Operator: Good morning, and welcome to the Kits Eyecare Fourth Quarter 2025 Financial Results Conference Call. This call is being recorded and available later today for replay. Your hosts today are Roger Hardy, Chief Executive Officer; Joseph Thompson, Chief Operating Officer; and Zhe Choo, Chief Financial Officer. Before we begin, I'm required to provide the following statement respecting forward-looking information, which is made on behalf of Kits and all of its representatives on this call. Certain statements made on this call will contain forward-looking information. These forward-looking statements generally can be identified with the use of words such as intend, believe, could, expect, estimate, forecast, may, would and other words of similar meaning. This forward-looking information is based on management's opinions, estimates and assumptions in light of the experience and perception of historical trends, current conditions and expected future developments as well as factors that they currently believe are appropriate and reasonable in the circumstances. Actual results could differ materially from a conclusion, forecasts, expectation, belief or projections in the forward-looking information, and certain material factors and assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. Management cautions investors not to rely on forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information and material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information are contained in Kits' filings with Canadian provincial security regulators. During today's call, all figures are in Canadian dollars, unless otherwise stated. And with that, I would like to turn the call over to Mr. Roger Hardy. Please go ahead.

Roger Hardy: Thank you, operator. Good afternoon, everyone, and thank you for joining us. At Kits, we're building a modern vision care platform, digital-first, direct-to-consumer and designed to serve the customer of today where they actually spend their time and live their lives. Our mission remains simple, make eye care easy for eyes everywhere. What differentiates us is how we execute, combining digital scale, premium product mix, embedded AI and deep, thoughtfully designed physical spaces that foster community connection and deepen engagement. The model and our plan continued to deliver strong results. Combined with disciplined digital execution, this model continues to drive structural growth and improving profitability. And now turning to our financial performance. In Q4, revenue increased 20% year-over-year to a record $53.9 million, and we delivered $2.8 million of adjusted EBITDA in Q4. In Q4 alone, we generated $6.4 million in operating cash flow. As I turn to the full year, revenue grew 27% to $202.5 million, and full year adjusted EBITDA was $11.7 million, marking our 13th consecutive quarter of positive adjusted EBITDA. We are growing at a premium rate while maintaining profitability and cash generation. Our glasses business continues to lead growth and expand our profitability. In the quarter, glasses revenue grew 32.7% year-over-year and glasses units increased 42%. Average order value rose 4% and returning glasses revenue grew 42.8%. Sales of digital progressives increased in units by 40% year-over-year, and sales of designer glasses increased 44% year-over-year. Gross margin on glasses increased to approximately 45% in Q4 as these higher-value categories are expanding our margin profile and deepening customer engagement. This is a mix-driven premium-led expansion. Turning to contact lenses, revenue grew 18% year-over-year in Q4 to $45.2 million. While new contacts revenue moderated sequentially, repeat contacts revenue climbed to $30.9 million, up 24% year-over-year. Across our entire business, approximately 66% of Q4 total revenue came from repeat customers, up from 62% in Q3. Average order value for contact lenses increased to $229. And our 5-year lifetime value for customers is now at $422. Lifetime value for customers acquired in recent cohorts is accelerating faster than those acquired prior to 2020. This demonstrates the health of our recurring revenue base continues to strengthen due to skilled execution by our team and the unique data capture characteristics of our model. Turning to our Kits Daily Contacts revenue. It was a growing and profitable part of our business and it increased 316% year-over-year in Q4. Average order value increased 10% sequentially, driven by growing adoption of larger pack sizes. Gross margin remained strong at 46.5% in this product. And repeat revenue continues to trend higher quarter-over-quarter. KITS Dailies is still early in its life cycle but the trajectory is highly encouraging. This product deepens our vertical integration, enhances lifetime value capture while offering customers a great product at exceptional pricing. And turning to our retail model, I'd like to spend a few minutes on the business. Our retail revenue grew 46% year-over-year. Optical revenue in store grew 65% and units per order increased significantly during Q4 promotions. Average order value grew 36%. Optometry now operates 7 days per week in our clinic, and we launched a contact lens fitting room to bundle prescriptions with Kits Daily trials, targeting a 10% attach rate. Our Toronto flagship is planned for late spring, and we continue evaluating additional locations in key markets. We're not scaling retail for footprint density. We're scaling a model that increases engagement, attachment rates and cross-category conversions. When I stop into a store at the beach in Vancouver's Kitsilano neighborhood on, say, a Wednesday morning, I'm greeted by a group of polar bear swimmers who do weekly polar bear swims in the ocean, then come to Kits, sit and have a coffee and talk about challenges and opportunities they face in the world. On weekends, I meet countless guests often lined up out the door who have stopped in to see and be seen while evaluating the latest Kits eyewear styles with one of our eyewear fashion consultants. We're building something unique, not just retail storefronts, but genuine community, and it's exciting to see the momentum and talk about the results. For this reason, we plan to expand into additional markets with Toronto opening spring 2026 and more openings to be announced shortly, all of which we envision doing much more than providing a distribution point, instead providing spaces to connect over coffee and conversations surrounded by beautiful glasses that help them see and be seen. We found these beautiful spaces can also be very productive. In Q4, our Vancouver store averaged 300 pairs of glasses sold per week and delivered annualized revenue of approximately $1,200 per square foot. Turning to product. Product design made another big step forward for us in Q4. In the quarter, our team introduced 8 new collections, 48 net new silhouettes and 148 distinctive color expressions, delivering premium, contemporary eyewear for Kits customers at a very accessible price point. Product highlights included investing further in proven silhouettes such as the Clyde capsule with optimized sizing and expressive transparencies in acetate as well as expanding our offering with the new-to-the-world Progressive Readers collection and the Pangolin 3 AI Glasses collection, which sold out quickly. We ended the quarter with over 530,000 frames in stock and more than 16,600 styles in our product portfolio. Maintaining the highest quality eyeglasses and constantly raising the bar each quarter has been our focus since the launch of our first collection. From the highest grade material to our German-engineered hinges to the latest in lens puck technology, our team knows that a repeat customer is earned and maintained after they've tested Kits frames every day. And the quality is as good on day 365 as it was on day 1. Now turning to technology and AI integration. The optical category is now in the midst of its most important shift in 100 years. AI glasses are rapidly becoming the newest form factor in technology. Looking ahead, we believe eyewear is evolving beyond just vision correction into a connected AI-enabled interface. Kits has been at the forefront of this movement to AI and AI glasses as a future driver of health and human performance. We now have 18 months of in-market experience with AI glasses and have sold out 3 generations of Kits Pangolins. In 2026, we will launch Gen 4 Pangolin, incorporating camera, video, voice and powered by a Kits app with full AI integration. Over 75% of AI glasses ordered on Kits have been ordered with a prescription lens and the average order value of AI glasses is over 3x our current glasses AOV. Yes, it's exciting. We believe that our strong start in AI and AI glasses has been dramatically aided in Kits' vertically integrated model. It's designed for where the market is going, not where it's been. Customers looking for AI glasses in every corner of North America can find the widest selection of AI frames on Kits. They can add a prescription lens with the click of a button and can receive them delivered right to their home in as little as a day. We can pass on the savings from our lack of reliance on thousands of brick-and-mortar locations and from our onshore automated lab to our customers. We see AI glasses as an emerging long-term trend and growth vector and a natural extension of our vertically integrated model where performance, innovation and prescription expertise converge. In addition to AI glasses, in Q4, we brought our OpticianAI technology directly into product pages and lens selection flows. OpticianAI still in beta on our site is increasing frame discovery, improving lens upgrade attachment and is driving conversion. It's still early days for OpticianAI, and we are excited to bring you more updates in the coming quarters. On our core business, in Q4, the technology team enhanced product discovery across both glasses and contact lenses, improved insurance UX in the U.S. and Canada, implemented an endless aisle automation, enabling an additional selection of more than 3,500 frames and introduced readers as a simplified new category. Our team has ensured that the latest technology is embedded throughout our funnel, not layered on top. Finally, as we grow at industry-leading levels, our operational discipline remains strong. Gross margin was 35% in Q4. Margins were affected by the timing of supplier rebates. However, excluding the timing difference, our underlying margin performance remained stable and supported by mix expansion in glasses. Glasses gross margin continues to expand structurally. Fulfillment improved as a percent of revenue and GA improved by 160 basis points year-over-year. Marketing increased to 16.3% of revenue in Q4, driving 88,500 new customers. As repeat revenue grows, we expect marketing efficiency to improve over time. We are balancing growth investment with operational discipline as we continue to take meaningful share. As we look at the capital markets momentum, we are now in our fifth year as a public company on the Toronto Stock Exchange. In FY 2025, our stock appreciated over 120% and trading volume reached record levels in Q4. Liquidity improved meaningfully, and we now benefit from broad analyst coverage and strong external validation of our growth trajectory. For Q1, we've outlined that our 2026 targeting $58 million to $60 million in total revenue, $10.5 million of that to come from glasses and $48 million of that to come from contact lenses with gross margins of approximately 35%. This quarter, priorities remain clear: accelerate our glasses and our AI glasses growth, strengthen our contact lens retention, expand prescription product offering with Progressive Readers and further integrate OpticianAI across the funnel. In closing, Kits is executing on a powerful, simple strategy. With that, I'll turn things over to Joe. Joe?

Joseph Thompson: Thanks, Roger. Since becoming a public company in January 2021, we focused on delivering balanced and consistent performance across our business and our financial statements. 2025 might have been our best year yet. Growth continued and the quality of the growth improved. We've gone from investing heavily to build the platform to a business that is now generating meaningful and growing profitability along industry-leading top line growth. This gives us the flexibility and the confidence to continue investing in the growth opportunities ahead. 2025 growth was broad-based and balanced across the business. Glasses revenue grew 36% year-over-year, driven by premium mix expansion and the continued scaling of our optical lab. Contact lens revenue grew 26%, powered by the recurring nature of our customer base and strong retention economics. Our Canadian business grew 38%, reflecting increasing brand awareness and the momentum of our Vancouver retail location. And importantly, working capital more than doubled, up 142% year-over-year to $15.3 million. We repaid our BDC term loan ahead of schedule, ended the year in a strong cash position and today carry zero long-term debt. The balance sheet is in the strongest position it's been since we went public. This isn't a business that's trading off one metric for another. We're delivering growth, profitability, cash generation and balance sheet strength simultaneously. And that's by design. The vertically integrated model we've built is designed to compound across all of these dimensions as we scale, which is a good segue to Zhe Choo to review our financials. Zhe?

Zhe Choo: Thanks, Joe. Gross profit in Q4 was a record $18.8 million, up 16% year-over-year. For the full year, gross profit grew 34% to $72.1 million and gross margin expanded 190 basis points to 35.6%. A meaningful driver of that expansion is premium lens upgrades, which accounted for approximately 42.5% of full year glasses revenue and grew 50.4% year-over-year, demonstrating customers' growing willingness to trade up and the effectiveness of our multi-tier pricing strategy in capturing that demand. Adjusted EBITDA in Q4 was $2.8 million or 5.3% of revenue. For the full year, adjusted EBITDA was at $11.7 million. Full year operating cash flow was $11.5 million, which translates into approximately 98% of adjusted EBITDA. That level of cash conversion tell us our reported profitability is translating almost entirely into cash with little divergence between earnings and cash generation. That's the kind of quality we want to see as the business scales. We enter 2026 well capitalized and with meaningful financial flexibility, the strongest liquidity position we have carried as a public company. That financial flexibility gives us the capacity to continue investing in the growth ahead. I will now turn the call over for questions.

Operator: [Operator Instructions]And your first question comes from the line of Gianluca Tucci from Haywood Securities.

Gianluca Tucci: Congrats on the good numbers. Glasses' growth seems to really be accelerating here, Roger and Joe. Could you unpack this a bit for us? What's driving it? Is it BOGO? Is it other things? Some insight there, I think, would be helpful.

Roger Hardy: Yes, sure. Gianluca, maybe I'll start and then turn it over to Joe. Just from a high level, it was really an exciting quarter for Q4 and as we've outlined into Q1. What stands out in the quarter is just the continuing strength of the platform overall. I mean I think it's the strength of the contact lens customer, that recurring nature, coming back. They're coming back and they're spending more. It is a very loyal annuity stream of customers. And as you're seeing and pointing out, they're starting to test us out and try us out on glasses. And so we're starting to see that some growth from that as well. So super exciting to see the lifetime value is expanding as customers try us on glasses. And then as we look out even further, thinking about how AI glasses are, as I touched on, 3x the regular spend and also just how powerful that component is going to be in our business, there's just a lot of positive things happening. Joe, anything you want to hit on?

Joseph Thompson: Gianluca, maybe just a few complementing points on the glasses performance in Q4. There was a number of initiatives that really yielded some growth. And you saw glasses really materially step up both on new and on repeat. I think one driver was reigniting investment in the U.S. Another was the influencer channel, which just continues to grow for us and we saw steady growth over 32% year-on-year in the quarter of active Kits influencers. And then we had great success on our buy one, get one free promotion, which launched in Q4 as well. So strong growth on glasses. Importantly, for us, I'm sure you noted the repeat revenue on glasses, which was at its strongest level ever in the quarter.

Gianluca Tucci: It's super fascinating and strong. And I guess following up to that on marketing, it seems like you're keeping marketing ROI quite healthy. Could you dive into the marketing efficiency that you're seeing? And how should we be thinking about 2026 from a marketing spend perspective and a marketing ROI perspective?

Roger Hardy: Yes. Again, maybe I'll start. I mean, great question. I think we've been very consistent over the last number of quarters. Marketing spend has been somewhere in that 14% to 16% of revenue, and it's been yielding quite nicely. So I'd expect us to continue to invest in the right type of customers upfront, building out that contact lens customer, also finding the right glasses customers. As you noted, we are seeing great healthy returns from that spend. So as we think about it long term, it's a great investment. We're getting significant ROI, return on that investment. And yes, I think it's -- that's the plan is we'll just continue making those investments. Joe?

Operator: And your next question comes from the line of Martin Landry from Stifel.

Martin Landry: Congrats on your good results. I want to talk a little bit about your high-level strategy. It seems that you are pushing revenue growth a little bit more than before. And I was wondering if this is a new shift in strategy with a bit of a greater focus on top line. I'd love to hear you talk about that a little bit.

Roger Hardy: Yes, Martin, nice to -- thanks for calling in. I think as we think about Q4, and it's really probably more practical, pragmatic to think about growth in yearly terms. And I think we've said historically, our target is to grow somewhere around 25% to 30%. And so as we look at the last year, we grew 27% on the year. We're seeing increasing leverage from that growth. But more specifically, just as it relates to growth, Q4, there was a big uptick last year in Q4. Over the course of the year, it kind of smooths out. So I think we're thinking about investing in a balanced way. We obviously like our business very much. And when -- there's probably a reason we've shared these return numbers. If you look at the number of customers, it's really inflecting from a return standpoint that we're getting better and better at serving customers, so they come back sooner. They're spending more. This is the kind of flywheel that you dream of in business. And so to the extent we can continue to accelerate acquiring customers, putting them into this flywheel, serving them in a way that wows them and compels them to return, gosh, we can't think of anything better to do with our time or money. So -- and I guess, at the end of the day, we're seeing the lifetime value compound. And that's the exciting piece of the business. We're combining customer growth with increasing lifetime value. And so the long-term economic potential of our platform, it becomes significant. And I think you're really starting to see that this quarter. I mean if we ask internally here, we've got a lot of enthusiasm for the model, and we really think it can support the creation of a multibillion-dollar vision care platform. We're just so early in the going here with one location and probably market awareness in one market, as you and I have spoken about previously. So I'll stop there. Anything to add? No? Okay.

Martin Landry: Okay. And is there a potential to still reach double-digit EBITDA margins when you get to -- I think you had an aspirational goal of hitting $500 million. So when you get to that revenue level, do you still think you can hit the double-digit EBITDA margins?

Roger Hardy: I mean, absolutely, Martin. I think if you look at these numbers, even you might believe that if you -- I mean you just need to take care of this terminal value out maybe 8 or 10 years, and you tell me what your model spits out. If I look at it, even on the most conservative level, no question, we're seeing margins expand as we talked about. So just to back it up a bit, contacts is this recurring revenue engine. We've always said the contact lens customers, it's 20- to 30-year-old individual. Then that person moves into glasses in the 30s and 40s and then they move into progressives in the 40s and 50s. Each time they age, their eyes don't get any better and the value -- the economic value from the company standpoint and also from the consumer standpoint, increase. We're delivering more value per customer as they age, and we're also generating more revenue, more gross margin and more EBITDA. Now you layer in -- and again, there's a reason we broke out for you the Kits contact lens sales. It's still early, but it's a higher-margin product. It's growing very quickly. Now I blend in glasses at a higher margin, growing very quickly. Now I blend in specialty products, as Zhe outlined, growing very quickly in that mix at again, higher margin. Last but not least, AI glasses, where 75% of them are including an Rx lens, something that we uniquely are able to do that differentiates us over everybody in the market who thinks they're going to sell AI glasses. So yes, it's -- there's no question that we will be in the double digits of EBITDA and happy to talk more with you offline about how to model that. But yes, when you think about the terminal value, maybe 10 years out, it's easily there.

Operator: And your next question comes from the line of Luke Hannan from Canaccord.

Luke Hannan: I wanted to dig in a little bit more on the retail strategy. Roger, I hear you loud and clear that this is more about generating brand awareness and ultimately, I think, funneling those customers more into the online channel. But how should we think about, I guess, the overall profitability? I mean you did share the sales per square foot, and I appreciate that. But can you help us think through the profitability of the new store that will be coming in Toronto and the other stores you have planned, how quickly you expect it could get maybe to the level of the Vancouver -- the Kits location? And then more broadly, how does this -- do you expect it to potentially be dilutive to the overall margin of the retail strategy? And if not, why not?

Roger Hardy: Yes. Great. Luke, I mean, great questions. Again, from a retail standpoint, we are excited to get our Toronto flagship open. We've seen great results in our Vancouver location. We've probably been working on building it out over a couple of years and see, as I said, the market around Vancouver, a real strength, a real community buildup around that location. And in the end, when you're building a consumer business, you're trying to generate word of mouth. The most efficient way to grow your business is that word of mouth, someone having a positive experience with your staff as a guest or with -- ideally with the product that they've engaged with. So we have seen great results from that store. It's been very accretive to brand awareness. It's been very accretive to growth. It's been very accretive to earnings and especially when I include the revenue that's derived from the markets surrounding the store, from the market of Vancouver itself. People travel from all over Vancouver just to come into that store and engage with the location. Literally, I mean, you see it on a weekend. It's lined up out the door now. So it's highly, highly productive. And again, we've given you some of the metrics there. That's the reason to expand it. Now it's a great location. So we have to be discerning. We have to be disciplined as we always are in terms of what locations we want to expand to and which ones will deliver a similar kind of community experience, a similar brand enhancement and community creation. And so we believe we found that type of location in Toronto, and we're continuing to look in Calgary, for example, Edmonton and other markets where we think there's great possibility. So that's kind of how we're thinking about it. We see it as absolutely accretive. Again, that the contact engine can bring customers in. I mentioned we have 7 days a week now of our optometrists. We've had to increase the number of people there because one optometrist was just overrun. So we can use the contact lens business to bring people in, let them engage with the eyewear in person. And that helps us, again, have a unique differentiated strategy that will amplify that location. But that was longer than I meant to be. I'll turn it over to Joe to see if he'd like to add.

Joseph Thompson: Luke, just maybe a few small points here. So on your question of is it accretive on the -- just the economics. One thing that we've seen in the Vancouver store is the -- it is gross margin accretive. Folks are coming in, buying more than one item, looking at premium lenses. So we've been happy with the performance on the gross margin line to your question. But for us, I think as Roger outlined, the greater opportunity is the awareness build. So almost exclusively, when we've seen awareness increase, we've seen traffic follow and revenue follow. And Vancouver is just a perfect example of it. It's almost a positive correlation in the surrounding area. And so we're really excited. As you think about the Toronto market, it's almost a mathematical equation, about 6.5 million people in the Greater Toronto area. And as we think about those folks hearing about events that we're having in our store on Queen Street, seeing it as they drive by, we're really excited about the shadow benefits that, that will provide us from awareness, from traffic and from revenue in the Toronto area.

Luke Hannan: For my follow-up here, I did want to unpack, Roger, you shared the LTV, the 5-year LTV number there and then also mentioned that the new customers that you're seeing being brought in actually have higher LTVs as well. And I imagine that does, if we just think about how this waterfalls down into the P&L, a higher LTV customer, presumably the customer acquisition cost has not grown quite as much as perhaps as the LTV has. So that means it should be overall accretive to margins. Can you confirm, I guess, that the new customers you're acquiring today when they do come in and reorder that still is -- it's overall additive and accretive to your margin profile?

Roger Hardy: Yes, absolutely. I think -- and as we said, we're seeing that customer be stickier, return more often at higher LTVs and gross margins continue to expand. As we pointed out, you have a bit of a noise in last year's Q4, but we're continuing to see gross margins, again, it probably makes more sense to look at it on a longer period than because you're going to get a few ups and downs quarter-on-quarter. But absolutely, over the long term, it's very accretive and it is continuing to grow. Yes, from a lifetime value standpoint, the contact lens customers are generating $495 of revenue per year. Margins have certainly trended up. You could go all the way back to 2020 to validate that. And glasses purchases further expand that relationship. So I think we're seeing -- well, I know we're seeing that this customer acquisition is really creating a long-duration economic asset. It's a great model from that standpoint. And as the repeat revenue continues to grow, Luke, we are beginning to see meaningful operating leverage. You saw adjusted EBITDA grow significantly faster than revenue. Is it going to be a straight line? No. But it demonstrates really the platform economics they're improving. And again, the trend, if we look back out more than week-on-week or month-on-month, we'll start to see that trend emerge. And that's really, like I said, the place you want to be as you create a super high-value vision care platform like we're doing.

Operator: And your next question comes from the line of Matt Koranda from ROTH Capital.

Matt Koranda: Great work. I wanted to start off on AI glasses and the traction that you're citing there. Just curious what you're seeing in terms of demand for your Pangolin product versus some of the other large marquee brands like Ray-Ban Meta, what you're seeing on sell-through there? And then I know it's off a low base, but what's the best way to think about unit growth potential in AI glasses over the next few years, maybe a unit penetration percentage of your overall glasses would be helpful if you have something in mind as we kind of think about how to model this out.

Roger Hardy: Wow, Matt, just a softball to kick us off. Okay. No, I think that's a tough question to think out to the specifics on how big AI can get. It certainly is a compelling and interesting opportunity. We're glad to be in it early with multiple quarters behind us. We do have the widest selection, as we've touched on. We are seeing some great early trends like we talked about, 3x the regular value, 75% are including an Rx. We think we can deliver faster than anyone else in that capacity. So all those things give us confidence that we're in the right place in a category where it is getting started, and it's doing well. We haven't broken it out as of yet. So it's less than 10% of our revenue at this point. But it could very quickly become more meaningful. We've certainly allocated time and resources. We've got a version 4 coming out very shortly. Our expectation, again, when you have 1 million existing customers that are returning on a regular basis, that's the platform piece. And then we start to layer in glasses, sunglasses, then you think about an AI pair of glasses that you also want sun in. One of our Board members had a Pangolin pair that he was out bicycling on the weekend and telling us about and capturing video where he's out mountain biking and capturing the trail as he's riding. So I can see a world where you're not just prescription, but you've got that in sun, you've got it in photochromatic or transition, so it's working in light and dark. So all kinds of add-on capabilities. So I think the important part is secure the customer, take great care of them, make them a loyal Kits customer, make them part of the community set up in a way that they can engage with our brand, where they are -- feel like a guest in our store, both online and offline, and where we have the opportunity to cross-sell and introduce them to AI glasses and other high-value solutions for optical. Joe, what do you want to touch on there? There's got to be something.

Joseph Thompson: That's great. I'm sold.

Roger Hardy: All right. We'll leave it there.

Matt Koranda: You handled it well, Roger. So on the -- I guess on the guide for the first quarter, I understand there's kind of limited flow-through from sales into the EBITDA line. So that implies there's some investment still going on through the P&L, which I would assume is in the form of marketing. But maybe if you can call out anything that we should be thinking about in terms of reinvestment through the P&L in the first quarter? And then how should we think about flow-through as we kind of head into the latter portion of the year? I assume that should pick up as scale grows for the rest of the year, but maybe just give us kind of just the qualitative shape of how you think about it.

Roger Hardy: Yes. And we don't want to look too far out over our skis. But absolutely, we are thinking about when we have this predictable economic retention engine in contact lenses growing, we think it's important to acquire customers early. We think we're seeing that expansion now of wallet share into glasses. And we're beginning to see that operating leverage. Over time and over the year as it progresses, we do think it expands. I guess to some extent, you've got a model and we've got some models, but there's a best case, a median case. I don't think our model is working. It's not working that hard right now. There's a lot more opportunity for upside in terms of EBITDA, in terms of gross margin expansion. So that's kind of where we see this year and even looking out a little further, I mean, that's how this looks to be playing out is -- and again, track back to our 2020 gross margins, have a look where they were, have a look at what we said we were going to do. And I think we're -- we've meaningfully improved them, and that's kind of the trajectory. I suspect that's what we target, and that's what we suspect continues.

Joseph Thompson: Matt, so I think part of the reason that we wanted to include a little bit more on LTV is just to share some of the thinking and some of the data that we're seeing. So I think as you heard in the prepared remarks, on the contact lens business, it just continues to be the strong recurring engine for growth with LTV, 5-year LTV about $495 across the whole business, 5-year LTV, $422 and the cohorts getting stronger over time. So customers are spending 170% of their original investment in under 4 years. And the recent cohorts getting even stronger. And so as repeat hits its highest level, which we saw in Q4, we look back on our business to say, each quarter, we've shown the ability to acquire young vision-corrected customers and then retain them at a very high LTV. And so should we stop or pause on bringing more new customers in and because we know what the economics of those customers look like as they go through the model and as they retain. And that's why you saw in 2025, a record number of new customers come in, 30% we added 393,000 new customers, which is just future revenue streams to help our platform economics. So as you'd expect, we're going back and assessing that every quarter. But at this point, it feels like this model is working extremely well. And as we add new customers, we're just building the platform economics for the future years.

Operator: And your next question comes from the line of Doug Cooper from Beacon Securities.

Doug Cooper: Congratulations on the quarter. I just want to talk about the consumer for a second. What's your feeling on the consumer? Obviously, it looks for sure there's an economic slowdown, both in Canada and the U.S., same-store sales growth from a number of other retailers is, call it, muted at best. It seemed in one sense to play into your hands from a cost perspective, were low. I mean there's not a lot of -- people still need to buy glass, they need to see. So it's a purchase -- it's a bit of a nondiscretionary purchase, and your pricing seems to play into the hands of where the economy is at right now with the consumer. I was just in an optical store the other day and designer frames are $500 and higher. So how are you feeling about the consumer in the business model right now?

Joseph Thompson: Doug, yes, thanks for the question. On the inputs, the inputs are strong. As we look at traffic, conversion, revenue, AOV, all positive, all continuing to improve. So we're seeing what you're outlining that more customers are coming to our platform each quarter, and that's giving us the confidence to really invest in this moment. I think more broadly speaking, our view would be that across industries, but especially in this one, the retailers and the brands that are keeping costs low ideally through vertical integration that are avoiding cost increases in this moment and that are introducing new innovation at a rapid pace, almost all are doing well. And we're working hard on all 3 of those areas. And I think one small area in Q4 where we saw a great return was buy one, get one on the glasses side. If you think about the average cost, you outlined it, the average cost in the U.S. last year for a pair of prescription glasses was approximately $350. So even if someone else offers a buy one, get one free promotion, the customer is still paying $350 to $400. And at our price points, helped by vertical integration, we saw a strong word of mouth as folks were sharing buy one, get one. And so we've got high expectations for our business in 2026 based on all the elements that you called and all the inputs we're seeing on the business from traffic to AOV.

Doug Cooper: So when you gave an outline for Q1 glasses revenue of $10 million plus, can you give us an idea of the geographic dispersion of that $10 million? I mean I'm assuming a lot of it is still in BC where the brand is more recognized. Like I'm just trying to understand when you move into Canada's largest market here in Toronto, like how much revenue do you get from glasses today from Southern Ontario? And what do you anticipate the impact will be of the store there and the brand building exercise?

Joseph Thompson: Yes. Thanks, Doug. It's a good set up to kind of our investment in the Toronto location that's coming later in Q2. I think we have seen a strong uptake across many markets in Canada, led by Vancouver, driven by awareness. So almost exclusively, when awareness grows on Kits, we see traffic and revenue follow. And so the way we think about the Greater Toronto market, again, almost as like a mathematical equation, kind of 6.5 million folks in that Greater Toronto area, and we have a huge awareness opportunity there. And so we expect to close a good portion of that awareness gap in the next 2 quarters with all the news and excitement of a new store and promotions in the area. We do have a great -- I guess, back to the platform, we have a strong base of about 1 million -- just over 1 million active customers across contact lenses and glasses spread throughout North America. And so we're already kind of coming into the Toronto market with likely tens of thousands of active customers already in contact lenses. And so that's just even more opportunity, we think, grow awareness first, see traffic follow and see revenue right behind it is how we're thinking about the Toronto market.

Doug Cooper: Perfect. And just my last one. Trade barriers seems to be ever present conversation. What's the latest update as far as you're concerned in terms of tariffs and the impact it may or may not have on the business going forward?

Roger Hardy: There's always lots of variables as it relates to what could or could not happen. To date, it's not been a material impact one way or the other. Obviously, the change from de minimis does have a slight impact. It changed the way we file and enter things, but not really a material impact from an economic standpoint. So we're continuing to monitor the situation. It's dynamic. Why we have a great team at Kits and we really do is because they're able to manage and solve these problems before they become problems. The challenges, they fix the challenges, and they have been very, very good at resolving those challenges. I think fulfillment, we could talk about fulfillment more specifically cost and how well they've performed over the last 6, 8 quarters. But I'll probably leave it there just from a high level. Does anybody want to hit on it? Zhe, you want to hit on that?

Zhe Choo: No, I think Roger put up on it very well, like from a fulfillment expense perspective, if you look at the trend of the cost of -- fulfillment cost as an percent of revenue, we see that trending down. I think that really speaks to the volume of our -- the cost efficiencies in the lab -- vertically integrated lab that is able to turn the glasses over -- contact lens over at a speedy time, right? So I think that really speaks volume to the team that has been built up and that also translates to the efficiencies that we're seeing from a P&L perspective.

Operator: And your last question comes from the line of Frederic Tremblay from Desjardins Capital Markets.

Frederic Tremblay: You mentioned recent cohorts of returning customers have been spending more. Just curious if you could maybe give a bit more color on the main sources of that increase in AOV. Is it mainly lens upgrades or higher price frames? If you can maybe share a bit of details on that? And then maybe as a follow-up to that, do you see additional opportunities as in terms of add-ons or other sources of AOV increases to keep that trend going?

Roger Hardy: Yes. Great. Thanks, Frederic, and thanks for hanging around to be on the call. Yes, I'll let Joe speak specifically to kind of customer value creation. But as we touched on, the contact lens customers are generating about $495 of revenue over that 5 years. Our belief is that with glasses purchases, it will further increase lifetime value as that relationship deepens. And so like so many businesses have a 1x or 2x purchase, but we're really seeing customer retention be so high. And that's why you see 63% of revenue is coming from repeat customers, and it really supports us in terms of marketing efficiency getting better and that cohort profitability over time getting better. Maybe I'll let Joe touch on just from a marketing standpoint, the other opportunities to continue to grow that.

Joseph Thompson: Fred, great to hear from you. The nice thing about our glasses business now is it's getting to a nice scale. And as we outlined in our Q1 guidance, tracking to grow by another 50% year-on-year in Q1. And there's a number of franchises within that class of business. So as we think about digital progressives growing over 40% again in the quarter and the year and continue -- we see that continuing on in 2026. Premium lenses, the same. And maybe one kind of unlock that we discovered was in Q4, you're constantly just adding new tools to the toolkit and the team discovered this consumer insight that customers typically, when they're shopping, in particular, for glasses, get down to their last 2 choices, and it becomes a debate, which one should I choose? Let me wait, maybe I'll check with my significant other, my friends and come back. Well, that insight is really kind of what part of what went behind buy one, get one free. And now the customer can say, well, I'm done on my last 2, I can get them both. And so that's been a driver of conversion initially, and we're excited about it. Premium lens attachment, and we're excited about that. But then we're also seeing customers -- repeat customers come back. So even though it was initially an investment in new customers, we're seeing the repeat profile really be interested in, now I don't have to choose, I can get them both. So more behind that, there's many parts to the glasses business. Marketing team has just done an unbelievable job on everything from influencers to buy one, get one to reigniting the U.S. business, but those are a few.

Roger Hardy: And probably the last thing in there, if I could, Frederic, is really just the quality of the product that the team has been producing. I'd be remiss if I didn't call it a product team. The product has just been getting better and better and better each quarter, each year. And that's the real annuity is when people get a pair of glasses from us and they're wowed by not just the experience of buying online, how quickly it comes to them. But wow, this is a great pair of glasses. The lens is crystal clear. As Joe likes to say, mouthwatering is always the target. So a mouthwatering pair of eyeglasses. Yes, so that gets us excited as well about what is the long-term possibility on that product.

Frederic Tremblay: Yes, that's great. Maybe just a quick last question for me. It feels like contacts are kind of the entry to the platform for some customers. As you think about building awareness in Toronto and eventually other markets, you'll obviously have that showroom and the glasses will be available. How do you think about how the product mix will play out initially in those new markets between contacts and frames?

Joseph Thompson: Sure, Fred. Yes. No, I think initially, we will see probably some more growth out of the gate on glasses in new markets that we come into. But don't rule out just how powerful the annuity stream can be with the contact lens business. We saw, again, on a bigger and bigger base in 2025 on the fiscal year, 25% growth on the contact lens business. Now that's helped by quite a bit of repeat. But I think to your question, as we go into new markets and bridge that awareness gap, we will see more acceleration faster on the glasses side.

Operator: Thank you. And there are no further questions at this time. I will now hand the call back to Mr. Roger Hardy for any closing remarks. Please go ahead.

Roger Hardy: In closing, Kits is executing on a simple but powerful strategy, grow faster than the category, increase premium mix, strengthen recurring revenue, embed technology into every stage of the customer journey and scale our retail with discipline and community focus. We are building a structurally stronger vertically integrated vision care platform, and we believe the opportunity ahead remains significant. I'd like to thank all the investors who've joined us for the call today and look forward to updating you on progress as it continues. Thanks for joining. Have a great day.

Operator: And this concludes today's call. Thank you for participating. You may all disconnect.