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zulily, Inc. (ZU)
Q4 2013 Results Earnings Conference Call
February 24, 2014 5:00 PM ET
Nancy Shipp - Investor Relations
Darrell Cavens - Chief Executive Officer
Marc Stolzman - Chief Financial Officer
Mark Vadon - Chairman
Deb Schwartz - Goldman Sachs
Mark Miller - William Blair
Mark Mahaney - RBC Capital Markets
Mark May - Citi
Justin Post - Bank of America Merrill Lynch
Shawn Milne - Janney Capital Markets
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At this time, I would like to introduce Nancy Shipp, Investor Relations at zulily.
Good afternoon. And thank you for joining us on our conference today to review our fourth quarter and full year 2013 financial results. With me today are Darrell Cavens, Chief Executive Officer; Marc Stolzman, Chief Financial Officer; and Mark Vadon, Chairman. Each will be available for Q&A following today's prepared remarks.
Before we began, I would like to remind you that we will make forward-looking statements during this call regarding the future events and financial performance, including our guidance for Q1 2014 and full fiscal year 2014.
These statements are only predictions based on assumptions that are believe to be reasonable at the time they are made and are subject to significant risks and uncertainties. You should not rely on these forward-looking statements as representing our views in the future and except as required by law we undertake no obligation to publicly update or revise these statements.
Our actual results may differ materially and adversely from any forward-looking statements discussed on this call. For a discussion of factors that could affect our future performance, results and business, please refer to our disclosure in today’s earnings release, our prospectus from our OPI, our annual report on Form 10-K, which we expect to file in the near future and other reports we have on filed from time to time with the SEC.
Also please note that during the course of this conference call, we may discuss certain non-GAAP financial measures as we review the company’s performance. Please refer to our Investor Relations section of our website to obtain a copy of earnings release, which contains description of our non-GAAP financial measures and reconciliations of non-GAAP measures to the nearest comparable GAAP measures.
This call is being recorded and a live webcast for our investors on our Investor Relations website and a replay of this call will be available there as well.
Now, I'd like to turn the call over to Darrell, our CEO.
Thanks, Nancy. Good afternoon. And welcome to zulily’s fourth quarter and full year 2013 earnings conference call. I'll start with a brief overview of our results for the quarter and then since this is our first call as a public company, I thought it will be helpful to everyone if I spend a few minutes talking about our history and business model.
I will then finish with some highlights from 2013 and some thoughts on our focus for 2014 before I pass the call on to Marc Stolzman, CFO to cover our Q4 numbers in more detail and give an outlook for the coming year.
Q4 2013 was a strong quarter for us. We ended the quarter with $3.2 million active customers, up 21% from the third quarter and up 101% from Q4 2012. Net sales for the fourth quarter grew by 100% from a year ago and revenue for the full year grew by 110% from the full year 2012.
Adjusted EBITDA for Q4 was $17.8 million or 6.9% of revenue, up from $4.7 million in the prior year. We are excited about our Q4 results and I want to thank the entire zulily team for their hard work during the year to make this happen.
We launched zulily a little more than four years ago, in January 2010, with the goal of building an enduring brand that could revolutionize the way mom shopped. On the first morning we launched in 2010, we sent e-mails to our members offering them products from three vendors of children's apparel and accessories with limited quantities that were only available for three days. That first day we took an $1,800 worth of orders. That seem like a good start of the time and from there the business has proceeded to grow at a rapid pace.
We kept adding e-mail subscribers and increasing assortment of merchandise. We kept hiring more employees and building more infrastructure to answer the demand. But along the way, we always stay true to some basic tenants that were with us on that first day.
We wanted to offer unique products that were hard to discover elsewhere. We wanted to price them well, so customers felt that they were getting great value and we wanted to the entire experience to be simple and entertaining. We wanted to create an experience that we are proud of and that was so good our members would come back every single day to see what was new and exciting.
If you fast forward to today, our model is still very similar, just much larger. We still launch new products on our website every morning at 9 a.m. East Coast Time in limited quantities and available for a limited time.
But we now launch over 4,500 new products every morning from dozens of brands and we send out e-mails and push our applications to millions and millions of people. In four years we have become a destination for people to come to everyday to find items that are special and unique.