Confronting the Executive of Smile Direct Club [$SDC]

hey kyle welcome aboard thank you so

much for joining as the chief fighter

from smile direct how's it going what's

going well how are you doing good to be

here we good thank you so much for being

here this is so cool i we've got so many

questions for you and i hope if you

don't mind we'd love to just get kind of

get right into them yeah that sounds

great love it awesome thank you throw

you right into the line of fire so what

is your opinion why are so many folks

shorting smile direct it seems like

you're you're like 34 short right now

the stock has gotten pummeled i would

imagine much by these short sellers kind

of align these things here what's going

on what are people complaining about

tough questions from the start

and quickly

since since this is all about clean

teeth i'm going to drink through the

straw here my coffee but yeah go ahead

perfect yeah

well look i think um

you know anytime you do something uh

disruptive

as with many other disruptive businesses

out there

it takes time to understand

the business model and and the

complexity and i think if you look at

our story

uh and it's been a short one at that

with

you know incredible success over over a

very short time period but it's a

difficult business to understand and so

there's a lot of noise um certainly from

an investor perspective if you look at

what's been out there since we've gone

public and i think the important part

for us is is really continuing to focus

on

the mission that we have as a business

we're a very mission driven brand and a

company and i'm sure we'll talk we'll

talk a lot more about that and we've got

to we've got to stay focused on

executing against that plan and so

uh you know i think if we do that the

the short volume that we have on the

stock will will take care of itself in

time but a lot of that is just

associated with purely the

the noise that we have around the

business very similar to many other

disruptive brands that you see out there

in the market today

got it that makes a lot of sense so

there there was uh talk about uh you

know some folks

because i mean one of your competitors i

believe is and i imagine you do as well

is invisalign but the difference with

invisalign is that people have to go to

a dentist and correct me where i'm wrong

here they've got to go to a dentist and

they get the professional molds done or

whatever

smile direct my understanding is is

more of something that that you could do

from home this is why your company name

is smile direct because you're you're

bypassing that that normal

dentist chain which is very expensive i

mean i had invisalign i think it was

like five or six thousand dollars or

something crazy right uh and so can you

speak a little bit to uh those

differences uh and then maybe also some

some

touch on why some folks have said maybe

there's a downside to skipping that

dentistry are certain people's gums not

capable of maybe receiving

aligners and could those cause problems

yeah let me be let me be clear

there is 100 percent of dentists

involved in every single one of our

cases

the only difference is dentists are

orthodontists right the only difference

is with us

uh our members have the option to do it

100 remotely they could also start their

journey in person at a dentist office

but we

uh have come up with a tele-dentistry

platform so that you can interface with

your dentist completely remotely very

similar

you know quality of care standards of

care clinical outcomes clinical efficacy

but you can do it all through our

television platform versus having to go

in person

every couple weeks to see your ortho and

so i think i think the decision that

people are making in the marketplace

today is do i want to have that

in-person experience every couple of

weeks or do i want to use a

tele-dentistry platform if they use a

teledensity platform we are we win today

the vast majority of the time and one of

the initiatives that we're focused on

which the launch of of selling through

the dental practice

uh is actually starting to take share

from those people who actually want to

go in person and i think if you look at

you know go to our website you can you

can see directly on there the y you know

why smile direct club versus invisalign

and i think there's a lot of very

compelling points there that will help

people understand that they can get a

safe and clinically effective outcome

but do it at a price of 19.50 instead of

five to eight thousand dollars or three

times more expensive and so all of that

is is made possible by the

tele-dentistry platform that our doctors

use

the tele-dentistry are you using

tele-doc to set this up so we're not but

it's a similar platform it's our

proprietary technology that we created

and our doctors

uh you know use that portal they can

video uh interface directly with uh with

their patients or our club members

through that uh platform

got it

now uh

these the dentists who uh answered the

call so to

speak

are these uh employees or they

subcontractors how does that work

yeah so we're set up legally as what's

called a dental service organization

uh so we contract with your professional

corporations that are independently

owned by dentists or or orthodontists

and we provide a range of of uh you know

non-clinical services to those

professional corporations so they're not

employees uh under the strict

uh sort of legal standards that we have

to abide by but there's uh you know lots

of dental service organizations that are

have operated for a long time in brick

and mortar practices and we're

structured in a very similar fashion to

that it's just all done using our

tele-dentistry platform to the consumer

it's it's no different right they view

they view uh when they come to our

website and and uh

they choose if they want to go to a

dental practice or if they want to order

an impression kit or if they want to go

to our smile shop

you know they view that dentist all part

of our network and and view the entire

experience as part of smile direct club

god okay now what about the pandemic the

pandemic seems like it it hit revenue uh

a good amount you know i lost about 100

mil compared to what the 750 that she

had in the prior year

um how have things come back has it been

slow growth coming back you know

what is it taking to get people to come

back to smile direct after coveted and

you'd think that hey it's you know you

could do it online you don't have to go

to a dentist office but it seems like

maybe people care less about dental care

right now during the pandemic how has

that been hitting y'all

yeah so you know i'd say that if you

look at the pandemic when it initially

happened for us as a business i think

what it really just highlighted is the

the agility and flexibility that we have

from a business model perspective so

you know

people come to our website we've got

almost five million unique people per

month that are coming to the website

every single month and

they're choosing if they want to order

an impression kit or go to one of our

smile shops prior to covet about 90

percent of people were going into a

smile shop

you know we had to get all of those down

in the early stages of cobit and 100 of

people were going through impression

kits and so just a complete pivot

uh in the business model and as we've

come out of covet we've been able to

rebuild our smile shops in a way where

we're operating them at a much higher

utilization and so pre-kobit you know

let's say maybe the the shops were 20

utilized today they're closer to 60

utilized so the shops are much more

profitable

we've rebuilt it in a much more scalable

way as we think about the the

longer-term trajectory and we've also

built uh

partnerships with dental practices we're

in about 500 practices today and that's

rapidly growing as well so i think covet

has enabled us to you know change the

the business model from a perspective of

where consumers are going and how

they're interacting with us

uh you know from a revenue perspective

uh as you as you mentioned down about

100 million

i think if you look at it uh from a

quarterly perspective you know we really

saw the biggest impact of that this past

quarter in q2

uh of 2021 and you know if you look at

our core demographic

our core demographic and it goes back to

the mission of the business and and what

we're so passionate about

our household income on average is about

65 70 000 in household income

so we average well household income is

actually on the lower side actually

because regular individual income is is

somewhere around i feel like 59 000 in

the united states or something like that

you're saying household income okay

gotcha so lower demo household so it's a

lower demo and and that's you know what

the mission is all about it's about you

know democratizing access to care making

it affordable to everyone making it

convenient for everyone but that

demographic in particular in q2 from a

macro perspective is hurting right a lot

of uh

you know a lot of the stimulus packages

have have worn off if you look at the

impact of inflation in particular it's

hurting our demographic so we don't

believe there's any sort of long-term

fundamental changes to the prospects of

the business as a result of that but

certainly some some near-term headwinds

if you look at q2 in particular as a

result of some of those macro factors

and that's why you're moving upstream to

someone who can afford to pay five to

eight thousand dollars but they realize

you know why would i pay that three

times markup when i can get you know

safe and clinically effective outcome

that smile direct club is going to

guarantee for life you know why would i

do that when i could pay 19.50 and so

that's why diversifying our demographics

is so important long term

now what about uh i'm just looking here

it seems like you've got um

long-term debt as of the last filing

here of somewhere around 733 mil

lisa's only about 26 million of that

where's all this debt from and and how

does the debt affect your

you know the potential for having to

raise capital looks like what last

quarter you had about 376 million in

cash receivables about 214. do you have

any trouble getting people paying uh for

your receivables or any any issues with

the with the liabilities you have

no so if you look at the as you point

out between cash and the receivables

that we have you know well over 500

million of of liquidity and we think

that certainly gives us

uh you know enough liquidity on the

balance sheet to get us to cash flow

profitability and you know the debt that

we raised we did a convertible offering

uh in uh

march of of this past year

uh and that offering

uh you know comes due in in five years

uh it was a great deal uh where where

the uh current shareholders took on

minimal dilution right so we put in a

a clause in there where our shareholders

don't take on dilution uh until the

stock was up a hundred percent so into

the high 20s before the the existing

shareholders would take on dilution

there so because that was done around

ten dollars or so

yeah we struck it uh it was actually

slightly higher than that but we put a

cap wall where is up 100 before there

was any dilution so it's a really low

uh cost of capital the all-in cost of

that debt is about two percent a year

uh zero percent cash coupon bonds so

very efficient cost of capital for us to

grow the business and

uh you know certainly finance is the

cash burden that we have over the next

several years if you look at the burn

that we have all of that is associated

with just the sheer growth initiatives

and opportunities that we have as a

business so

you know we're in

what we believe to be the the very early

stages of a massive market opportunity

you know we think there's 500 million

people globally that have some type of

crowding or spacing issues within their

teeth and can also afford to pay for

treatment as well

less than one percent of those are

treated annually so we're investing

heavily with a brand

to be able to to capture market share

there long term we're also yeah it looks

like you spent like three times as much

money on marketing

this last quarter than you did in 2020

is that where most of the money is going

to or like how do your manufacturing

costs scale it actually looks like your

cost of revenues went down despite your

revenue going up uh substantially from

2020 to 2021 at least on the three

months ended in june

yeah so we've automated a significant

portion of manufacturing you know if you

look at our our long-term target for our

gross margins

uh we've got an 85 gross margin target

out there

a lot of that has to do with the

automation that we've built around

manufacturing and we're pretty close to

to achieving that target today

so gross margin you know we at to to

your point we've we've come a long way

there in a very short period of time

yeah so how do you do that i mean is it

i mean because you're manufacturing a

product uh so yeah it looks like right

now you're somewhere around

uh you know 79

but how do you

how do you go from

uh

well let me rephrase my question

my understanding is you sell products

but you also have the service uh is is

the product just very high margin then i

mean i imagine it must be i mean because

they're molded uh like essentially

plastic it can't be that expensive to

actually make the individual product

it's more the marketing and acquiring

the customer and getting it to the

customer or maybe the the service of of

uh providing the teledoc experience

right well i shouldn't say

telehealth experience that's right and

look that's what we found so fascinating

about this industry right the car the

plastic in

perspective of the cost of the total

system is very very small so

you know an invisalign would sell the

the aligners for maybe 1250 to the

dentist or the ortho they mark that up

three times

and sell that back to the consumer and

so that's where we saw the opportunity

for us to come in with a product that is

you know from a clinical standpoint safe

and efficacious but cost three times

less than 1950. so there's the cost of

the product itself and then there's

everything that wraps around that so

we're investing heavily in the brand

today one one and two consumers uh if

you were walking down the street and

asked them if they're familiar with

smile direct club would say yes so our

aided awareness today is very very high

and we're building a brand there to

support long-term growth

uh but it's also the growth initiatives

that we have as well we're investing

heavily into

uh you know innovation research and

development to continue to disrupt

themselves on the product side we're

investing heavily in international

expansion we just announced france

that's our 14th international market in

just over two years

that we've expanded into

uh and so there's a lot of areas across

the business that we continue to invest

in which is where you see the the the

cash burden that we have quarter to

quarter coming in it's really to

position us for the longer term growth

that we see just given the massive

market out there

that makes sense how uh i mean so

you mentioned earlier inflation

where are you seeing inflation i mean

the cost of plastic going up can't be

that much of a burden to y'all uh is it

are like ads getting more expensive or

the people more expensive uh the people

that you're doing the telehealth with uh

what's going on

yeah that that's more uh of a direct

impact on our core demographic

so i say open porter if you look at

revenues uh you know being off of where

we expected them to be

a core part of that was just the impact

that we saw on our core customer so

non-discretionary items so the cost of

gas as an example was up significantly

if you take a household that's making 65

70 000

and inflation's up six or seven percent

year over year you know that's several

thousand dollars that has a big impact

in that household which would equate to

the cost of a liner so it was a a

near-term impact inflation was one

example that we saw on the cost of or

the impact to our core demographic there

again i think all that's transitory i

don't think there's anything out there

if you look at the

long-term potential of where we go

we don't think there's anything

there from a long-term perspective that

impacts the growth

i remember and it might be slightly off

on exactly the statistic but i remember

reading something from the federal

reserve that forty percent of those

making less than forty thousand dollars

which would probably be within your

demographic uh

forty percent of people making less than

forty thousand dollars are uh in either

retail or hospitality or some form of uh

service industry affected by the

pandemic uh and a lot of these folks are

still unemployed even though companies

are rehiring some of them have lost

their skill set uh they haven't gotten

vaccinated

the

more people in this demographic are

unlike uh or unlikely to get vaccinated

right so uh it almost seems like it's

gonna take longer and it's gonna be

harder for this potential demographic to

get back uh to profitability so to speak

uh and potentially being a customer

uh what what can you do to

scale up i mean is there is there a

reason maybe the demographic is lower

what's what's stopping people who use

invisalign from from using your product

yeah that's it's a great question and

it's all part of the you know the

strategy that we you know we positioned

ourselves for so i think i think you

know we've recently launched what we

call the challenger campaign right and

so what that is is it's starting to go

directly head-to-head against invisalign

and it's to help people understand as i

said before

why would i pay three times more when i

can get a safe and effective outcome uh

you know using smile direct club in

their tele-dentistry platform and

the goal over time is for people to

truly understand that messaging and so

that's exactly right over time we've got

to continue to move and expand our our

demographics to be able to take share

from people who you know could afford to

pay five to eight thousand dollars but

choose not to because you know our

platform is more accessible for them

it's more convenient they can do it all

remotely

uh and it's much more affordable as well

so you're giving them the value for the

product so that's all part of the longer

term strategy that we have that takes

share

uh within the broader orthodontic

category

and i was thinking about that too how

maybe this is more of a technical thing

but

how does a tele-dentist

evaluate my gums uh for example like do

i mirror it like how does that work

yeah so um

you know they have if you go through the

process if you order an impression kit

or if you go into one of our small shops

or if you go to one of our our dental

practice partners

uh you know they're doing an initial

assessment and review based on oral

pictures so you take a variety of

pictures where they can see

the structure of the gums they can see

your teeth and the position of them

uh so it's not zoom they're actual

pictures that's good okay that's good

they're actual pictures and then if they

need more information uh you know so a

dentist who

effectively the process would be and

let's say you ordered an impression kit

right so you'd order a kit to your home

uh you would do the mold directly in

your home and it creates a a mold of

your teeth and you would take the

pictures you would send those in to us

that effectively creates a digital image

file no different than if you went into

a dentist practice they're going to do a

scan of your mouth and that creates a

digital image file from that

we map out how your teeth are going to

move throughout treatment all that

information is going to your state

licensed dentist or orthodontist there's

a quality check we have a clinical team

over 100 dentists

inside that are employed by sdc where we

do a quality review prior to it going to

your state licensed ortho or dentist for

them to review but they're looking at

all that information they're looking at

your medical and dental history they're

looking at the oral pictures they're

looking at the

the scan itself or the impression and

the treatment plan and so based on all

of that they can push it back to our

team and say i want to make these

changes to the treatment plan and move

these teeth in a different way they can

approve the plan and say yeah this looks

great

they could deny the plan and say you're

not a good fit for orthodontics for a

variety of different reasons or they

could push it back to the patient and

say you need to go for clearance and so

clearance would be you know i need an

x-ray or i need you to go for a perio

test they see something in the gums they

didn't like and so with the pictures

that we get and load into our television

platform there's so much the doctor can

can do with that and so today we can

treat about 90 of the cases that are

coming to us

from you know just from the information

that we're

uh you know we're gathering and if

needed that the clinical team the

dentist can get on the phone as well

throughout treatment

with the patient actually go through the

video chat and understand how the

aligners are fitting triage any problems

bring them back in if needed as well so

the the clinical outcomes clinical

efficacy is no different than if you're

going to go into uh you know

brick-and-mortar practice and

you know that's been a critical message

for us to get out there for people to

understand you're going to get a safe

and effective outcome uh and and you

know we we actually guarantee that for

life now we'll guarantee the outcome of

your smile

as long as you're compliant with

treatment you wear your retainers

uh you know what will guarantee that the

outcome that we're providing people

what what's it been like trying to

partner with uh with actual dentists uh

who have their practices i don't i

shouldn't say actual dentist to say that

your dentists aren't actual i mean like

for existing practices right who may

already have invisalign uh units or

whatever what what's that like how do

you bridge that gap

yeah look i mean

we're if they want to provide invisalign

at the same time we're not against that

by any means you know i think

you know if you look at orthodontic care

historically as i said before less than

one percent of the market is treated

annually there's such a massive

opportunity out there

and the gp market that you know when i

say gps meaning general practitioner

dentists you know in particular

only about a third of all dentists

prescribe any sort of aligners today at

all and so it's pretty low volume in the

big picture of

the entire dental population

and the ones that do are very low volume

so you know you're going to have some

that are

high volume providers you could have

some that almost do not but on average

they're only doing three or four cases

every single quarter oh wow for

invisalign that's it exactly so it's a

very small percentage in terms of

revenue for their practice so what they

love about our offering

is that we're bringing incremental

revenue into their practice

it's highly profitable for them because

there's very little chair time involved

in our model which is so important in a

dental practice it's all about chair

time and then we also bring the added

value of our leads as well so we'll go

into a partner practice and we'll host a

pop-up event and so what that means is

you know we'll bring

a hundred patients over the course of a

weekend into their practice

that are interested in smile direct club

and they'll have the opportunity to

convert those members into

dental patients and so we we put out an

example with one of our biggest partners

uh smile brands last quarter parties

we've already scheduled a thousand

uh referrals be it through hygienes or

other types of appointments since we've

launched in a pretty short period of

time the lifetime value of that for them

is three to five million dollars and so

there's there's a massive opportunity

from from partnerships and leads that

we're pushing into these dental

practices as well which is another thing

that they're excited about so

it's been very well received you know i

think there's an evolution there where

we've got to continue to help dentists

understand that clinically our product

is no different than other products on

the market today

uh and and uh you know continuing to

deliver that message to help them

understand our value proposition and the

impact we can have on their practice

that's interesting yeah to change that

is it is it like the the name or

something or or what what has created

that impression i mean have you you know

if if this was like

i don't know

if the name was different would that

make a difference or is it just a matter

of you're building the company and i'm

not i'm not banging on the name i'm just

wondering like why why is that

impression there is it because it's

online and just the price is lower maybe

yeah i think it's uh look it's

disruptive right take the industry

that's been disruptive the status quo

was going to push back on that right so

uh it's it's viewed as competitive to uh

you know the the the bottom line of of

orthodontists and and clearly they view

that as competitive and so the dental

oh i see okay okay so

sorry to interrupt but

what you're saying is if if you sell

invisalign in your office

you know they're selling you the kit for

1500 bucks you're selling it for five

six thousand dollars the dentist is like

hey sweet this is 35 4 or 5 000 bucks a

profit here

uh you know what's what's the profit

with with the smile direct is it is it

then potentially i mean you said it's

1900 what would their profit potentially

be i mean

yeah it's a it's a fraction of that so

our price is our price is the same you

know it's 19.50 it doesn't matter if you

order an impression kit or go to a

dental practice and so

that's all about the you know what i

said at the start it's about the mission

democratizing access making it

affordable to everyone and so

a lot of that noise that's out there to

your point is because of that sort of

confrontation and what's seen as

competition i think the reality is

you completely understand that as an

orthodontist as a dentist we've been

very good for the industry right we've

we've you know risen awareness over all

of the category uh we've spent a lot of

money on marketing which has has

continued to drive more patients into

dental practices we've got great

partnerships with dental practices so

that's a perception that we're changing

over time it's not going to happen

overnight but i think we're making good

good progress there we've got a really

strong clinical advisory board as well

uh that's helping us make sure we get

that message out there properly and

help dennis understand that we can be a

great partner for the practice

that makes sense what um what about

these

and i know there's a limit to what can

be said here but so i'm going to phrase

this

uh i think appropriately

do do investors need to be worried about

these lawsuits

yeah i think there's you know sort of

another uh you know misperception right

that's out there yeah if you look at the

lawsuits we're generally the plaintiff

uh right and so yeah uh we're not the

ones and there are some where we're not

but we're generally the plaintiff in the

suits and so i think when you look at uh

what's out there on the legal side and

there's not too much i can say given um

you know we're in litigation on a

variety of them but

you know we think we're in a very good

position across all of them

the important part is you know we're not

going to let someone

harm our brand which at the end of the

day is going to go against the mission

of what we're trying to do

which is as i said about democratizing

access to care making it affordable for

everyone convenient for everyone and so

if someone is is trying to damage the

brand we've got to take exception to

that i think that's what a lot of these

suits that you've seen have been about

if you look at it from a regulatory

perspective we're in a great spot you

know we've we've won in almost 30 states

since the 2020 legislative sessions the

broad acceptance of telehealth and

tele-dentistry is something that was

already underway pre-covered it

certainly accelerated post cobit and we

think we're in a very good position

there

uh we've had some some good uh wins on

the legal side as well if you look at

the history of the business and where

we've you know where we've won that's

had a big impact on the business and

uh you know we think we're in a very

good position with the cases that are

out there today as well

any buybacks planned

yeah so

you know it's always something we're

thinking about right i mean what's the

best use of our capital uh you know i

think for us as we look at the cash that

we have on the balance sheet

and just the sheer growth opportunity

that we have the best use of our cash at

least for right now is to continue to

invest in the growth initiatives that we

we have out there so you know

partnerships with dental practices

international expansion the teen market

continuing to get our brand awareness

out there

uh help people understand that you know

the clinical safety like we've talked

about so

uh we we think that's the the highest

and best use of our cash right now but

it's always something that we're looking

at you know does it buy back uh you know

make sense is that a better use of cash

and obviously acquisitions as well we're

always looking at you know technologies

that we can bolt onto the platform that

will continue to disrupt what we've

built here over time

got it makes sense

so uh gosh what what else haven't i

asked i mean that's been pretty thorough

it answered a lot of the questions that

i have uh what what am i missing i mean

i know you also uh

because

i don't own any of your stock uh but i i

do have uh two toothbrushes and two

tooth

washing things so so thank you for that

what do you think uh

i you know is it that can't be a big

part of uh of of revenue though is it

how how does that fit in is that sort of

part of the kit that you buy

yeah it's really um so if you look at

all the ancillary products uh it's about

10 of revenue today that includes

uh you know all of those products are

really about two things so one

the biggest client there is walmart so

walmart does close to 40 of all oral

care sales around the country go through

our walmart today

you know we're in uh 4 000 plus doors

around the country in walmart's and so

from a

brand awareness perspective it's great

you know great lead gen capability for

us and so

uh it's introducing someone to the brand

it doesn't take a big conversion

downstream of people who go from you

know buying a toothbrush to buying

aligners for that to have a very

material impact in our p l so there's a

brand building lead gen aspect on the

front end of that but then on the back

end as well as someone has finished

treatment

the ability to have recurring revenue

there and own the bathroom through

toothbrushes and paste and other oral

care products gives us a recurring

revenue stream increases the lifetime

value of you know of those club members

so it really does both of those lead gen

on the front end recurring revenue on

the back end and sort of wraps around

the

uh the the core aligner uh business

that makes sense okay got it uh what

what else uh what else do you think i'm

missing here uh it seems to me like

my understanding is your biggest

challenge is really convincing dentists

that they can do more business more

efficiently working with you all and

therefore make more money uh by selling

the aligners and creating that sort of

relationship uh it does sound like a

hard uh

hard sell so i i wonder what percentage

may be of your revenues come from

dentists with individual practices

versus people going through your website

yeah the dental side is very very small

today so that's a new that's a new

growth initiative that we've only

launched you know if you go back to last

fall

we were still in a pilot we only

launched you know call it this time last

year a little bit later

out of pilot mode with our first

practice so it's a newer growth

initiative we've grown that to about 500

practices over the past year

uh we've got close to 2000 total in our

network and so you know it is it is

growing rapidly but it's a smaller

portion of the business today you know

we think important for for longer term

growth but something that we're in the

early stages of building got it got it

so most mostly online that so then

what's your most effective sort of uh

advertising is it just

you know search engine uh

you know ads uh or or what do you like

doing

yeah i would say all the above so you

know our strategy broadly is about

driving people to the website so if you

think about how they how they get there

uh about 20 percent of the business

today comes through referral and so

pretty meaningful portion is referral

driven

a large portion is organically we've got

over 50 percent aided awareness so if

you were walking down the street you

know one in two people are familiar with

the smile direct club brand and so

organically are are coming to us when

they're thinking about straightening

their teeth and the third part of that

is marketing but we're driving all of

those to the website empowering them to

order an impression kit book at a dental

practice or go to a smile shop

and on the marketing side it's pretty

broad we're about 60 percent of our

spend is online we've got about 40 of

our spend is a combination of offline so

tv out of home things like that and

online it's it's all the platforms that

you would think so google's a big part

of that facebook and instagram are big

parts of that but it truly is a

multi-touch approach where we'll touch a

consumer across multiple platforms

you know if you think about the

uh the journey that someone has been on

you know having crooked teeth has been a

lifelong problem for most people

and so 90 of people have crooked teeth

could never afford to to straighten and

something has happened to say now is the

right time it could be a new job or a

wedding or a divorce or a birthday

whatever it is but there's a an event

that drives them to say you know now is

the time for me to do it and so for us

it's really about

generating the lead and then cultivating

that lead over a long period of time to

get them to ultimately convert to buying

a liner so it's a pretty

complex you know marketing strategy we

do almost everything internally we've

got about 100 team members on our

marketing team

uh and and do you know pretty much all

of our creative and marketing in-house

today

what's the uh time frame if somebody

wanted to you know start the process i'm

sure this is on your website but i'm

just going to ask you

yeah so on average uh the treatment

length is four to six months on average

and so there's not a definitive line

within there but that's an average

treatment of about four to six months

uh that someone would go through

okay and i think probably the last

question i have is what what do you all

project in terms of uh path to

profitability i think bloomberg

uh has you all uh as an estimate here of

uh these are analyst expectations

somewhere around

2024 maybe maybe profitable right 25

somewhere in there so for us i i think

the important metric for us is really

adjusted ebitda so we're a growth

business we've spent so much in in capex

and other growth initiatives that you'll

see that depreciation and amortization

you know hitting you know more so than

other businesses so

right when you think about it for us as

adjusted ebitda the only real adjustment

to that is stock comp so there's not a

there's not a whole lot of things that

flow through there

uh as you might see in in um

uh you know other private equity type

businesses as an example but from an

ebitda perspective we've actually been

profitable for a while we weren't this

past quarter with the down quarter that

we had but we've turned profitable in q3

of last year and uh obviously very

focused on on getting back to that even

a profitability but that's that's the

main metric that we're focused on if you

look at the long-term metrics that we're

going after there

top line is 20 to 30 percent annualized

growth is what we're focused on

achieving uh and adjusted ebitda margins

off of that would be about 25 to 30

percent

nice nice yeah okay yeah that that uh it

seems pretty consistent at least uh with

with uh bloomberg they're they're

they're conglomeration of all the

analysts they seem to put you between

that yeah that 20 to 30 over the next

few years of growth so that's exciting

uh and then that makes sense on uh

focusing on the ebook which then they're

suggesting getting back to ebitda

profitability by 23.

uh

you think you can make it happen in 2022

[Laughter]

look we're uh we're not giving forward

guidance um you know right now but what

i will say is the long-term targets that

we put out there

uh is what we're focused on executing

sort of year in year out if you look at

the next five years the goal is to ramp

to that 25 30 by the end of that time

period that makes sense that's awesome

man okay any what else did i miss

anything i mean this this was really

unsafe i really appreciate you coming on

i think it's worth just a quick

disclosure i'm not paid by you all and i

don't only see your shares yet who knows

maybe we'll buy some shares uh but i

always i like to put that out there

otherwise you get the troll comments

people like how much did you get paid

for the interview right i got two

toothbrushes and two tooth cleaning

things that's it okay

we'll get the feedback on the brush we'd

love to have it um

all right all right i think in terms of

you know things we missed i don't think

so i think we covered it i think that

just to kind of recap for us i mean

you know our belief is we're in the very

kind of early stages of what we think is

just a massive market opportunity out

there yeah

as a company very mission driven

you know it's all about democratizing

access to care like i said we're

disrupting a category

that

for a very long period of time has

provided a 3x markup associated with

care we're removing that consumers

making it affordable to everyone making

it convenient for everyone

uh and on top of that guaranteeing you

know guaranteeing that outcome for life

so

uh you know just remain incredibly

excited and optimistic about where we

think this this brand can go over time

and

uh you know doing it by by at the same

time solving a very important problem

for people which is which is fun

yeah no i love that i think that's great

yeah i think uh probably what one thing

if folks are really excited about

investing in uh new opportunities one of

the best things i always suggest is just

try the product

yeah so uh you know that i might have to

sign myself up for a four to six month

there and uh uh you know i think

when you're a user of the product it all

makes so much more sense yeah absolutely

yeah we'd love that we love feedback too

so you know if you do go through

treatment definitely send in feedback

and we for our investors as well we do

have a stock perks program where they

can get discounts and other things like

that too which uh which is a nice perk

oh that's interesting okay awesome

awesome well hey thank you so much this

was a pleasure anything else you want to

add any shout out you want to throw in

there but otherwise i'm done thank you

so much i'm gonna go make myself another

cup of coffee

all right perfect well thank you so much

smile direct cfo here thank you again

and uh folks i'm gonna end the live

stream i will post this video separately

so it's a standalone smile direct as

well later today so thank you everyone

for being here thank you again and uh

shout out to smile direct thanks again

everyone