Byrna Technologies Inc. (BYRN) Earnings Call Transcript

Good morning. Welcome to Byrna's Fiscal Third Quarter 2026 Earnings Conference Call. My name is Darrell and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, Conn Davis, and CFO, Lori Kearns. Following their remarks, we will open the call to questions. Earlier today, Byrna released results for its fiscal third quarter ended August 31, 2026. A copy of the press release was released on September 7, 2026. The company's CEO, Conn Davis, and CFO, Lori Kearns, are on the company's website. Before turning the call over to Mr. Davis, I will read the company's safe harbor statement. Some discussions held today include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Byrna's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect those projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise. As this call will include references to non-GAAP results, please see the press release in the Investors section of our website, ir.byrna.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. I would like to turn the call over to Byrna's CEO, Conn Davis. Sir, please proceed.

Thank you, operator. Thank you, everyone, for joining us today. Over the past several months, we have made significant progress in building the foundations necessary to support sustainable long-term growth. Our results in the quarter reflect our ongoing transition, and while they remain below the level of performance we expect for Byrna, we are seeing signs that many of the initiatives we began implementing this year are starting to gain traction. And that reinforces my conviction in the opportunity ahead. We continue to believe Byrna is uniquely positioned at the intersection of personal safety and consumer self-defense. The need for a less lethal option remains significant. Consumer awareness of the category remains relatively low, and we believe the long-term opportunity to expand adoption is substantially larger than the business today. Our focus since I arrived in March has been centered around 3 priorities: Improving customer conversion and retail productivity, transforming how Byrna builds demand, and enhancing operational efficiency across the business. During the quarter, we began seeing encouraging progress across each of these priorities. Our direct-to-consumer metrics improved, with website sessions averaging approximately 29,000 per day in August, the highest since March this year, while conversion rates improved from June to August sequentially. We also expanded our social creator ecosystem to more than 50 active creators, helping us reach new consumer audiences and driving engagement up 95% across our social channels compared to 1Q. Beyond the individual metrics, what encourages me most is that many of the building blocks we have set out to establish earlier this year are now coming into place, and we still have more to come to help re-accelerate growth. Many of our refreshed marketing programs are now active. Our creator ecosystem is live and expanding. Our retail initiatives are rolling out ahead of the holiday season, our leadership team has been strengthened. We are also seeing measurable operational progress, with first pass yield exceeding 89% and approaching the 90% target we set for 4Q, gross margins outperforming our internal expectations and inventory beginning to trend lower. Collectively, these indicators reinforce our confidence that the actions we are taking today are creating a stronger platform for future growth. As we move toward the upcoming holiday season, our focus remains on execution. We still have meaningful work ahead of us and remain realistic about the uphill climb. At the same time, we believe the foundation we have spent much of fiscal '26 building is materially stronger than it was 6 months ago. I'll discuss more on our quarter and also introduce a longer-term outlook for the business in a bit. But first, I will turn the call over to Lori to review our results from the quarter. Lori?

Thank you, Conn, and good morning, everyone. Let's review our financial results for the fiscal third quarter ended August 31, 2026. Net revenue for the third quarter was $15.3 million, down approximately 46% from $28.2 million in the prior year period. This was driven primarily by a decline in e-commerce sales and slower reorder activity from dealers and chain stores following substantial restocking in fiscal 1Q and slower than expected sell-through. Gross profit was $12.2 million, or 79% of revenue, compared to $16.9 million or 60% of net revenue in the prior year quarter. Reported gross profit includes the impact of a $2.3 million tariff refund. Adjusting for this item, adjusted gross profit, a non-GAAP measure, was $9.9 million, representing an adjusted gross margin of approximately 65%. The increase in adjusted gross margin is primarily attributable to operational efficiency gains in both manufacturing and supply chain, as well as favorable product and channel mix. Operating expenses for 3Q '26 were $15.1 million compared to $14.1 million for 3Q '25, an increase of 7%. The increase primarily reflects continued investment in new marketing initiatives as well as $1.7 million in bad debt expenses related to 2 large international customers, partially offset by the change in variable selling expenses associated with the decrease in sales. As we've previously discussed, we expect incremental expense as our new commercial and consumer acquisition programs ramp. Those investments will precede their full potential revenue contributions and outside of those targeted areas, we are managing spending against the current revenue base and continuing to evaluate costs. We reported a net loss for the quarter of $2.9 million or a loss of 13 cents per diluted share, compared to net income of $2.2 million or 9 cents per diluted share in the same period a year ago. Adjusted EBITDA, a non-GAAP metric, for 3Q '26 was negative $1.4 million compared to $4.1 million in the same period a year ago. Cash, cash equivalents, and marketable securities totaled $9.4 million as of August 31, 2026, compared to $9 million in the prior year period. It was $15.5 million in November 30, 2025, and $10.4 million at the end of the fiscal second quarter. Lower collections of accounts receivable weighed on cash during the quarter, and we ended the period with no debt. Inventory totaled $30 million as of August 31, 2026, compared to $34.1 million in the prior year period, $32.7 million at November 30, 2025, and $30.4 million at the end of the fiscal second quarter. As we head into the holiday sales season, we expect inventory levels to decrease by $2 million to $3 million during the fourth quarter and to continue to decrease in 2027, leading to improved working capital efficiency. In summary, we believe we have a strong financial position today and the available resources to further invest in our long-term growth objectives. I'll now pass the call back to Conn to discuss more on the quarter and the actions underway across the business. Conn?

Thank you, Lori. As I mentioned in my opening remarks, we are starting to see encouraging early signs in many of the long-term growth initiatives we've previously outlined. For remainder of today's call, I'd like to spend time specifically covering each of those areas in detail before getting into our longer-term outlook. Let me start with customer conversion and retail productivity. One of our primary objectives this year has been improving how effectively we convert customer consumer interests into purchases across both our direct-to-consumer and retail channels. We are beginning to see meaningful evidence that these efforts are producing results, both in initial discovery and in conversion. For 3Q, website conversion improved from June to August sequentially. While we see ample room for continued improvement in conversion, this tells us that our early investments are starting to show initial signs of progress. Heading into the holiday season, we expect conversion to continue moving in the right direction, both as a result of it being a higher intent period and as we apply our early learnings to better tune our approach. Getting into details, the improvement is being driven by several factors. First, we are doing a better job of targeting, meaning we are attracting more new consumers who are more likely to purchase. With updated messaging, updated media placement, improved targeting, and added influencer partnerships, we are doing a better job of reaching audiences that are closely aligned with Byrna's products and mission. Second, once consumers arrive at Byrna.com, we are doing a better job of educating them and ultimately assisting them in making an informed purchase decision. Our Find the Right Launcher quiz continues to generate valuable insights while helping consumers better understand the differences across our product portfolio. To date, the program has generated over 280,000 responses and is converting at over 2 times the rate of the broader website. Similarly, our Try Before You Buy program continues producing encouraging results. The program has maintained a conversion rate of approximately 35% while introducing many new consumers to the Byrna ecosystem. On a related note, our returned launchers are also helping support our new refurbished products program. During the quarter, we sold through all available Byrna SD refurbished product inventory, creating an incremental revenue opportunity while improving asset utilization and further supporting our operational efficiency initiatives. We expect this to remain a reoccurring initiative, allowing us to efficiently monetize return inventory when sufficient refurbished product is available. Altogether, these initiatives are helping us improve both online traffic quality and website conversion. As for retail, productivity remains an area where we have more work to do. Partner inventory levels continue to weigh on reorder activity, and retail improvements typically take longer to implement than digital initiatives. That said, much of the work we set out to complete for the holiday season is now in place. We have updated retail marketing materials, improved product merchandising, enhanced product displays, expanded training efforts, and continued rolling these initiatives out with retail partners throughout our network. Additionally, we've continued to find unique ways to work with our retail partners, and this holiday season, we are equipping them with exclusive holiday bundles that we believe will resonate with shoppers. Combined, these investments position us well heading into the holiday season and should support stronger sales productivity over time. Our second priority is transforming how Byrna builds demand. Historically, Byrna relied heavily on a relatively narrow audience and a concentrated group of marketing partners. While those relationships remain important, we have been actively broadening both our audience and marketing approach as we work to expand on this narrow and deep initial audience. Our traditional influencer channels continue to represent an important part of the business. These traditional channels have represented the majority of our marketing activity year-to-date, as the marketing program committed to at the beginning of the year has played out. While we believe the upcoming election cycle creates stronger demand trends within some of those audiences, their performance has declined over the past 18 months and remains below where we ultimately need them to be. As a result, we've continued reallocating marketing dollars where possible toward channels and partnerships capable of reaching broader audiences and attracting new consumers to Byrna, while still delivering attractive customer acquisition economics. One example is our Fox Sports Media Partnership through iHeartMedia. While programs like this typically take time to build awareness and momentum, we've already begun seeing more consumers reference this partnership and believe it is contributing positively to overall brand awareness. Building on those efforts, we recently launched a new campaign with iHeartMedia's The Bobby Bones Show, America's leading country morning radio program. This partnership reflects our continued strategy of reallocating existing media investments, when possible, towards trusted platforms with broader mainstream reach, allowing us to introduce Byrna's less lethal personal security solutions to new consumer audience. Through a combination of national radio endorsements, podcast integrations, and digital media placements, we believe these initiatives will help expand brand awareness, improve customer education, and further strengthen engagement with prospective customers as we continue expanding the Byrna brand. Another important area focus has been our creator strategy. Working alongside Acceleration Partners, we have now onboarded more than 50 creators into our social creator ecosystem that have a combined following of 3.8 million. We also remain on track towards our objective of building a network of approximately 100 creators by calendar year-end. As a reminder, we are targeting established personalities as well as micro and mid-sized creators with 10,000 to 500,000 followers on Instagram, Facebook, and YouTube. The initiative has targeted both our traditional, firearm-owning core audience and our new growth audiences. Encouragingly, we have seen a strong response from creators that primarily reach new audiences that include women's self-defense, families, runners, commuters, and outdoor consumers, including many that were completely unaware of Byrna before our engagement with them. This has enabled us to create and promote creator-driven content that shows how Byrna's products can support personal safety at home, while commuting, during exercise and travel, and in outdoor settings. While still early, results have been encouraging. Engagement across Byrna's social media channels has increased by 95% from 1Q, and we are beginning to see meaningful traffic, engagement, and sales activity generated by creator content. In fact, despite launching only recently, the program has already generated more than $45,000 in sales, exceeding our September target by approximately 300%. We have also already achieved our full-year Quick-Through objective in just 2 months, while several months remain in the year. While the ecosystem remains in its early stages, these results suggest adoption is ramping faster than we initially anticipated. We believe this creator ecosystem will become an increasingly important customer acquisition engine over time. We are also continuing to look for creative ways to introduce Byrna to new consumers in person. One example was our recent activation at the Bass Pro Shops night race at the Bristol Motor Speedway, where we were in front of more than 100,000 race fans over 3 nights of racing. The event provided opportunity to showcase Byrna to a highly relevant consumer audience, many of whom were learning about the brand for the first time. Live product displays, and educational discussions around Byrna's personal safety solutions, we were able to drive meaningful consumer engagement while significantly expanding brand and category awareness. Experience like these allow consumers to see our products firsthand and better understand the value proposition, helping support both awareness and future demand generation. On a separate but related note, I'd like to provide a brief update on our recent acquisition of Hero Defense Systems, as it also supports this broader demand generation strategy. I'm pleased to report that the acquisition officially closed in August, and we have begun integration efforts here. Our focus has been on rapidly improving the cost, quality, and manufacturability of the HERO product lines. With these concentrated efforts across product design, supply chain and manufacturing, we intend to relaunch HERO's products as an integrated part of Byrna's product lineup at SHOT Show in January. HERO expands Byrna's product ecosystem into new price points and everyday carry form factors, creating additional entry points into the category while providing us with more opportunities to engage consumers through their personal safety journey. Additionally, we believe that the HERO product lines will open up opportunities across new retail partners. Moving to our third priority, which is enhancing operational efficiency, throughout the year, we've remained focused on building systems that will improve profitability, increase cash generation, and better align production with demand. One of the most important actions we took was transitioning ammunition manufacturing to an outsourced model this past quarter. We are already seeing meaningful benefits from this transition, including reduced operational complexity, enhanced strategic flexibility, and improved profitability. The shift has produced an approximate gross margin benefit of 1,200 basis points in our ammunition, and we expect those benefits to continue moving forward. More broadly, margins continued to improve during the quarter. Adjusted gross margin was approximately 65%, up from 62% in 2Q and roughly 500 basis points above last year. Well ahead of the approximately 62% level we said we expected to hold through year-end. Notably, we achieved this on lower volume, driven by operational efficiency gains, and favorable product and channel mix. The team's ability to deliver these results during a challenging top-line quarter speaks to the long-term potential we're building in the business. Reducing and right-sizing our inventory levels also remains a significant focus area as we look to better align production with demand in the future. As we move into the holiday season, we expect stronger sell-through of existing retail inventory. As Lori mentioned, we expect a reduction of inventory by $2 million to $3 million in 4Q. Combined with temporarily moderated production levels, we expect to see overall inventory begin to normalize while also providing the added benefit of improved cash generation. In summary, we are continuing to identify opportunities to further improve manufacturing efficiency, product costs, and operational productivity so that as our sales continue to ramp, we'll see more of that reflected in our bottom line. Moving forward, the first steps of our marketing transformation are implemented. Our creative ecosystem is expanding, our retail programs are rolling out and will accelerate post-holiday, and our operational initiatives are beginning to generate measurable benefits. At the same time, we remain realistic about the work still to be done. We are still in a transition period, and while we expect to drive sequentially improved results, 4Q faces a difficult comparison against an exceptionally strong prior year period. Looking into the end of the fiscal year, we believe it is clear that the business is now moving in the right direction. And with the majority of the initiatives we targeted for the holiday season now in place, we are ready to start playing offense. As we begin looking beyond the current transition period, it is important to emphasize that our focus extends far beyond restoring near-term growth. We believe Byrna has an opportunity to play a leading role in shaping the future of personal safety by expanding awareness and adoption of less-lethal solutions, among a much broader population of consumers. Today, we remain in the early stages of that opportunity. Our ability to meet that opportunity is rooted in 4 key pillars. First, awareness, adoption, and conversion across the Byrna platform. Everything we've discussed today, from media partnerships and creator programs to website improvements and retail initiatives, is ultimately designed to increase awareness of Byrna's unique personal safety solutions, improve conversion throughout the customer journey, and bring new consumers into the category. We are encouraged by the early improvements we've seen in website traffic and conversion rates. We believe there remains a significant opportunity to further optimize the customer experience. As part of this effort, we plan to launch a redesigned mobile native website in the first quarter that better reflects how consumers shop today and establishes a foundation for continuous optimization rather than periodic improvements. We also see substantial opportunity within our retail and dealer channels, where we have hired our first dedicated regional sales manager focused on continuously meeting with our partners to improve sell-through, expanding dealer relationships, and increasing our presence with both existing and new retail partners. As we continue to broaden our product portfolio, including the HERO offerings, we believe these efforts can further strengthen our product acceptance in large chains to expand our distribution footprint and accelerate adoption across multiple channels. Our second pillar is extending our presence into professional security, law enforcement, and international markets. Historically, these markets have not been major focus areas for Byrna and remain largely underpenetrated relative to their long-term potential. Third, continuing to improve operational efficiency. The progress we've made with gross margins, manufacturing efficiency, ammunition production, inventory management, and cash generation demonstrate the steps we've taken to build a stronger financial model. There are still more ways for us to further improve this, and we see this as an exciting opportunity as we aim to grow both our top and bottom lines. Finally, we will continue evaluating strategic opportunities that strengthen and complement our personal safety platform. We believe HERO is a good example of the type of opportunity we are interested in pursuing as it broadens our ecosystem, expands our addressable market, and creates additional pathways for long-term growth. Let me be more specific about why we're confident in this framework. First, our margin structure is fundamentally better now compared to Byrna's last growth phase. At mid-60s adjusted gross margins, ammunition sourced variably and at a lower cost, and production more closely aligned to demand, more of every incremental revenue dollar can flow through to the bottom line. Second, investments in leadership, partner relationships, and our creator platform are now largely in place. So growth from here should come without significant incremental cost, which creates real operating leverage. Third, the runway from our expanded audience segmenting provides us a greater market opportunity without alienating our legacy core demographic. We are adding more than 50 million likely buyers in segments Byrna has never addressed in a focused way. Additionally, we're implementing a clear plan to drive sell-through in our retail footprint, and with the HERO acquisition, a product ladder that meets consumers at every stage of their personal safety journey. When put together, we believe this complementary framework positions Byrna to return to a meaningful growth profile with expanding EBITDA margins and strong cash conversion. We intend to host an Investor Day in the first half of next year where we plan to further lay out the financial algorithm and key drivers underpinning our 4 long-term pillars. We will provide additional information on timing in the coming months. As a final note, I'd like to highlight a few key additions to our senior leadership team that we've announced over the past few weeks. We are always looking to bring on great talent, and it is our belief that with these recent additions, we now have the team in place to execute against the strategy I've outlined today. First, we appointed Jim White as Senior Vice President of Retail and Channel Growth. And second, we announced Nate Secor as Senior Vice President of Brand and Marketing. Together, Jim and Nate will be focused on accelerating retail expansion, omnichannel growth, customer acquisition, and brand development. At the board level, we also announced the appointments of Rose Lopez Cavori and Dr. Matthew McBrady. Rose and Matt provide valuable and uniquely differentiated backgrounds in enterprise risk management, capital markets, corporate governance, and scaling growth-oriented organizations that will be a significant value add to our existing team as we build the architecture of Byrna's next phase of growth. To close, we believe we have the people, strategy, and operational framework necessary to build Byrna into a growth company again, larger, more profitable, and a more durable business over time. The opportunity ahead remains significant, and we look forward to updating you on our progress in the quarters ahead. With that, operator, we are ready to take questions.

Thank you. We will now be conducting a question and answer session. [Operator Instructions] Our first questions come from the line of Jeremy Hamblin with Craig-Hallum. Please proceed with your questions.

Good morning. I wanted to just start with some of the improvements that you saw in your web sessions. You noted that I think August was 29,000 sessions a day. Still obviously down from what you had been seeing. But have you seen some of that? Did that improvement continue into September? And were you also seeing conversion rates continue to improve in September?

Thanks, Jeremy, and great to hear from you. Thanks for the question. You know, we were really encouraged by what we saw from both a sessions and conversion rate in August. And, you know, we're really focused on now continuing that trend into 4Q. And what's exciting about that is not only is it really a higher intent period where we see, you know, more consumers will be engaging, but a lot of the initiatives that we've put in place from both the creative ecosystem and the new marketing initiatives will really be rolling out in full force. So we expect to see improvements over kind of the 3Q numbers throughout 4Q, which we're excited about.

Okay. Well, let me switch gears and ask a little bit about the wholesale business, which obviously had a tough quarter. I think down 64%. I wanted to understand, you've had some partnerships that were previously announced. I wanted to get an update on your retail door expansion. You had a deal with Academy, and a couple of other retail chains, but just wanted to get a sense of stabilization. I noted in the commentary that it sounded like the sell-through didn't hit your targets that you were anticipating. So why don't to get an update on that channel of business and then as we look ahead into '27 and beyond? How much of the recovery in the total business should we be expecting to come from the wholesale channel, which I think previously really had been seen as a big opportunity for growth?

Thanks. I appreciate the question. So if you think about where we are from a retail channel point of view, a lot of the previously announced partnerships, they are live and they are going. But we don't anticipate seeing meaningful doors added in those new chains throughout the holiday period. Typically, once you get to that point in time, you know, stores have set their assortment and their displays for the holiday period. So we expect that to pick up and ramp in 1Q next year from a door expansion point of view. We still definitely view the retail channel as an overall growth pillar for the business going forward and certainly an area where we think we are, you know, investing meaningfully to drive sell-through, which is really an area that we didn't have meaningful investments when we launched the programs a little over 1 year ago now. So increasing and ramping those sell-through programs is what's really going to drive us going forward. Lori, anything else you'd add?

And the only thing I'd add is we are doing with a couple of large chains. Some holiday bundles that are specific and exclusive to their locations. In 1 case, it's a color, and in another case, it's kind of a bundled product. So we think, you know, those should do really well, giving them something that differentiates them, and those are the type of partnerships and arrangements we want to do going forward to help them with their sales.

Okay, got it. In terms of the sell-through rates, you know, right? So you had, I think you know there was some, you know, stocking, inventory stocking that happened earlier and that's part of why you're seeing the percentage rate down as much in 3Q. But the sell-through rates, as you've, you know, improved on your marketing approach. Are you starting to see some traction, you know, with the sell-through and conversion rates in your wholesale channel?

Yes, so we have definitely started seeing that reorder activity pick up as we went through 3Q and saw that sell through, you know, be stronger than it had been kind of earlier in the year. And we don't have as good of detail at the store level with some chains, but those that we do, we've started to see that. See, you know, some traction across those platforms, but more encouragingly is the reorder cadence picking up to some extent. Another important factor there is we are expanding our e-commerce partnerships with our retail platforms so that we're enabling them to to drop ship. So when they are out of stock in their stores or don't have inventory in a certain region, we can backfill them and drop ship from our operations in Fort Wayne, as well as expand the overall assortment that they have available online. We believe that is another initiative that will help drive e-commerce over time and help drive our retail partners.

Got it. Okay. Another just high-level question. Again, as you continue to transform the business and you have your 4 pillars, if we think about this newer channel that hasn't been a focused historically law enforcement, professional security, those sound like some interesting opportunities. Law enforcement, of course, does have a fairly large entrenched player that has a pretty large penetration in the space. Just talk to me about the cost involved as you get into this particular category. You know, I wonder what type of investment needs to be made to make significant progress. I don't know that like the strategy on influencers and social media is maybe going to have the same impact on that particular channel of potential business. So, you know, what's the kind of the timing on when you think that channel, you know, law enforcement, professional security, that we can start to see some traction, or is that mostly going to be an international focus for you?

Yes, no, appreciate the question. And to be clear, you know, our near-term focus is absolutely on improving the D2C business, the D2C conversion, and traffic on the D2C side. So you'll see the majority of our initiatives in the very near term targeting that. As you think about law enforcement, professional security, and growth in internationally. Those become key pillars for the long-term growth of the organization as we continue to expand and grow. And we'll start making incremental investments in those areas next year, but they're not going to be, you know, things that meaningfully drive in the short term or become significant costs in the short term around that. I would say is focus initially will likely be on that security market because, as you know, the long-term sell-through in the law enforcement side of the house takes longer. Lori, anything you'd highlight there?

I mean, I think, you know, we've got some internal resources and as Conn said, we can make some small incremental investments there to start driving that. But there are certainly some large opportunities. And, you know, our product just fits a good need for some of these. And professional security is a great area where something less lethal, that they can carry is much more attractive to them and oftentimes than a lethal firearm.

Got it. Gross margin. The color on the change in ammunition production, super helpful. Can we assume then that this kind of mid-60s gross margin rate is sustainable on a go-forward basis and kind of a step up from that 62%? Or should we be a little bit more conservative than what you did in 3Q?

Yes, thanks Jeremy. We do expect that range, you know, near the mid-60s to be where we expect to be going forward, both, you know, with the operational efficiencies that we've gained and other initiatives that we'll work through in next year. So we expect that to continue on.

Thanks, Jeremy.

Thank you. Our next question has come from the line of Matt Koranda with Roth Capital Partners. Please proceed with your questions.

Hey guys, good morning. Maybe just picking up on the web traffic questions that Jeremy was asking, where does conversions sit right now, maybe over the last couple of months, if you want to do a blended number? I know you mentioned for the last couple of quarters, it's been sub 1%. That you said in the, I think in the prepared remarks and in the release that it had improved sequentially throughout 3Q. Are we now back to that 1% number or do we still have some wood to chop on that front?

Yes, no, appreciate the question, Matt, and good morning to you as well. We are not at 1% from a conversion point at this point in time. We have parts of the site, like the quiz that we mentioned and the program that are north of 1%, but if you think about where we are today, we are, you know, north of 0.6%, but we are not where we need to be kind of long-term. We expect that to continue improving throughout 4Q. You know, mentioned both, it is a higher intent program, but we are rapidly applying the learning that we're seeing from both the quiz and our sessions to really drive an improved conversion rate overall.

Okay, that's helpful. And then maybe 1 I wanted to hear a little bit more about if you can, I'm sure you can do this, but like, the new creators that have been added to the platform, some of the new influencers, obviously they're going to be additive to traffic to the site, but if you isolate sort of what you're seeing from visitors that are coming through those channels, is conversion accretive, I guess, and how you think about sort of driving better conversion over the next several quarters. Is that a good guy for you as you drive more traffic from those new influencers?