And in parallel, we built a global community of boutiques, brands and customers across all major luxury markets in the world. This strategy remains our North Star. And thanks to our progress on all of these fronts, today, we occupy a unique leadership position in global luxury with an extremely exciting future ahead. Underpinning the strategy, Luxury has continued to demonstrate its resiliency and has become an integral part of culture, now more than ever before, which I believe will pave the way to many more years of industry expansion. Still, the digitization of luxury is in its early innings with digital sales just over 20% of the mix, but expected to expand to over 30% by 2030. This means Farfetch as a leader at the intersection of technology and Luxury is poised for significant growth and profitability.

This reinforces our confidence in our previously stated plans to scale to a $10 billion GMV business, generating approximately $400 million in adjusted EBITDA and strong free cash flow by 2025. In spite of the unprecedented macro challenges since 2022, the decisive actions we've taken in light of these factors make me as confident as ever in our prospects for achieving these targets. The events of 2022, which led to the stoppage of our business in Russia, then our third largest market, a slowdown in China and adverse FX all amidst considerable macro volatility in U.S. and Europe, raised an imperative for decisive action. As a result, in 2022, we moved swiftly to implement a significant set of actions on costs and capital allocation, making profitability and cash generation and non-negotiable priority over growth after a 14-year stretch of rapid expansion.

This is now set as our philosophy for cost and capital allocation moving forward. These decisive actions included not only reductions in head count and other fixed costs, but also a complete redesign of our organization structure and a significant bolstering of our leadership team. And this June and July, we went even further. We doubled down and executed the most significant cost rationalization in our history as a company. Specifically, the actions taken in the past two months are expected to eliminate $150 million of planned 2023 fixed costs through the remainder of the year. This means G&A and technology expenses are now expected to be a combined $800 million for full year 2023 as compared to the previous guided $950 million. This delivers $50 million in savings versus 2022 despite incremental resources to support the launch of Reebok and new FPS launches planned for 2023 and 2024.

Just in this last round, we've removed approximately 800 roles are over 11% of starting head count in 2023. As a result of these reductions as well as other cost cuts, costs related to some of our key teams such as our marketplaces, technology, finance, legal and people teams will be back to 2020 spend levels. which means they have essentially rolled back three years of fixed cost expansion. And the cost of our operations, which provides end-to-end part of others are only expected to be 25% above 2020 levels whilst other volume is running 60% higher than three years ago. Finally, NGG and FPS costs were also rationalized. As these reductions are structural in nature, we expect even greater savings for full year 2024, which we believe increases our ability to achieve our stated 2025 profitability goals.

This also means we have made a range of business decisions, including discontinuing beauty as a category on the marketplace and exploring strategic options for Violet Grey, further reduction in our real estate footprint, closing several offices and profitable retail locations worldwide, and concentrating NGG's resources on key brands among several other actions across the Farfetch Group. I want to emphasize a very important point here. Our North Star remains absolutely intact. Amidst executing the strategy of decisive action we remain focused on delivering on all the strategic initiatives discussed in our Capital Markets Day. Our 2023 FES launches remain on track, including the continued global rollout of Ferragamo as well as Bergdorf Goodman, which is expected to launch in Q4.

I am delighted to report that we launched three additional e-concessions as-a-service brand for Harrods. And that Harrods have also proactively initiated and signed an early renewal of their SPS contract, which extends our partnership into 2028. Additionally, our announced with Richemont continues to advance through the regulatory review process. We continue to work closely with regulators to obtain the final outstanding approvals for the transaction, following approvals in the UK, China and Italy among others. As a reminder, approval is not required in the U.S. I am confident the combination of our decisive actions in terms of focus on profitability and cash generation and our unwavering commitment for our long-term vision will result in more big wins across our key strategic initiatives while driving us towards achieving our stated 2025 profitability targets.

Turning now to more recent trends. I'm pleased to report Farfetch continues to grow in Q2 with digital platform GMV up 7% and a stronger profitability profile. Total G&A and technology expense was 7% lower. And our focus on cash generation means free cash flow was positive for the quarter. I want to highlight that across most regions, our marketplace business is performing very strongly. In Q2, GMV in EMEA grew double-digits. And in the Americas, excluding the U.S., it grew more than 20%. Overall, active customer growth was 7% and other growth was 9%. Our margins remained stable with digital platform or the contribution margin of 31%, and brands and boutiques continue to double down on Farfetch with over 40% unit growth of supply. In U.S., GMV accelerated with Q2 performance sequentially better, although, still single-digit negative year-on-year together with a 10% reduction in demand generation spend.

However, as in the case of many others in the luxury industry, we have seen a less buoyant luxury customer in the U.S. We have seen similar macro dynamics in Mainland China. Although, we are seeing improvements with Q2 performance sequentially higher, GMV was also in single-digit decline. The reality is that the recovery has not been as robust as we had expected when we reported our Q1 results. And as a consequence, we have also reduced demand generation investment in this region. Like in the U.S., we believe this is not Farfetch specific as other luxury brands have similarly indicated China is not growing as quickly as previously expected after its reopening in December. Whilst brands are reporting strong in-store growth against comps during the previous years, strict lockdowns, online sales have not recovered as quickly as expected by many in the luxury industry.

The slower recovery in these two large markets, offsetting the strong momentum we continue to expect in most other regions leads us to moderate our second half 2023 growth expectations for the marketplace. Our group outlook for 2023 also factors in recent developments in NGG's business, which Stephanie will discuss. Overall, I am delighted to confirm Farfetch is growing. Our key strategic initiatives remain on track. And thanks to the decisive actions we've already taken in terms of fixed costs, we are confident about our objective to be profitable at the adjusted EBITDA level and generate positive free cash flow for full year 2023. Turning to our executive team and the evolution of our organization. Tim Stone has joined Farfetch to assume the CFO role as Elliot Jordan ends his more than eight-year tenure at the end of this month.

We're delighted to welcome Tim to Farfetch. He has 20 years’ experience at Amazon and was also CFO of Ford. Tim brings extensive knowledge of best-in-class customer-centric marketplaces and e-commerce platforms, along with experience in scaling SaaS businesses, proficiency in both 3P and 1P businesses and has a deep understanding of digital as well as physical retail. He shares my vision of building Farfetch as a leading company at the intersection of tech and luxury with a very strong profit and free cash flow generation profile for the long term. Team is moving to London this month and will be a key member of the executive team taking Farfetch to its next level. And he has big shoes to fill. Elliott leaves with the fondest of memories and will always be an important part of the Farfetch history.

Having joined Farfetch as our first CFO and partnering with me to multiply our revenue by 16 times during his tenure, transition the company from private to public and leading so many amazing teams and projects. We have significantly strengthened our organization and leadership over the last 12 months. Overall, these additions of exciting talent fill our ranks with an even wider skill set, hunger for success and huge amounts of energy as we approach a new very exciting chapter for the Farfetch Group. And now I'll turn over to Stephanie to update us on NGG.

Stephanie Phair: Thank you, Jose, and hello, everyone. Four years ago, we acquired NGG because we saw great potential behind combining its culturally relevant content creation platform with the Farfetch technology platform, and it has been a successful combination. Having recently added responsibilities of Chair of New Guards Group to my existing role as Group President, I'd like to spend some time today updating you on the business. In particular, I'll focus on our Q2 performance, the recent organizational changes and update you on the brand portfolio and our recently launched Reebok business. Starting with Q2 performance. In Q2, Brand platform GMV decreased 41% to $63 million. This decline was driven by a phasing of deliveries from Q2 as wholesale accounts, predominantly department stores and retailers in the U.S. and UK, reduced intake deliveries due to heightened inventory positions, resulting from the challenging macro environment.

The phasing of shipments was also due to some onboarding challenges with the launch of Reebok, which have resulted in a slower ramp-up. However, we expect a strong recovery of these deliveries to result in Q3 Brand platform GMV of over $150 million. For the remainder of the year, we expect wholesale to remain under pressure as we have seen retailers adjusting their open to buy for the spring/summer '24 season. This is reflected in our revised 2023 expectations for the brand platform, which Elliot will cover. It's important to note, however, that this dynamic is specific to wholesale. In NGG's digital direct-to-consumer channel, GMV grew double-digits during Q2. Moving on to NGG's organization changes. Since taking this role, following the recent transition of the NGG founders, I have been spending time with the team in Milan reviewing the business strategy and operations and have begun implementing actions to streamline NGG and allocate resources to optimize profitability.

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First, we have cemented a strong and capable leadership who have been at NGG over the past few years. We also restructured NGG to function more efficiently as an operating platform to service existing and future brands within the portfolio. This, along with our plans to further integrate NGG with the Farfetch platform has enabled us to reduce NGG's head count to 2021 levels. Going forward, we will also focus our resources and efforts on the brands with the greatest scale and profitability profile. As a result of these actions, direct G&A for full year 2023 at NGG is expected to decrease double-digit percentage as compared to our original expectations for the year. and we expect some of these savings to carry into 2024 for a stronger profitability profile.

Moving to Reebok. We are pleased to have launched this brand across direct-to-consumer and wholesale channels in May. While there have been some initial challenges in transitioning the business from Adidas, with the process fully complete, we are focused on the underlying opportunity to tap into NGG's brand building talent and expertise to reinvigorate this heritage brand. We expect the initial transitional challenges to result in Reebok now delivering approximately $200 million across both the brand and digital platforms in 2023 and remain enthusiastic about the brand's prospects which is supported by the strong consumer and partner engagement since launch. We're also excited to have launched in July, the first iteration of Reebok premium line.

This line is the prologue of the full launch of products and collaborations expected next year. Overall, we continue to see significant strength within NGG, a business that has contributed to the growth and profitability of Farfetch, delivering GMV growth at a 20% CAGR from 2018 to 2022, ahead of luxury industry growth of 7% over the same period. We believe that brands within the NGG portfolio will continue to be forces of culture in the industry and that our recent organizational changes led by a very strong management team will also allow NGG to operate more efficiently, drive profitable growth and unlock further synergies with the overall Farfetch Group. And now, I'd like to pass the call on to Elliott, who will discuss our financial results and outlook.

Elliot Jordan: Thank you, Stephanie, and hello to you all. I'd like to summarize what we have achieved across Q2 and then break out our expectations for the rest of the year. There are several key points to highlight from within the quarter. First, the digital platform is delivering growth with digital platform GMV up 7% and digital platform services revenue up 10%. In addition, digital platform order contribution margin remained strong at 31.2%, despite macroeconomic and promotional headwinds. The rationalization of the business since 2022 has delivered significant savings in the cost base, which is lower year-on-year and we'll continue to deliver financial benefit across H2, and we have achieved positive free cash flow driven from a stronger working capital position.

Overall, our use of cash has improved by $316 million versus Q2 and we finished the quarter with $454 million in cash and cash equivalents. Finally, the brand platform experienced delays in shipping wholesale orders, meaning approximately $50 million in revenue at a circa 50% gross margin has moved from Q2 to the second half of the year. This movement had an associated impact on adjusted EBITDA and inventory levels. Looking at the P&L in Q2, we achieved GMV of $1 billion, a 1% increase on a reported and constant currency basis. This growth was driven from the digital platform, which accelerated growth to 7%. Brand platform GMV declined 41% due to delayed wholesale shipments as retailers phase back deliveries of fall winter '23, whilst they clear through their spring/summer '23 inventory holdings.

This decline in GMV had an impact on revenue which declined 1% year-on-year and gross profit, which declined 9%. Demand generation experience has improved year-on-year by 6% and total G&A and technology spend improved 7% to be $14 million lower than last year and $15 million lower than Q1. We achieved adjusted EBITDA of minus $31 million which was $4 million better than Q1 due to the growth of the digital platform and sequential reduction in G&A and technology spend. The decrease in EBITDA versus last year was due to the delayed brand platform shipments, which we are now expecting to recognize an H2 revenue. Let's look more closely at the performance of the digital platform, which has seen some momentum in Q2. As I said earlier, the digital platform GMV growth accelerated to 7%.

This was driven by strong underlying growth from the marketplace and double-digit growth from Farfetch platform solutions with the addition of GMV from Reebok and Ferragamo, which took effect across Q2. The digital platform grew slower than expected, driven by the U.S. and China on the marketplace and as GMV from Reebok ramped up less quickly than anticipated. The marketplace performed well with a $0.07 increase in active consumers to $4.1 million as we added over 550,000 new consumers in the quarter, and orders per customer increased slightly to deliver 9% order growth. This growth was partially offset by a 6% decline in average order value to $562 due to a higher mark down mix year-on-year. Digital Platform Services revenue increased ahead of GMV at 10% due to an increased mix of first-party revenue and the addition of Reebok direct-to-consumer sales on the digital platform.

In addition, we saw an increase in third-party take rate by 60 basis points to 31.8%, and which we believe reflects the value we are providing partners on the platform. Digital platform order contribution margin was 31.2%, down 50 basis points principally due to a reduction in first-party gross margin due to action we are taking to reduce inventory levels, plus the increased mix of first-party revenue at lower gross margin, offset by a significant reduction in demand generation expense to 18.1% of digital platform services revenue compared to 21.1% last Q2. We continue to improve new customer unit economics with lower customer acquisition costs year-on-year, and engagement costs on existing customers have also improved year-on-year. These savings are driving a higher LTV over CAC ratio with three-month LTV over CAC improving year-on-year for each of the last three quarters.

Looking ahead, we are adjusting our near-term expectations across H2 to reflect an updated assessment of the luxury market in the U.S. and China. This means moderating our GMV growth expectations. However, our focus on operating the business off a lower cost base means we continue to expect to deliver profitability in 2023 with up to 1% adjusted EBITDA margin. GMV is now expected to be approximately $4.4 billion, up from $4 billion in 2022. On the digital platform, we are now expecting digital platform GMV to be approximately $3.85 billion, up 10% year-on-year. This assumes continued strong growth across most markets, offset by ongoing mid-single digit decline in the U.S. and China for the rest of 2023. On the brand platform, we are now guiding to GMV of approximately $450 million, broadly flat year-on-year.

This estimate reflects ongoing macro headwinds affecting wholesale orders of existing brands offset by incremental GMV from the launch of Reebok this year. We continue to expect GMV growth to improve into Q3 and then Q4 supported by underlying growth in the marketplace and additional GMV as Reebok's direct-to-consumer channel strengthen and FPS starts to service Bergdorf Goodman in Q4. The guide of GMV also reflects the expected catch-up in delayed brand platform shipments from Q2. On G&A and technology costs, we're now guiding to circa $800 million this year, which is a $150 million saving compared to the initial guidance as we continue to drive cost savings across the business. This should result in cost $50 million lower than last year, which delivers a return to operating cost leverage.

Revenue growth is expected at 8% to 10%. On margins, our forecast for digital platform order contribution margin remains higher year-on-year at 33% to 35%. This position is supported by anticipated improving gross margins and more efficiency in demand generation expense versus 2022. Inventory actions and a higher Reebok mix means gross margin on the brand platform is now expected at 46% to 48%. On cash, we expect to deliver positive free cash flow and have taken the opportunity to expand our existing term loan B facility with expected net proceeds of approximately $180 million boosting our overall liquidity. We now expect to deliver cash and cash equivalents of over $800 million at year-end. This position is driven from higher GMV growth and profitability compared to H1 and further improvements in our working capital position, particularly within Q4.

It only leaves me to thank Jose, the Board and everyone at Farfetch for all of the memorable moments and fantastic achievements we've shared over the last 8.5 years. It has been an honor to be part of a business, which I believe is positioned at the center of gravity of growth in the luxury industry over the longer term. I'm delighted to be passing the CFO back into Tim, who has the experience and leadership skills to help guide the business through its next phase of profitable growth. I wish all my talented colleagues at Farfetch, all the best. And with that, I'd like to pass the call back to Jose for his closing remarks.

Jose Neves: Thank you, Elliot. Over the past 15 years, we have built a leader at the intersection of luxury and technology, with incredible competitive advantages and huge opportunities for growth. Nonetheless, the current macro environment requires decisive action. We have shifted our paradigm of cost and capital allocation to prioritize profit and cash generation as non-negotiables, while still maintaining our North Star intact. We've redesigned our organization and strengthened our leadership team. And in the last two months, have doubled down by further rationalizing our business, all whilst delivering against our key strategic initiatives, which makes me more confident than ever in achieving our previously stated 2025 goals of scaling to a $10 billion GMV business, generating approximately $400 million in adjusted EBITDA and strong free cash flow and continuing to make progress in our mission to be the global platform for luxury.

I want to extend a huge thank you to all our Farfetch, who built the amazing company we are today and who have embraced the need for decisive action and are working relentlessly to build an incredible future for this company. Thank you, and we will now open the call for questions.

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