All right. Thank you. Good morning, everyone, and thanks for joining us at the 2026 Raymond James Institutional Investors Conference. I'm Rick Patel, Senior Research Analyst covering softlines, retail, global brands, and digital commerce here at Raymond James. Thrilled to be hosting FIGS, which is a digitally native company with selling medical scrubs that sells product globally through their own website and an emerging retail footprint. Very happy to have Trina Spear, who is Co-founder and CEO, as well as Chief Financial Officer, Sarah Oughtred. Thanks so much for being here. Trina, I'll turn it over to you.
Great. We have a little film for you 'cause we find some of the times that this isn't as fun, and we like to make things fun. We're gonna show you what this brand is all about and what our company's about, we'll get into it.
Thank you for being in that job. This is for you.
Hi, I'm Dr. Grunt. I'll be your surgeon today.
Can I call you by your first name?
My first name's Doctor.
Room 305.
You're gonna write me up for eating? Okay, that's fine. I gotta go. The patient's calling.
Mommy, I got accepted into school. Lenny! Electric lady! There we go. There we go. Thank you, FIGS. You've got me seeing stars.
Thank you, FIGS, for making this happen.
Thank you, FIGS. Diamonds too. I know that in time it could be all ours. Brighter than ever. Your love is such a dream come true. I know I need you. I know I need you. I'm Noah Wyle, and I am not a real doctor, but I've played one on television for most of my adult life. Trying to find the in between. Fall back in love eventually. Yeah, yeah, yeah.
breast cancer. cancer. Like, actually cancer.
Sweeter than sweet but tastes like tea.
Hey, FIGS, can you make me a tuxedo that's as comfortable as the scrubs I wear? They went and did it. Noah Wyle. To anybody who's going on shift tonight or coming off shift tonight, thank you for being in that job. This is for you. Great video. For investors new to the name, Trina, can you give us a quick overview of FIGS and why you founded the company?
Sure. We are all about creating the best products for healthcare professionals, doctors and nurses who save lives and help patients and cure diseases. We disrupted an industry that's massive, that had been around for hundreds of years, that is really ripe for disruption. We created a product that's premium and technical and functional and comfortable so that you can look good and feel good and perform at your best. Doctors and nurses are on 12-hour, sometimes 24-hour shifts, and they need a product that's gonna perform. The other thing that we've done is we built a brand in an unbranded space, right? A brand that means something. You saw that in the film of who we're supporting and how we show up for them, that's a big, really important part of what we do.
This industry was is a massive industry. It's mandated. Healthcare professionals need their uniform to go to work and do their jobs. It's replenishment driven. They come back over and over and over again to replenish. It's non-seasonal. It's non-cyclical. It has all these attractive dynamics, but there was no company that had a great product or a great brand, right? What we did was we really branded this unbranded industry. We de-commoditized what many believe was a commodity product, and we built a community around a profession. There's 140 million healthcare professionals around the world. We have 2.9 million active customers. There's a long way to go, and healthcare professionals deserve better, and we're the brand for them.
The past several years have been pretty eventful.
Mm-hmm.
You IPO'd during the COVID boom. There was a period of a lull. Now you're back to seeing solid growth. Q4 earnings were last week. You reported revenue growth up 33%. What did you do differently in 2025 that drove that acceleration?
Yeah, I mean, I think there's, like, three things that I think are you should focus on. The first one being the product innovation. You know, we are creating categories for this industry. We are solving real-world problems for healthcare professionals every day, not just within our scrub wear, but also within our under scrubs, our outer wear. Why are you wearing a Patagonia jacket that's meant to go hiking? You should be wearing a FIGS fleece that has a pocket for your stethoscope, that's antimicrobial, that does all these things that help you perform. We have compression socks and footwear and accessories and all these things that we're really outfitting healthcare professionals on shift, off shift, head to toe, throughout their day, right? We've become a lifestyle brand for the healthcare community.
You know, I think that it's really about product innovation. The second thing is around our marketing. You know, I would say we always have been known for this, like, top-of-funnel storytelling. You saw that in our campaigns. In starting in I would say we had this huge COVID acceleration, as Rick mentioned, and then there was a bit of COVID overhang along with the rest of the world in 2023. We worked through that inventory. We leaned more into conversion-based tactics. Going in 2024, we were in a cleaner position, and we leveled up once again to this amazing top-of-funnel storytelling. We outfitted Team USA's medical team in the Olympics in Paris in 2024. Who saw that campaign, Head, Shoulders, Knees and Toes? Check it out. It's awesome.
Then we had some of our most viral campaigns throughout 2025. Where Do You Wear FIGS was our campaign for 2025, amazing year. International Women's Day, I think we had 20 million views across platforms. You don't see that with a campaign. Nurses Week, massive impact. Back to school and then holiday. What we did with Noah Wyle, I mean, we created a tuxedo for him to wear on a red carpet, and he talked about it right before he won for Best Actor. Then the show, The Pitt, by the way, every actor on The Pitt is in FIGS, that whole show won, and then they've won every single award show since, as well as Noah Wyle.
You know, these viral moments in these campaigns have generated a lot of brand heat. You know, we saw this a year ago, and the leading indicators around our organic traffic, our direct traffic, email subscribes, open rate, our social engagement, up around 2x-3x what it was the year prior. We continue to see those leading indicators perform. What you saw in the quarter is a culmination of amazing product, amazing marketing, and then the third thing is a normalization of the industry. That's a massive tailwind. We had this acceleration, we're in overhang, and now the industry is normalizing. Healthcare professionals are the backbone of any functioning society. They are the fastest-growing job segment. All of the job gains in the January report, all of them, healthcare jobs. Okay?
There's a massive shortage of doctors and nurses around the country and around the world. There's more and more of a need for doctors and nurses around the planet to show up and help all of us laypeople so that we can live longer and be healthier. That's a fact, right? As we get to be the brand for this industry, it's a really exciting time. As this industry is normalizing, for the first time ever, we're the only public company in the space. No one has seen what the medical apparel industry is. Been all private equity-backed companies because they've been these cash cow companies that have just literally been owned by private equity. We're the first real public company in the space. We're excited to see how the markets react as this is a incredible industry, incredibly attractive.
We've widened the moat over the last few years, and now are the leading product and the leading brand, and we're gonna continue to lead this industry as we move forward here.
One would think that scrubs are a commoditized category, yet you have a differentiated product and a strong following. Can you unpack what's new from a product and fabric standpoint that's driving this strong demand? How do we think about the pipeline of newness in 2026?
I mean, we became famous for, known for our FIONx fabrication. It's proprietary to us. No one's been able to rip it off. We try to rip it off, and sometimes we can't even rip it off ourselves. That's how good it is. It's functional, it's technical, it's really comfortable. You know, you take it out of the dryer, you don't have to iron our scrubs. It doesn't fade on the after the 100th wash, our scrubs don't fade. This is a really important part of what we do. You wanna be comfortable. You don't wanna hold your pants up in a surgery. You don't wanna pin your wedding ring to your bra strap. This is what healthcare professionals were doing prior to FIGS. It's crazy, right?
You need a product that's helping you perform in your job. We launched FORMx. FORMx is a little bit of a has more stretch than our FIONx fabrication. It's for different use cases, different environments. That was an important add-on that we launched last year. We just launched as part of our Winter Olympics, I don't know if you saw our campaign with Lindsey Vonn and her medical team. Obviously unfortunate what happened with Lindsey, but her medical team was there. They showed up. The campaign was about how they showed up. They saved her leg, which is amazing. I mean, her resilience and strength is unbelievable.
Coupled with that, her medical team and their resilience and their strength and what they did to build back her body to break records, unbelievable. You know, I think that with that, we launched FORMx, which is a higher impact fabrication. It's made for more intense and extreme environments. Now we really have a great product or fabric portfolio across our scrub wear. In addition to that, to your point, we're creating categories across our entire layering system, right? From our underscrubs to our outerwear, compression socks, footwear, it's really about all the different products and fabrications that you need to do your job and do it well.
Yeah, you touched on it, but I think it's important to emphasize that it's more than just medical scrubs. You do have a pretty big non-scrub assortment. Can you just unpack that for us? You know, where do you see the most momentum in that business and the opportunities ahead?
Yeah, I mean, I think even taking something like compression socks, right? We've built our first ever last year medical grade compression socks. They're patented. We worked with ArchTek Technology to build the first ever patented medical grade compression sock. You can get like 15 to 20 to 30 to 40. Let's say you have a blood clot or plantar fasciitis or anything that you're dealing with from a medical standpoint, we now have that as a really great addition to that category. That's just one category. Our bags that we launched in Q4 sold out incredibly quickly. What you saw in the quarter is really broad-based growth. It's not one thing that's driving this.
You know, whether it's within scrub wear, whether it's within non-scrub wear, but I think the important piece of all of this is that our business is beautiful from a low SKU count, high volume perspective, right? It's 17 styles that are driving over 60% of our revenue. Right? This is, you know. There's very little fashion risk here, right? People are coming back over and over again to buy the Catarina top and the Isabelle pant. That's an incredible thing that other apparel and fashion businesses don't have and they can't say. When we do launch newness, which we're launching new colors, new styles every single week, right? When we do launch that, we're buying shallow, we're testing, we sell out, and then we...
Okay, it has to sell out about 3 times before it can even get added to the core. Once again, we're not taking this inventory risk because the core... By the way, these core styles, these 17 styles, the majority have been around for a decade or more, okay? That's what 60% plus of our business. That's what makes this business so beautiful, is that the little fashion risk, the little inventory risk, when we do take bets, they're shallow bets that then we can lean into as we gain traction and as they sell out.
FIGS has also made strong progress with globalization. I believe there's more to come there. Can you talk about which markets you're furthest along in and how you can apply those learnings to less mature ones?
Sure. I mean, that's been another incredible thing here, is that international, we're now in 59 countries, okay? We have a go deep, go broad strategy. There's markets that we are really doubling down in in the term from a marketing standpoint. Those markets are Canada, Mexico, U.K., and Australia. When we enter a market, we really see what that demand is. We're able, because we're a digitally native company, we have more data on our customers than any other company I know. We were born in the internet. We have all of this data. We know exactly who's coming to our site before we open a market. That enables us to know where to go next, right? We open that market, we turn on digital marketing. We're able to see that traction and how that goes.
As that market scales, as we gain momentum, we're able to turn on and build out our ambassador program. We get the most influential voices in healthcare. We now have 600 around the globe that are talking about us within their institution. "What did FIGS just launch? Did you just see their amazing campaign? That's awesome." Right? They're in the break room, they're on their way to their next patient, they're getting a coffee, all talking about FIGS. Our biggest customer acquisition driver is word of mouth. Every FIGS customer is a walking billboard acquiring that next customer for us. That is truly a unique situation because of who we serve and what environment they're in. We layer on top activations, events, top-of-funnel marketing.
We're able to go deep in markets that are scaled, and we're able to go broad because it's 2026 and we're in the age of technology and AI. We're able to turn on all these other markets because of the the age that we're living in, see the traction, and gain momentum over time. Take a market like China. China we launched a few months ago. We're already top in our tier on Tmall. Amazing, amazing success there. You know, I think as we continue, we're planning on turning on another 20 markets this year. Okay. International grew 55% in the quarter. We're continuing to see momentum this year and across our entire business, I think that's our story. We're doing all the things the hard way, the right way.
This is broad-based growth, not just across category, but also across region, geography, across channel. It's not one thing that is driving this company into the future. It's about doing the hard things the right way with a real purpose and a real mission to serve healthcare professionals at the highest level. That's what we're gonna continue to do.
Let's talk about physical locations. FIGS started off as a website. You now have, what you call Community Hubs.
A website. I like that.
Yeah. Start off as a commercial, online site.
Yes
... you know, now you have more of an omni-channel presence. Can you just talk about that journey, and what investors can look forward to?
Sure. The best brands in the world, most iconic brands have stores. We call ours Community Hubs. We now have five: L.A., Philly, New York, Chicago, Houston. Some of our top markets. Obviously, we would open stores in our top markets. Another benefit of being digital first and being born on the internet. One of the amazing things is that we are now gonna do close to $700 million in sales, and the 95% plus of that is e-commerce. Unbelievable. 80% of apparel sales globally, in the world, are offline, in stores, okay? This is a massive opportunity. We only have five today. We're opening four more this year. People wanna feel and touch and try on a product. They wanna talk to somebody and be educated. Why is this amazing?
How can I benefit from this? That's really, really great. We're seeing 40% of our customers in our stores being new to the company, right? Maybe they don't, maybe they don't shop online. Maybe they wanna make sure their size is right. We also have an embroidery workshop in all of our stores, so you get to get it embroidered with your name and your logo, but you're not gonna do that until you know whether your fit is right? All that's kinda tied together. We're seeing amazing omni-channel success as well. You come to the store, figure out your fit, figure out your size, then you love it, then you go online, that omni-channel customer is super important and super valuable, and over time will have much higher LTVs than just an online customer.
Early days, really exciting. We have a lot of learnings in terms of square footage and format and location and strategy. We're applying those learnings. We just brought on Kristy Maynes, who lululemon, Aritzia, Glossier, amazing. I think she's the most amazing retail executive in the country. We brought her onto Figs late last year. More to come on this, really exciting growth lever into the future.
Can we talk about B2B, which you call your teams business? What's the opportunity look like to work with enterprises, and how big do you see this business getting over time?
Yeah, I mean, I think healthcare institutions want to standardize and brand and outfit their teams.
We are a D2C business, and we also are agnostic. Whether you wanna buy for your team or you wanna buy for yourself, you can come to FIGS, and we can help you do that. It's part of our business. It's small today, less than 10%. That's our teams business, and we're building out that technology to make it really seamless, just as easy as buying off our site. We're building out our sales team, so you can talk to people and say, "Okay, but I want this team to wear this color, and I want this team to wear this color, and I want these styles for each person, and I want a portal that's branded with my logo and my institution." We're doing all that. More work to do. It's earlier days.
It's earlier in its life cycle. More work to do. This is a really exciting opportunity, especially as we become a global iconic brand for the next 100 years. We need to be able to serve individual doctors and nurses. We need to be able to serve larger institutions. Concierge medicine is blowing up. Healthcare is becoming more consumerized, more personalized. You have your medical records on your phone. You go around the corner to get your Botox, your blood work, your dogs checked. It's all at your fingertips now, and they all wanna be branded, and they all are turning to FIGS to partner with them to do that. One of our largest teams accounts is called VEG. It's emergency vet medicine, right? Amazing. 24-hour care. You go in, you sit with your dog. They don't take your dog back.
I don't know if you have pets. I love animals. Veterinarians love FIGS. That's just one example of how we're building out our teams business in a major way. They have 10,000 employees. They're opening up 25 new vet hospitals a year, okay? This is really exciting time. Concierge medicine is going from $15 billion to $30 billion over the next 10 years. We are never been better positioned to serve, not just this community broadly, but also the teams in B2B part of the market.
Yeah. Let's move on to financials. You reported a revenue acceleration to plus 33% in Q4. Can you unpack the KPIs that got you there, and how do we think about the durability of those drivers?
Yeah. I mean, we've been growing our active customer base. We really saw an acceleration into Q4. We have $2.9 million active customers. We grew that 9%. On top of growing customers, we're also growing our average order value. That's coming through favorable product mix shift, higher UPT, and improvement in our discounts and returns. On top of that, we also saw great growth in our orders per customer. It's not just one piece. It's coming across all three of those components. We look for the growth in 2026 to continue to be driven by that active customer growth, along with AOV growth.
Can you update us on your exposure to tariffs, perhaps your impact in 2025 and expectations for 2026, and how investors can think about your ability to mitigate those headwinds?
Sure. We source from Vietnam and Jordan, in 2025, the impact of tariffs was 120 basis points to our margin. As we go into 2026, those tariffs are still working their way into inventory, into COGS, we do expect another 280 basis points of year-over-year tariff pressure. It's 400 basis points overall. It is a pretty meaningful impact, but really happy with the work that we've done to mitigate that. Despite having that 280 basis point headwind into 2026, we're still guiding for a bottom-line expansion to our adjusted EBITDA margin. We are more than able to offset that headwind, we'll continue to monitor the environment.
Our guide right now is based off of 15%, so if that does come down to 10%, that could be opportunity for us. We also haven't baked in any expectations right now for refunds on that. That could be an opportunity for us, and we'll continue to monitor the situation.
Yeah. Let's double-click on your expectations for margins. For gross margins, I believe you're planning on modest improvement for the year, and you touched on tariffs. Can you help us understand the other puts and takes?
Yeah. Sure. Despite a 280 basis point year-over-year headwind into margin, we are actually guiding for margins to be modestly higher year-over-year. The components that help offset that, we are expecting some benefit from pricing that we've taken. We're also been successful in cost mitigations with our suppliers. We've also been working on improvements to our freight, on our inbound freight. We've been successful in that. I think those are the big pieces that will help offset that. As well, we did have a one-time reserve in 2025 that we'll be able to annualize again. Expecting modest year-over-year increase in our gross margins.
Can you also unpack operating expenses starting with marketing? You've invested heavily in marketing, including this week's start of the Never Change campaign around International Women's Month. How do you see these investments paying off both short-term and long-term?
Yeah. You know, we've been really successful in implementing both top-of-funnel marketing and investing into performance-based marketing. We've had marketing roughly at around 15% of sales, and that has fluctuated in our Olympics years, but we've had some outsized investment, and really happy with what that's done for the brand, and we'll continue to invest into that as we go into 2028, which would be another Olympics year. You know, we've been seeing improvements in some of our CAC rates and our efficiencies there, and we think over time we'll be able to continue to see leverage in that line item. Yeah, we're happy with all of the investments that we've been able to make and how that's been able to strengthen our overall brand, and connection to the brand.
Can you also touch on the ability to achieve leverage from your new DC and the other line items within SG&A?
Yeah. I mean, the point to make is this is a very leverageable business, okay? As we continue to scale revenue, we do expect operating expense to leverage. Part of that I've discussed is within marketing. We expect that to leverage over time. One of our other line items are selling costs. We've delivered quite a bit of improvement year-over-year into 2025, and there's still opportunities for us to continue to go after in terms of reductions and efficiencies within our cost per order and how we operate within our fulfillment centers. We've delivered a lot of improvements into 2025, and we'll continue to do so into 2026. You know, as we think about 2026 specifically, we do expect more year-over-year leverage on that line item.
As we think about G&A, we will continue to invest in that area. That's really to support the growth, that's to support our build-out of our Community Hubs. Again, longer term, we will be able to continue to leverage quite a bit within that line item. You know, we're continuing to invest in the business and invest behind growth and can still deliver leverage within the overall and for the longer term as well.
Yes, it sounds like there's opportunities up and down the P&L. Can you maybe wrap it all together and help us think about your expectations for EBITDA and where you have the most confidence?
The guide for 2026 is 12.7%-12.9%. That is an expansion versus the 11.8% that we've delivered this year. I've noted we've had some headwinds, and that is with additional tariffs, that is with investment into our Olympics campaign. With the efficiencies that we're delivering, we're more than able to offset that and deliver our guide that will be a meaningful expansion year-over-year. We feel like that balances both good investments into the business to not only drive the short term, but set this business up for the long term. Think that's first and foremost the importance of how we're investing for the long term into this business.
You know, as this revenue continues to scale, we will be able to deliver leverage, and you'll see some of that leverage be delivered in 2026.
Lastly, can you talk about your balance sheet and free cash flow? Just given the strength of the business, what do you see as the best uses of free cash flow?
Yeah. This is a very cash generative business. We are profitable, we kick off a lot of cash, and that has us now at $300 million of cash and short-term investments. We have no debt. Very financially advantaged business. You know, we've been first and foremost using that cash to invest in growth. We've really been putting more cash into the business in 2025 and now into 2026 again. That's first and foremost is continue to build for the longer term by investing in the opportunities and the strategies that we've laid out. We will have some capital investments this year.
Then we do have a share buyback program that we have been putting cash into and will continue to return value to shareholders through that mechanism into the future.
All right. Well, let's leave it there. Thank you so much, Trina and Sarah, and thank you all for your interest. Look forward to seeing you at the breakout.
Thanks for having us.