gross margins in this environment, which speaks to the strength of our premium brand positioning, our data-driven price optimization engine, our globally diversified supply chain, and the agility of our team and business model to adapt quickly to changing market conditions. We delivered Q4 adjusted EBITDA of $4,200,000, or a 3.3% adjusted EBITDA margin. During that time, the gold spot price increased approximately $400 an ounce and platinum over $675 an ounce between the time of our last earnings call and the end of the year, and we were still able to deliver adjusted EBITDA above the midpoint of our guidance range and exceeding expectations. Full-year 2025 adjusted EBITDA was $12,000,000, or a 2.7% adjusted EBITDA margin. This highlights the sustainability of our business model, driven by our strong gross margins, continued marketing leverage, and overall operating expense discipline. Q4 operating expense was 55.9% of net sales compared to 57.6% of net sales in Q4 2024, representing approximately 170 basis points of leverage year over year. Full-year 2025 operating expense was 58.7% of net sales compared to 59.5% in 2024, representing approximately 80 basis points of leverage year over year. Our disciplined management of expenses while also driving growth and investing in the business is demonstrated in this year-over-year leverage. Q4 adjusted operating expense was 52.7% of net sales compared to 53.9% in Q4 2024. Full-year 2025 adjusted operating expense was 54.9% of net sales compared to 55.4% in 2024. Adjusted operating expense does not include items such as equity-based compensation, depreciation and amortization, showroom pre-opening expenses, and other nonrecurring expenses. Q4 marketing expense was 24.6% of net sales compared to 26.1% in Q4 2024. This represents approximately 150 basis points of year-over-year leverage. Full-year marketing expense was 24.2% of net sales compared to 25.7% in 2024, also approximately 150 basis points of marketing leverage. This is our second year of driving year-over-year leverage in marketing spend, and these results speak to our dynamic management of marketing spend, including use of AI and machine learning to drive efficiencies, while still making strategic investments to grow the brand. Employee costs as a percentage of net sales were higher in Q4 by approximately 110 basis points as adjusted year over year. For the full year, employee costs were approximately 90 basis points higher as adjusted. This includes growth in showroom employees, including from newly opened showrooms; we continue to strategically invest in our showroom expansion. Other G&A as a percentage of net sales declined year over year by approximately 90 basis points as adjusted in Q4, as we continue to drive operating expense efficiencies and amortize expenses over a larger net sales base. For the full year, other G&A as a percentage of net sales was higher by approximately 10 basis points as adjusted, as we balanced prudent investment with disciplined cost management. Year-over-year inventory grew approximately 39%, principally as a result of strategic procurement opportunities to purchase diamond and jewelry inventory at advantageous prices during the year in light of tariffs. Even with this increase, our 4x inventory turns as of year end continue to be significantly higher than the industry average of one to two times. We maintain conviction that the agility of our data-driven, capital-efficient, and inventory-light operating model continues to be a compelling competitive advantage. We ended the fourth quarter with approximately $79,100,000 in cash. As you know, during Q3, we paid off our term loan, leaving us with no debt on the balance sheet, and we completed the one-time dividend and distribution of approximately $25,000,000. For the full year, we generated approximately $5,800,000 in free cash flow, demonstrating our continued ability to generate cash while making strategic investments and driving growth. Turning to our outlook for 2026. As Beth mentioned, we have carried our momentum into the new year. For our annual guidance, we expect net sales to grow in the mid-single-digit percent range year over year. We expect continued headwinds in gross margin, with metal prices near all-time highs, and expect gross margin to be in the mid-50s percent range for the year, assuming that metal prices remain at similar levels to where they are today. We expect to continue driving year-over-year leverage in marketing expense as a percentage of net sales for the year, continuing the success we have had in the past two years, driving increasing efficiency while delivering strong top-line results. We will continue to make selective medium- and longer-term investments in 2026, including in employee costs and other G&A, such as investments in technology and in our showrooms. We expect to deliver positive adjusted EBITDA for the year, but slightly lower than last year's adjusted EBITDA dollars given the challenging metal cost environment. We also expect that most of this year's adjusted EBITDA will come from Q4. For Q1, we expect net sales to grow in the mid-single-digit percent range year over year. We expect adjusted EBITDA margin to be in the negative mid-single-digit range as a percentage of sales, driven in significant part by both the speed and magnitude of recent gold and platinum price increases, with both metals remaining near all-time highs. I also want to address our previously stated medium-term outlook. As many of you know, we laid out a set of medium-term targets, and we have been on our way to delivering on those medium-term targets. You can see this in our improving net sales growth trajectory and our continued leverage of marketing expense as a percentage of net sales, where we have now delivered two consecutive years of full-year leverage. However, the precious metal environment we are operating in today is unlike anything our industry has experienced. Gold and platinum prices have reached levels that were impossible to anticipate when we set those targets, and this has had a meaningful impact on gross margin. Because of this level of uncertainty in metal prices and the magnitude of their impact, we do not believe it is appropriate to speak to targets beyond the current year at this time. We remain confident in the underlying health and trajectory of our business, and we will continue to share our perspective on the path forward as visibility improves. In closing, our data-driven approach, including agile price optimization, disciplined expense management, and our asset-light business model, positions us well to outperform the industry while delivering profitable growth. With that, I will turn the call over to the operator for questions.

Thank you. We will now open for questions. To ask a question, please press 11 and wait for your name to be announced. To withdraw your question, please press 11 again. The first question comes from Oliver Chen with TD Securities. Your line is open.

This is Julia Shlansky on for Oliver Chen. I am curious to hear about your expectations for AOV growth in the context of guidance for the next year, and expectations for gold and platinum hedging, and how much of your current inventory that you have secured throughout the year is effectively hedged or price loaded. Thank you.

Okay, great. I can start on AOV. In Q4, it was slightly down, which I think is actually the smallest decrease that we have seen for a bit of a while. Overall, what is driving AOV is we are seeing ASPs increase across the assortment. Part of that is due to the price positioning that we have, the strength of our brand, and the strong reception we are seeing for our iconic jewelry collections, as well as a great reception from our higher-income customers. So ASPs are up across the assortment. We are also seeing really strong performance in fine jewelry, and as fine jewelry is a lower category, that is what is driving the overall effect. That is what we are seeing from a high level. Jeffrey, I do not know if you want to comment more on AOV, and then maybe you can lean into the gold and platinum question.

No, I think you covered that well, Beth. From the perspective of how we are managing metal costs, we have a variety of different tools that we use. Hedging is one of those strategies. As you know, we also are able to price optimize and really think dynamically about pricing, think about things like design and product engineering and ways to manage costs while maintaining very high quality standards, as well as vendor optimization and negotiations. We have a lot of different tools at our disposal, and you can see that in the results of how we navigated Q4. We were able to navigate these very significant changes in metal prices and still deliver an adjusted EBITDA that was within our expected range.

Great. Thank you both.

Thank you. Our next question will come from Ashley Owens with KeyBanc Capital Markets. Your line is open.

Hi, great. Good morning, and thanks for taking our questions. As we think about 2026, how would you frame the key bookings growth drivers across the business, whether that is further bridal recovery or continued fine expansion? And how should we think about share gains relative to industry growth over the next year?

We are really encouraged by the growth that we have been seeing and the continuation of some of the strong growth that we saw in Q4. The drivers that I mentioned in the remarks—with fine jewelry being very strong, with our showroom strategy, and with the brand awareness—continue to be key growth drivers in 2026. It is really a continuation of all of the initiatives that we have been talking about, and we are very encouraged by the brand resonance that we are seeing and by some of the breakthrough moments that we are partnering with and driving overall increased awareness. On the fine jewelry side, we are going to continue to see this be a growth driver. There is a lot of opportunity. It is a very large market, and we are also continuing to outperform the industry as it relates to fine jewelry. We are very encouraged by the growth signals that we are seeing there and are going to continue to lean in and continue to be that go-to destination for jewelry. One of the stats that I mentioned—that half of our new customers discover us now through fine jewelry—just shows you the size of the opportunity and how it is gaining momentum.

Within the $100,000,000 longer-term opportunity you called out, do you expect the business to become less dependent on some of the engagement ring cycles and volatility we have seen and driven more by repeat purchases and gifting occasions? And then quickly on gross margin and the mid-50s outlook for the year given the metal environment, as we think about modeling for 2026, should we assume that persists through the year, or is there potential for sequential improvement as pricing, sourcing adjustments, or fine jewelry mix growth increase and those things flow through? Thank you.

Sure. Yes, in terms of how we are thinking about the business, fine jewelry is a continuation of the diversification away from our bridal heritage. We are continuing to be bridal leaders and introduce new collections, and we continue to see that as an important part of our overall growth, but fine jewelry becomes more and more of a driver. We are continuing to see that diversification. Even wedding and anniversary bands, having double-digit growth, show an evolution of the business, and if you look at a lot of the independents out there where the mix is leaning more toward fine jewelry, that is the path that we are on as well. Jeffrey, do you want to talk about gross margin?

In terms of gross margin outlook for the year, as I mentioned, we are looking at gross margin to be in the mid-50s percent for the year given the metal environment. As we go through the year, we do have more and more ways to mitigate some of the headwinds, including things like pricing and the operational actions that I mentioned earlier. We have more tools over time. We do not have a more specific shaping on a quarter-by-quarter basis of how we expect gross margin to look, but we think that our agility overall that we have demonstrated in recent quarters continues to serve us well, and we are better positioned than the industry at large to be able to navigate a variety of different conditions.

Super helpful. I will pass it along. Thank you.

Thank you. As a reminder, to ask a question, please press 11. The next question comes from Anna Glaessgen with B. Riley Securities. Your line is open.

Hi. Good morning. Thanks for taking my questions. I would like to start on the embedded pricing within the guidance. I think on the Q3 call we talked about Q4 being a particularly challenging time to lift prices as the consumer is generally more price sensitive. Are you assuming that at the turn of the year in Q1 there is better opportunity to offset the headwinds that you have been noting in gross margin?

Yes, I can start there. We are seeing an improved opportunity in terms of continuing to optimize and take selective price increases. Jeffrey mentioned the speed and the volatility in terms of metal prices overall, which is especially notable in Q1. One of the advantages that we have is a very sophisticated pricing algorithm. We are very much a test-and-learn and data-driven company, and we also have a premium brand positioning with proprietary designs. All of that enables us to have more pricing power. Q1 certainly gives us a better opportunity than Q4, where we tend to be a little bit more selective. This is something that we have a lot of experience navigating throughout our history, and we are going to continue to use the tools available to us, but we do see opportunity to be selective in terms of increasing our pricing.

Great. Turning to OpEx, with the mid-50s approximately gross margin assumption, to get to slightly lower profitability from 2025, it seems to imply an escalation in operating expense leverage in the year. Could you maybe talk to the biggest opportunities there?

Yes, I would be glad to. I would like to frame how we are thinking about overall guidance for the year. You can see that we have seen strong performance on the top-line side, and we are guiding to a higher growth rate overall for the year than last year. We have been very successful in driving marketing efficiencies and expect to be able to continue to drive year-over-year marketing efficiencies this year. The big headwind that is incorporated is on the metal pricing side and the impact on gross margin. That is something that is facing the entire industry. You can see the very large and very fast shifts in terms of metal price recently, and that is really the main factor. Some of the things like marketing leverage help us to offset that, and we are going to be disciplined in terms of other OpEx areas such as employee and other G&A costs to balance, as we always have, making medium- and longer-term investments with driving profitability. Our approach to OpEx is that we are going to be disciplined and look to continue to drive efficiency in areas like marketing. What you are seeing in terms of the year-over-year change in profitability is really coming from the metal cost that we are seeing in the environment overall.

Got it. One more follow-up, if I may. I believe, Jeffrey, you said in the prepared remarks that most of the adjusted EBITDA in 2026 should be from Q4. That seems to be roughly in line with historical seasonality. I was just wondering if you are implying that we could potentially see a negative EBITDA in Q2 or Q3?

You are right that we do expect most of the profitability in Q4, and that factors in a number of different things. Seasonally, Q4 is our biggest quarter, and you are going to see that come into play. We may have discussed in prior calls how a lot of our operating cost structure is not highly seasonal, so you have a relatively more stable base of things like employee costs and other G&A over the course of the year. In Q4, you have the opportunity to amortize that over a much larger revenue base, and that is factored into our guidance. As you go over the course of the year, we think that we have more and more opportunities to capture efficiencies and be able to mitigate some of the metal cost headwinds as we go through the year.

Great. Thanks.

Thank you. I am showing no further questions in the queue at this time. I will now turn the call back over to Beth for closing remarks.

Thank you, everyone, for joining us, and we look forward to talking to you in our next quarterly call.

This concludes today's conference call. Thank you for participating, and you may now disconnect.