Mark Altschwager: Thank you. And then a follow-up on Freestyle, does it make sense that the heavily promotional backdrop would impact engagement there? What are you doing or what can you do to kind of manage your competitive position in such a dynamic price environment?
Elizabeth Spaulding: Yes. It’s a great question. I mean I think we’re very focused on, first of all, just continuing to invest in our biggest differentiators, things like outfitting, things like focusing on new arrivals that are most relevant to each of our clients. Part of what we’re hearing from consumers is making more value out of the wardrobe that they already have. And we know that our output-based feed showing new arrivals in the context of outfits is highly converting. One example recently is, we do a new outputs e-mail every week. We added dynamic content that’s one-to-one for each consumer that shows them how to wear items through our new arrivals that bespoke to each client, and we saw a 30% increase in conversion rate on those e-mails.
So part of our strategy, I think, is just being more relevant and differentiated on the things that make us special and relevant week to week and moment. I think the other is we never really had any sort of limited time offer, clearance valves, pre-free style. So over the course of this year, we have been experimenting with episodic events that we feel like meet the moment within the promotional calendar, roughly, I would say, around once a quarter. But our goal is not to become a promotional retailer, but to really deliver value on these differentiators of discovery fit human relationship and really focus there first and foremost, while also recognizing Freestyle creates an opportunity to map more fully to the retail calendar and be relevant with what consumers are seeing.
Mark Altschwager: Thank you. Happy holidays.
Elizabeth Spaulding: Thanks, Mark.
Operator: Thank you. And our next question comes from the line of Edward Yruma with Piper Sandler.
Edward Yruma: Hey, good evening, guys. Thanks for taking the question. I guess, first, it’s a bigger picture question and making sure we’re framing this correctly. Are you effectively saying that until the environment becomes less promotional that you’re going to kind of trade off net adds or profitability? And are we fair to assume that until that changes that net adds will remain negative, and then as a follow-up, as you think about the promotional environment staying particularly prolonged, I know that you’re obviously not in the percent off game or coupon game, but are there other ways you can drive a stronger price value relationship if that’s what the consumer ends up pivoting towards? Thank you.
Elizabeth Spaulding: Yes. Thank you, Ed. On the first point, in terms of where we’re focused, I think both Dan and I emphasize that, that first and foremost, this return to free cash flow positivity and EBITDA profitability is our main focus. So we are very much emphasizing that. And I would say, given the current macro environment and then this deliberate and intentional decision to pull back on marketing spend for the focus of being very near-term ROI positive. We’re not predicting a return to inflecting that sequential net active client base this year. That said, all of the things that we’re working on that I talked about in the background, both the client experience to improve retention. Adapting our focus on marketing to do more with the clients that already know us we believe really sets us up for healthy client growth in the future, particularly as the economy improves.
So I would say we’re very focused on profitability together with the most critical places of our customer experience. And then on the promo environment, we have always had our buy five discount within the fixed offering, which we know delivers value to clients. We have our Style Pass offering for customers that have kept over 10 items where we offer them essentially unlimited fixes. Those are places that we see as a jumping off point. for the expansion of our loyalty program over time. Nothing to announce there yet, but that is on our road map to deliver value to our customers really across what we now know is such a compelling ecosystem between fix and Freestyle and to some extent, an untapped opportunity to really bring all of those elements together in a more systematic program.
So we definitely see something there down the road, nothing specific to announce just yet in terms of timing.
Edward Yruma: Thank you.
Operator: Thank you. And our next question comes from the line of David Bellinger with MKM Partners.
David Bellinger: Hey, thanks for taking my questions. So first one on the revenue guidance for the year. So Q1 fell within your range, albeit towards the lower end, so did you see trends slow materially towards the end of Q1 and so far in Q2 have you subsequently adjusted each quarter of the year down further since then? Just how should we think about the change in the pace of which it took shape in terms of the revenue guidance for the year?
