Global-e Online Ltd. Price & Performance (GLBE)

These forward looking statements are subject to risks uncertainties some of which are beyond our control. In addition, these forward looking statements reflect our current views with respect to and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward looking statements as a result of a number of factors including those set forth in the Risk [indiscernible] Risk Factors in our Perspective filed with the SEC on September 13, 2021, and other documents filed with or furnished to the SEC. These statements reflect management's current expectations regarding future events and operating performance, and speak only as of the date of this call. You should not put undue reliance on any forward looking statements. Although we believe that the expectations reflected in the forward looking statements [indiscernible] We cannot guarantee that future result levels of activity performance and events and circumstances reflected in the forward looking statements will be achieved or will occur. Except as required by applicable law, make no obligation to update or revise publicly any forward looking statements whether as a result of new information, future events, after the date on which these statements are made, or to reflect the occurrence of unanticipated events.

Please refer to our press release dated 02/19/2025 for additional information. In addition, certain metrics we will discuss today are non GAAP metrics The presentation of this financial information is not intended to be considered in isolation as a substitute for or superior to the financial information prepared presented in accordance with GAAP. We use these non GAAP financial measures for financial and operating decision making and as a means to evaluate period to period comparisons. We believe that these measures provide useful information about operating results enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operating decision making. For more information on the non GAAP financial measures, please see the reconciliation tables provided in our press release dated February 19, 2025. Throughout this call, we provide a number of key performance indicators used by our management and These and other key performance indicators are discussed in more detail in our press release dated 02/19/2025. I will now turn the call over to Amir Co Founder and CEO. You, Erica. And welcome everyone to our fourth quarter and full year 2024 earnings call. 2024 was yet another record breaking year for us here at Globally Global-E.

As we continue to diligently execute on our strategy, and further solidify Globally's leadership position in the global e commerce space. 2024 was brought to a great close by a fourth quarter, which was our strongest quarter ever. And came in well above our guidance. [indiscernible] We finished Q4 with a record $1,710,000,000 in GMV. Up 44% year on year. And we've record revenues of $263,000,000 42% year on year. Supported by the strong performance of our merchants over the holiday sales period, including the Black Friday, and Cyber Monday weekend. The adjusted gross profit margin for Q4 was nearly 46%, up almost three thirty basis points from the same quarter of last year. Gross margin expansion coupled with our continued focus on operational excellence and execution, enabled us to reach a key milestone in our journey in Q4. For the first time ever, our quarterly adjusted EBITDA margin crossed the 20% mark. Which was the long term profitability target we set for ourselves at the IPO. Less than four years ago lending at 21.7% or $57,100,000 more than 62% growth compared to the same quarter last year. Such increased profitability coupled with the usual seasonality effect, yielded accelerated cash generation with the business generating nearly $130,000,000 in operational cash flows, in Q4.

Not only that, but in Q4, we reached GAAP profitability for the first time since the IPO. Another incredible milestone for us. We expect 2025 as a full year to exhibit for the first time in our history as a public company a strong GAAP profitability as well.

On top of the continuation of our multi year strong free cash flow generation. As we report to you today the results for 2024, we are quickly approaching our fourth anniversary a public company. As such, it is an opportunity to pause and reflect on our growth journey over the last few years. And what an incredible journey it has been.

GMV for the full year of 2024 came in at close to $4,860,000,000 revenues for the full year, came in at almost $753,000,000 This is more than six times the GMV and 5.5 times the revenue we had in 2020. The last full year prior to our IPO.

Just four years ago.

Annual adjusted gross profit reached nearly $350,000,000 in 2024. More than eight times what we had in 2020. As our top line growth was coupled with a robust expansion, of our adjusted gross profit margin from just 32% at IPO to 46.5% in 2024. An increase of 14.5 percentage points or more than 45% during this four year period. Moreover, adjusted EBITDA for 2024 was roughly $141,000,000 growing even faster at almost 11x compared to 2020. Representing a staggering compounded annual growth rate of over 80%. Driven primarily by our operational leverage and commitment to cost control, coupled with our track record, of delivering fast and durable growth. Accordingly, net operating cash flows grew to nearly $170,000,000 for the year, yielding a cash and cash equivalents balance of nearly $500,000,000 at the end of twenty twenty four. As such, together with our strong cash generation ability, we'll provide the necessary fuel to support our growth plans in the future as well [indiscernible] Looking back at the last four years, I feel enormous pride in what our global team of remarkably dedicated globally professionals now more than 1,000 people strong around the globe has managed to accomplish achieving and surpassing the key financial and strategic goals have set for ourselves.

We managed to beat our start of the year annual GMV guidance in every single year since going public. Despite occasional intra year macro headwinds, and challenges we had to push through, Also sending a new record in GMV bookings each year. With 2024 being no exception to that. But such growth did not come at the expense of profitability. As I already noted, our relentless focus on efficiencies and cost control enabled us to beat the aspirational long term profitability target we set for ourselves at the time of the IPO. We crossed the 40% adjusted gross profit margin mark already several quarters ago. And now we crossed the 20% adjusted EBITDA margin milestone as well. Beyond the massive growth in all our financial metrics, over the past four years, we also managed to achieve the ambitious strategic goals we set out to conquer when we IPO. On the platform side, we continue to expand the suite of capabilities and solutions we offer to our merchant. Added multiple capabilities across all areas of global e commerce, sharpen our data capabilities and insights. All aimed at further growing our merchant business In parallel, significantly expanded our total addressable market In recent years, by extending our global geographical footprint, from just nine outbound markets operated in 2020 to the 39 outbound markets we currently support, well as by broadening our platform scope To enable more multi local offering, to serve the needs of large global merchants, as well as consumer electronic brands.

We also launched our SMB and demand generation offerings based on the Flow and Boraforre acquisitions From a merchant perspective, post IPO, we have made strategic investments in cultivating several new verticals including sports clubs and consumer electronics. Investments which have been paying off as we continue to onboard more and more Safran, As an example, the latest consumer electronics brand Input devices, [indiscernible] audio and video gear, and smart home devices. We are grateful the opportunity to support the amazing team at Logitech in their ever growing focus on direct to consumer sales. As we prepare to enter our fifth year as a public company, we are in high gear with our engines firing on all cylinders as our global team pushes forward along all our strategic pillars, On the new GMV front, looking back at Q4 of twenty twenty four, we saw many new brands joining the platform and going live across all geographies. In The U. S, [indiscernible] went live the upcoming jewelry brand Keysar and the web store of famous luxury fashion designer, Europe saw many new brands go live as well. Including Spanish brand Tust, Italian fashion brand Slower, UK footwear brand Phoebe Fallo German brand Ivy Oak, Swiss running gear brand [indiscernible] [indiscernible] French brands Duppa and Moly, and the successful Finnish pet brand, Hutta, so now all European dogs can enjoy their unique pet gear and clothing.

The APAC region saw its fair share of go lives as well. In Japan, went live with Commeo one of Japan's largest retailers of secondhand goods. With Kyoto based watch brand Koo, and with the Japanese tailored shirt brand, Kamakua Shirt. We also went live with the renowned Korean cosmetics brand, Topology, and with the Australian fashion brand, Zoe Crossman, second left to name a few. Besides adding new merchants, we also continue to expand the scope of our business with existing merchants and merchant groups. During Q4, we added Romania and Croatia to the list of markets we operate for Adidas. Went live with a new outlet site for our long standing merchant, John Smedley, and added Sterezon the third brand to go live robust out of the Swiss Poli Fashion Group. As we strive to fulfill our mission, of powering better global e commerce, We continue to invest in adding new services and new functionality, to support the diverse needs and aspirations of merchants of all sizes, and across all geographies. During Q4, our product and engineering teams concentrated on deploying several key new capabilities. Those included among other things a new revamped returns portal and returns process improvement including new consolidated return options in Key Lane, support for B2B imports for relevant merchants, [indiscernible] and enhanced live view as part of our merchant portal and several enhancements for our borderfree.com demand generation platform.

As we remain the leader of global e commerce as a service, we believe we are uniquely positioned to continue harnessing our unparalleled and fast growing data assets. Our accumulated know how and our unique expertise building and perfecting more and more services and capabilities for the benefit of new and existing merchants. Our robust product development pipeline well as our continued investment in R and D, are aimed at achieving just that. That is true also with regards to Shopify managed market. Where we continue to work hand in hand with our partners at Shopify and invest in adding new features and functionality to the Managed Markets offering. Aimed at making it applicable to a wider range of merchants, on the Shopify platform. Another key area we continue to invest in is technological innovation. With emphasis on harnessing the power of artificial intelligence to improve both [indiscernible] as well as drive productivity and efficiency within our internal operation. One such innovation we have already discussed in the past, is our successful customer services chatbot. Utilizing a specially trained version of the chat GPT large language model, The chatbot is already handling a large percentage of customer ticket. Almost half of which are sold by the bot in real time to the full satisfaction of the customer.

And we are constantly broadening the scope of issues the bot can handle. For example, now when customers approach customer services, wanting to return a product, instead of being redirected to a returns portal, they can finish the entire process right there. Vis a vis the boss. And get a return label all the relevant documentation, and clear instructions on how to proceed Another example of a proprietary tool we are starting to experiment with is automatic AI assisted localization of merchant site text and visual content. Aimed at transforming the way merchants manage multilingual content [indiscernible] Once operational, [indiscernible] high quality translation tailored to the specific context of their brand, with minimal effort, while maintaining the merchant's control over the final result, through a resource management system enabling edits, and updates by human translators We need it. We are also continuing to develop and deploy internal automated systems aimed at increasing operational efficiency. A recent example is an automated system developed by our innovation team designed to streamline, handling of payment dispute, and potentially lower unforced chargebacks. Our examples include AI powered tools that could enable internal users and software developers to interact more easily with our data our knowledge bases, and our code base using natural language.

As well as AI based tools like Copilot and others that are designed to accelerate coding as well as testing and quality assurance. In summary, we are extremely pleased with our achievements and results for the past few years. Since the IPO. As well as with the results of 2024 in particular. We are even more excited about the many growth opportunities that lie ahead of us in 2025 and beyond. Across all our strategic pillars. From a financial perspective, besides the continuation of our solid growth trajectory, 2025, our fifth year as a public company, is set to bring with it two significant milestones. First, as mentioned already, '25 is expected to be globally's first GAAP profitable year as a public company. We exhibited positive and improving adjusted EBITDA and free cash flow figures every single year since we went public. But this year, also expect to begin profitable for the full year and hit our 20% adjusted EBITDA long term IPO target for the [indiscernible] which are both very significant milestones for us. Us. The second important milestone for us is that in the back half of 2025, we are expected to cross the first time ever an annual run rate of $1,000,000,000 in revenue and likely finish 2025 just shy of the $1,000,000,000 mark.

The full year. The journey from $0 to $1,000,000,000 in revenues over the past twelve years and we're only getting started. And with that, I will hand it over to Arthur. To dive deeper into our quarterly and annual financial results as well as our outlook for Q1, and for the full year 2025. Thank you, Amir, and thanks to everyone for being with us today for our earnings call. As Amir mentioned, we are truly excited about our Q4 and full year results for 2024.

I'd like to point out again that in addition to our GAAP results, I'll also be discussing certain non GAAP results. Our GAAP financial results along with the reconciliation between GAAP and non GAAP results can be found in in our earnings release. Looking at the full year of 2024, it was another year of strong growth for us. With the business powering on all cylinders. GMVN revenue grew 3732% year on year, respectively. Adjusted gross profit grew even faster at 43% reflecting an adjusted gross margin of 46.4% for the year. Up three fifty basis points from 2020 Adjusted EBITDA grew a staggering 52% to slightly more than $140,000,000 reaching an adjusted EBITDA margin of 18.7% on an annual level. Furthermore, 2024 was another record which amounted to $167,000,000 reflecting a free cash flow margin of 22.2%. Throughout 2024, our existing merchant base continue to stay and grow with us as reflected in our annual NDR rate of 119% and GDR rate of 93.5 It is important to note that GDR and NDR were negatively impacted by the out of the ordinary bankruptcy of Ted Baker and by several border free merchants that chose not to replatform to the Global-E NDR and GD are excluding the out of the ordinary churn for 20 Is it closed?

To 12397% respectively. [indiscernible] Zooming into Q4, the quarter exhibited and robust cash generation as we continue to execute and tap into the global direct to consumer e commerce opportunity. We have experienced accelerated growth of GMV in Q4 as we generated $1,710,000,000 of GMV an increase of 44% year over year. The rapid growth was driven by strong consumer demand, which remains volatile and significant contribution from new merchant and Victoria's Secret that have onboarded successfully to our platform in recent months. [indiscernible] Q4, we generated total revenue of $262,900,000.0 up 42% year over year. Service fee revenue were $117,300,000 up 30% and fulfillment services revenue were up 53 percent $145,600,000 The faster growth of fulfillment revenue compared to service fee revenue was mainly driven by the bankruptcy of Ted Baker to which we provided demand generation services with the high service fee take rate. Fulfillment services revenue growth [indiscernible] also positively impacted by the GMV mix. Moving down the P and L, growth in non GAAP gross profit continues to outpace revenue growth. In Q4, non GAAP gross gross profit was $120,900,000 up 53% year over year. Representing a gross margin of 46% compared to 42.7% in the same period last year.

The gross margin has slightly decreased compared to Q3 mainly due to the higher share of fulfillment revenue. GAAP gross profit was 108 and Moving on to operational expenses, we remain committed to investing in the growth and improvement of our platform to further enhance our offerings. [indiscernible] R and D expense in Q4 excluding stock based compensation was $24,100,000 or 9.2% of revenue compared to $18,200,000 or 98% period last year. Total R and D spend in Q4 was $28,300,000 We also continue to invest in sales and marketing to solidify our [indiscernible] while maintaining efficiencies. Expenses, stock based compensation and acquisition related intangible 11.3% of revenue compared to $17,800,000 or 9.6% of revenue in the same period last year.

Shopify warrant related amortization expense was $37,400,000 Total sales and marketing expenses for the quarter were 70,900,000.0 General and administrative expenses excluding stock based compensation and acquisition related contingent consideration was $10,700,000 or 4.1% of the revenue compared to $8,600,000 or 4.6% of revenue in the same period last year.

Total G and A spend in Q4 was $14,300,000 Adjusted EBITDA for the quarter totaled $57,100,000 representing a 21.7% adjusted EBITDA margin increasing by 62% from $35,200,000 or 19% margin in the same period last year.

As Amir mentioned, this marks another key milestone in our journey as we have been able to hit our adjusted EBITDA long term targets that prior to our IPO.

Despite the impact of the Shopify warrants related amortization Q4 twenty twenty four marks our first quarter of GAAP profitability as a public company. [indiscernible] And net profit for the quarter was $1,500,000 compared to a net loss of $22,100,000 less Switching gears and turning to the balance sheet and cash flow statement, we ended 2024 with $474,000,000 cash and cash equivalents including short term deposits and marketable securities. Cash generation has accelerated with operating cash flow in the quarter at $129,300,000 operating cash flow of $93,500,000 year ago. Driven mainly by adjusted EBITDA growth Moving to our financial outlook and guidance for 2025. Despite the prevailing macro related uncertainties, we expect 2025 to be another year of fast growth and improved adjusted EBITDA for Global-E. For Q1 twenty twenty five, we are expecting GMV to be in the range of $1,210,000,000 to $1,250,000,000 At the midpoint of the range, this represents a growth rate of 32% versus Q1 of twenty twenty four. We expect Q1 revenue to be in the range of $184,500,000 to $191,500,000 At the midpoint of the range, this represents a growth rate of 29% versus Q1 of twenty twenty We For adjusted EBITDA, We are expecting a profit in the range of $2,029,500,000.0 dollars to $33,500,000 For the full year of 2020, '5, we anticipate GMV to be in the range of 6.19% to $6.04 $9,000,000,000 representing over 31% of annual growth at the midpoint of the range.

In other words, we expect GMV growth to remain strong although growth rates are expected to be lower compared to 2024, driven mainly by normalizing consumer demand, which has been on the higher side in the last few months of 2024. [indiscernible] Revenue for the year is expected to be at the range of $917,000,000 to $967,000,000 representing a growth rate of 25% at the midpoint of the range. Revenue growth is expected to be somewhat slower compared to G big growth, as we expect the overall take rate to decline during 2025. The lower take rate expected is driven mainly by our estimates that large merchants will increase increasingly adopt more multi local or 3B to as a means to manage the risk of rising risk cross border tariffs, which are being put in place by The U. S. Trading partners worldwide. Even with that, as Amir mentioned earlier, we can potentially reach another significant milestone in 2025 as in the second half of the year, our revenue annual run rate is billion dollars mark for the first time. We expect adjusted EBITDA to continue to perform well thanks to our increased efficiencies and economies of [indiscernible] For adjusted EBITDA, we're expecting a profit $179,000,000 to $199,000,000 representing over 34% growth at the midpoint of the range allowing us to reach our long term goal of 20% adjusted EBITDA margin in 2025.

Moreover, 2025 is expected to be our first full year of GAAP profitability as a public company. As the Shopify warrants related amortization is expected to decrease significantly in Q2 of twenty twenty five, and to be gone in the beginning of twenty twenty. In conclusion, we have reached and surpassed the long term targets that we have set prior to our IPO in 2021. And we believe there is still a long runway in front of us. We believe now is the right time to share our thoughts about next phases of growth for Global-E. And we will share our strategy, business initiatives during our upcoming inaugural Investor Day on March 11, in New York City. Hope to see you there And with that, Amir, Nir and I are happy to take any of your questions. Operator, Thank you.

Ladies and gentlemen, we will now begin the question and answer session. On consideration of time, Your first question is from Ann DuBolt from Wells Fargo. Your line is now open.

Hey, guys. Thanks for taking the question and congratulations on a fantastic year. I'll ask both of my questions upfront. I mean the first quarter guide, just unpacking that, it implies pretty meaningful deceleration from the momentum that you showed in the fourth quarter and despite the easier comp from first quarter 'twenty four. So maybe if you could just kind of help us understand the conservatism that's baked in there Then my follow-up would be, on the managed market solution, by our estimates, you delivered north of two fifty of GMV in 2020 basically off of off of essentially zero in 2023. So is it fair to assume that you can add a similar amount of GMV dollars in 2025 as you did 2024? Thanks, Ken.

Andrew, thanks. So I'll start just in terms of the growth rates for the first quarter. So in general, for the first quarter, I for 2025, in general, we are happy with what we are looking at and we [indiscernible] GMV is is going to continue to grow fast over 30% as it's reflected in our guidance. There is, I would say, somewhat slower growth expected in revenues and the main reason for that is the what we expect would be the effect of the the tariffs [indiscernible] being imposed by The U. S. And most some of its trading partners as we believe it will drive more to adopt either 3B2C or even multi local strategy, as a means to manage the risks of these growing tariffs and that will inherently lower the take rates on that and that's what we baked into our into our guidance going forward. Hi. As for your second question Andrew, it's Neil.

We do expect managed markets to remain around the 5% of our overall GMV We and Shopify are currently focused on enhancing the merchant's experience.

And simplicity in order to support reaching in the longer term a larger addressable market. So we do expect that to grow this year at a pace which is which would keep it as it was last year of share of our activity. But going forward, I think in future years, with the builds we're doing now, we do have high hopes for a significant contribution. [indiscernible] And just to add that in terms of the deceleration from Q4 to Q1 in the second half of twenty twenty three, as you know, have onboarded many merchants, including some large ones And those large ones have performed very well in Q4 and they are actually queued more than others towards Q4. So that will have an impact on our following quarters. In addition to that, we saw very strong consumer demand in the last few months of of 2024, and we assume a certain normalization going into 2020 Thank you. Your next question is from Samad Samana from Jefferies. Your line is now open.

Hi, good morning and congrats on the strong close to 2020 maybe just a follow-up on the take rate and the impact of tariffs. I guess are you already seeing merchants come into you and say, that they're rethinking the the fulfillment strategy, which impacts which runs out to the more multi local or that they're going to start making operational changes in advance of tariffs being applied or is this just you anticipating that Maybe give us a little bit more clarity on the feedback that merchants have given you? And then I have a follow-up Hi, Samad. Yes.

We do see already from existing merchants a growing interest in the changes that are upcoming trading into The U. S. And and the fear of, I would say, an ongoing tariff war As part of it, we did see merchants reaching to us to ask our advice and guidance as to what would be a good solution for them that will not implicate them in high operational and And CapEx and actually most of them are looking at either using our free B2C option [indiscernible] actually going multi local completely So this by nature will have effect down the year on the take rates as reflected in the guidance. On the other hand, We do see greater interest from prospects that are not currently with Global-E that are looking for solutions as well and understand that with a partner like Globally Global-E, [indiscernible] They can expedite and make much more efficient as they'll set up towards the new changes. And the ever changing environment. It's not only the changes themselves, it's the ability to adapt for frequent changes retailers and brands are facing hard time to do within the internal tech That's [indiscernible] overall, I believe that into the long term, it might yield the complexity, might yield a positive effect for Global-E.

As we've seen in the past when Brexit occurred, so it had a short term I would say, impact on take rates on consumption but over time, it created a lot of pushed to additional merchants to join the Global-E platform.

Great. That's helpful. And then maybe just as I think about the progression of 2025, obviously, we have the 1Q guidance, but Opram, can you help us understand what you're assuming from a NRR perspective and if you can maybe just any anticipated large merchant go live you've experienced in the last couple of years that we should be aware of as we're setting our models for the year.

Sure, Samad. So regarding Alt start from the end, the new merchants, we came in today. We had a very, very strong year in terms of sales in 2024. And we started the year with a very nice backlog of merchants that are expected to go live.

We within 2025. None of them, none no single merchant that is as large as we saw in the last few months of 2024, but the aggregated number is very is very solid. So we expect those merchants to contribute gradually into the numbers of 2025. Remind me what was the first part of the question? [indiscernible] Can you guys hear me? What are you assuming for net revenue retention in 2025?

Yes. Thank you for that.

Sorry.

For not remembering that.

So for net revenue retention, we Similar numbers to what we have seen in 2024, maybe slightly lower as the larger scale that we are at it is becoming gradually more challenging to maintain the same numbers. But we expect it to come close to what we have seen in 2020 Thank you. Your next question is from James Faucette from Morgan Stanley. Your line is now open.

Great. Thanks very much.

Wanted to just quickly touch on the another element of the and RR etcetera that you mentioned as it relates to border free merchants who chose not to replatform with Global-E. Can you just give us a little insight as to what those discussions were like or why those decisions were made and how you feel about at least on those customers Becoming Global-E customers in the future. Hi, James. It's Neil. So Basically, just to start with the overall most of Most of the GMV out of the Borderfree platform either already migrated or churned. So we see less impact going forward than what we've seen on 2024 numbers.

But those merchants that were merchants that were mentioned that did not mine Global-E globally, Actually, the vast majority had other priorities than to invest in an integration with Global-E.

The typical merchant is much more traditional merchants from department stores and traditional retail in The U. S. They have their own priorities due to the current situation. And many of them decided not to unfortunately of those that did not move decided decided not to invest in integration currently With some of them, however, we are still in discussions. So I do assume that there is an opportunity that over time once urgent priorities Hey, Ardan, we will see some of it actually coming back as a new merchant into the Global-E Elite platform However, on those that actually migrated to to globally, we are very happy with the results. We have seen a great traction. We've seen their sales going up. We've seen much better conversion out of their current traffic. So all in all, what we wanted to achieve with them, we did see it becoming a reality. So we're quite optimistic [indiscernible] And as I said, going forward, the fact on it on our NDR, NRR is is going to be much lower.

Your next question is from Chris Zhang from UBS. Your line is now open.

Hi, thanks for taking our question.

Our first question is your revamped one or three operating the dimension service you maybe talk about your progress on that in terms of the merchant onboarded the progress towards monetization and much of the impact has been baked into your take rate for 2025. And then my second question is about the free cash flow conversion in 2025 and especially the taxes or the tax rate you're going to pay in 2025? Thank you. Hi, Greg. Thank you for your question.

It's Neil.

So yes, we have launched borderfree.com which is our demand generation initiative in, I would say, sometime in Q4. It wasn't early October. It was late October, but we launched it And we are very happy with the initial traction we've seen so far. Both with the current merchant adoption out of the globally platform as well as the shopper usage. We do believe that it will be a strategic pillar in the coming years to drive more traffic to our merchants, growing their business with significant growing share of the demand coming from as well as setting us another competitive edge to the market in order to bring in additional GMV Global-E. So all in all, we're very very happy with the initial traction. I will pass to Arthur for the second Hi, Chris.

Thank you for the question. Regarding free cash, flow as in previous years, we expect it to be slightly above our adjusted EBITDA So that's the short answer.

Your next question is from Brian Pearson from Raymond James. Your line is now open.

Thanks, gentlemen, and congrats on the strong close to 2024. So I'd love to hear what you guys have seen so far starting 2025. I know you mentioned a very strong demand through the holiday season.

But anything you'd call out in terms of GMV trends as we start 2025 Any color by region? Yes, Brian. It's Neil.

So we have seen after a very strong peak period and also before that slightly before that in the second part of Q3 where we've seen a strong consumer demand, We did see some normalization coming into 25% and we expect to go into something that is much more closer to our normal trend of the multiyear trend that we've seen in consumer demand, driving same store sales. Most countries behave the same. I think that we have seen some weakening in in The UK in the consumer demand into The UK, But outside of that, We are currently seeing back to normalization slightly lower than what we've seen, but already embedded into our Got it. And maybe just a follow-up as we're thinking about take rates. Just curious what are newer merchants to the platform thinking about multi local? I don't know are some mix dynamics with enterprise, but I'd love to understand as we think about the expectations for the 2025 guidance, what should we be assuming about take rates longer term as we about the mix of multi local versus non multi local?

So I will start and I will pass it to Off Arthur. In terms of the new merchants, I think that the multi local enabled globally to address a new TAM [indiscernible] [indiscernible] globally could not reach before. If you look just in in January and Amir mentioned it, late January, early February, we launched Logitech. Logitech is our strongest consumer electronics brand to date. This was not in our time, if you just take it back two to three years ago where we didn't have the capability to do to do multi Global-E. So yes, by nature, it's in a lower take rate because a multilocal either you don't have fulfillment take rate at all or that you have at a very low take rate versus the cross border, However, it does open a new addressable market for us. In terms of how we see it playing over time, I would let give more clarity.

I think that over time, we should see multilocal beyond what Amir Global-E just mentioned regarding 2025, growing gradually in share. And this is one because as Mir just mentioned, there is an opportunity there and we are pursuing that opportunity. So consumer electronics and other merchants that have local inventory as well. And on top of that, we see over time a gradual shift with very large merchants And it makes sense for them to open another inventory center, let's say, if The U. S. Merchant if it's European merchants in The U. S, So we see that also over time. So we do expect a gradual increase multi local over time.

Thank you. In the interest of time, we ask that you please only ask one question. Thank you. Your next question is from Grant Braeselin from Evercore. Your line is now open.

Thank you. Good afternoon. And Amir, I appreciate the early feedback on tariffs A lot of questions that we have there. It sounds like that's adding a new layer of complexity and it might impact volumes could also drive more merchants your way. My question is related. It's on the potential suspension of the de minimis exemption rule here in The U. S. For duty free goods under $800 How would the suspension of that rule impact the business? It is would that add another layer of complexity and potentially impact volumes, but drive more merchants to the platform. Walk through specifically what you're seeing merchants discuss with you around the administrative expense rule? [indiscernible] So indeed, we do expect the suspension of the minimas to have an effect both on the consumer demand with the affected HS codes that would see an increase that can be not the 10% that were actually levied on the product, but can be anything between 25% to 35% because there are ongoing duties that today don't kick in because they are over the order is below the de minimis of the 800. So this chain would have an effect that not only the 10% would kick in, but the entire 30% on average [indiscernible] order from foreign fees into The U. S. For those specific agents.

Are more expensive. This is what the merchants are facing. That's why 3B2C model where the merchant would actually import it on a wholesale basis to avoid paying high tariffs On duties, the retail value, but do it on the wholesale and then sell it domestically we will see it coming more. As well as an increase in demand for solutions to duty reclaim because if duties are kicking in now in The U. S, and 15% on average of goods actually going back into the origin country, The duty reclaim would become much more critical because it can save 2% or 3% on the trading cost. So we do see a lot of interest coming around it. For merchants in order to kill themselves to have an optimized I would say, cost structure and profitability while not bumping up prices to The U. S. Consumer, at least not at at tens of percent. So we do believe this will create a lot of interest in our services as globally is [indiscernible] to give a comprehensive comprehensive suite of services on duty reclaim for the returns into supporting 3B2C that for merchants to do by itself, is super complex to do if at all.

So we do believe that there will be uncertainty. It might affect short term. Consumption, but overall in the longer term, we do expect it will behave the same as we've seen in Brexit where overall it created much more demand to our service And I would just add to that Brent, what as Nir alluded to earlier, it's not just the magnitude the impact of either the tariffs or the change in de minimis, it's also the velocity in which these changes are coming. And we've seen that over the last few weeks. And it's probably not going to end there. They're going be retaliatory actions back and forth. So it's not just the tariffs themselves, it's the ability to handle and keep on training in a streamlined way in the face of all these rapid changes in the market and that's as we said, that's part of the value that Globally brings to the Thank you. Your next question is from Koji Ekta from Bank of America. Your line is now open.

Yes. Hey, everybody. Thanks for taking the question. I wanted to ask another question on take rates. And so when I look at the original 2024 guide, right at the midpoint I think the take rate assumption there was for 16% for 2024, but the year ended up a little bit below that at at 15.5%. And so when I look at the 2025 guide, right smack at the midpoint, that's 14.9%.

And I do appreciate the multi local and the tariff dynamic there. But I wanted to really understand how conservative the take rate assumptions are this year versus last year And what are some of the factors maybe outside of multi local and tariffs that could drive a higher or lower overall take rate versus the guide. Sure, Koji. It's Ofel.

I think that looking at as we always do when we got into DC, we learned from experience. We obviously looked at less year guidance versus actual execution as an input the 2025 budget and guidance. And I would say that the 2025 guidance is thoughtful and it's based on Our best estimation at this point in time. As we mentioned, we expect take rates to decrease mainly on the back of higher multi local share that is pushed by the tariffs and considerations of [indiscernible] And we hope that we will hit the number. In order what can drive this upwards is faster penetration of value added services. This could definitely support take rates And what could impact it negatively is if we see a higher share of multi local compared to what we expect to see.

Thank you. Your next question is from Patrick Walravens from JMP. Your line is now open.

Great. Thank you.

I wanted to go back to Ed Baker. So after I guess in August of last year, you guys guided down think it was like by about $10,000,000 because of the bankruptcy at Ted Baker and at the time in The U. S. When you went to a website, was offline, but now it's back, I guess, under ULAC. Do you get that that business back?

So the business that actually went bankrupt was actually resold. So it's a new there is a new partner managing it. We are as we do with other prospects now, work in order to be to be connected, but it's a completely different tech stack. It's a completely different owner. It's like selling to a new client again. It's part of our pipeline. And hopefully, we will be able to have to be able to work with them.

Thank you. Your next question is from Mark Zygoteauin The Benchmark Company. Your line is now open.

Just quick ones for me, Opher.

On the $25,000,000 guidance, I'm just curious what the services take rate is And then as it relates to Shopify managed markets, I was hoping you could confirm the mix there your 24 GMV [indiscernible] So regarding the take rate we expect the VSP take rate to be slightly lower compared to 24 we mentioned, there is a Ted Baker impact and we did serve Ted Baker for almost eight months in in 2024. Regarding fulfillment, as we already this discussed more than once on this call. We expect it to be lower due to higher multi local share So that's in terms of of the take rates. In terms of [indiscernible] as we called out during the year, the actual result was is budgeted by us. So we hit the budget and as we mentioned a few times, it was around 5% of our volume.

Thank you. Your next question is from Rob Wildhack from Autonomous Research. Your line is now open.

Hey, guys. One more on managed markets and appreciate all the color there. I think in the past you've hinted that volume has been in line with expectations, but you've added more merchants than expected. So that kind of points to fewer large merchants onboarding there. I'm curious why do you think that is? And then what specifically features or functionality, do you think you need to add to make the product more applicable to those large merchants?

Hi, it's Neil. So I think you're correct Lee on your assumption. Yes, we did hit our budget. It is skewed towards slightly lower size of merchants versus what we are we budgeted for. However, it did give so far a solution for thousands of merchants that adopted it and are trading and happy on the platform. We do believe and we work with Shopify in order to build, which say, additional tools, as I mentioned earlier, and capabilities to make it more simple and streamlined with other Shopify processes and activities. And we believe it will also give a greater a greater set of capabilities that will allow to go further up stream in terms of also the size of the client. It will mature over time in the coming quarters. But we have high expectations over the coming years for managed market Thank you. Your next question is from Matt O'Neill from Yes. Hi. Thank you guys so much. Thought maybe I could ask a little bit about the Logitech win that seems to be a nice diversification and indicative of the electronics channel taking off. Reading into that correctly? And how do you guys think about that?

I know there's maybe a little bit scrutiny on electronics going cross border than typical apparel and luxury items. And so is that type of product movement improved? Thanks.

Yes. So you're spot on that consumer electronics is indeed more complex than apparel and That is almost by nature why consumer electronics brands that we bring on are multi Global-E. The latest addition we spoke about Logitech is a good example. It [indiscernible] However, it's a new total addressable market for globally We do believe that we can win ground within the consumer electronics segment. And we think that Logitech was our first drill size case studies. However, we had those before with Jabra, with Sumto and many others. They joined globally already and are enjoying our multi local offering for the last few quarters. And we see the acceleration now and hopefully we can keep them coming.

Thank you. That concludes our question and answer session. I will now hand the call back to Amir for the closing remarks. Thank you, Firdapse.

And as we concluded another very strong year at Global-E, I would just like to thank you all for joining us today. And for your ongoing support as we continue on our journey to fulfill our mission enable great better global direct to consumer ecommerce for brands worldwide. And we would be honored to have you join us. As such, we very much look forward to seeing you in New York next month for our Investor Day well as on our future earnings call. Until then, goodbye. And take care.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.