Part I - Financial Information This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for 1stDibs.com, Inc., including the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | September 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents | $32,442 | $153,209 | | Short-term investments | $110,552 | — | | Total current assets | $150,716 | $162,463 | | Total assets | $182,776 | $195,796 | | Total current liabilities | $26,961 | $26,050 | | Total liabilities | $46,463 | $47,774 | | Total stockholders' equity | $136,313 | $148,022 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net revenue | $20,663 | $22,729 | $63,762 | $73,892 | | Gross profit | $15,153 | $15,451 | $44,618 | $50,984 | | Loss from operations | $(5,233) | $(9,898) | $(25,851) | $(17,249) | | Total other income, net | $1,928 | $870 | $6,093 | $1,572 | | Net loss | $(3,305) | $(9,028) | $(19,758) | $(15,677) | | Net loss per share | $(0.08) | $(0.23) | $(0.50) | $(0.41) | [Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Reports net loss and other comprehensive income/loss, reflecting total changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(3,305) | $(9,028) | $(19,758) | $(15,677) | | Other comprehensive loss: | | Foreign currency translation adjustment | $(34) | $(103) | $9 | $(272) | | Unrealized losses on short-term investments | $(12) | — | $(132) | — | | Comprehensive loss | $(3,351) | $(9,131) | $(19,881) | $(15,949) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric (in thousands) | Balance as of Dec 31, 2022 | Issuance of common stock for exercise of stock options | Vested restricted stock units converted to common shares | Stock-based compensation | Repurchase of common stock | Other comprehensive loss | Net loss | Balance as of Sep 30, 2023 | | :-------------------- | :------------------------- | :----------------------------------------------------- | :------------------------------------------------------- | :----------------------- | :------------------------- | :----------------------- | :------- | :------------------------- | | Common Stock (Shares) | 39,260,193 | 19,978 | 1,106,204 | — | (334,959) | — | — | 40,051,416 | | Common Stock (Amount) | $393 | — | $10 | — | — | — | — | $403 | | Additional Paid-In Capital | $439,005 | $78 | $(10) | $9,471 | — | — | — | $448,544 | | Accumulated Deficit | $(291,020) | — | — | — | — | — | $(19,758) | $(310,778) | | Accumulated Other Comprehensive Loss | $(356) | — | — | — | — | $(123) | — | $(479) | | Treasury Stock | — | — | — | — | $(1,377) | — | — | $(1,377) | | Total Stockholders' Equity | $148,022 | $78 | — | $9,471 | $(1,377) | $(123) | $(19,758) | $136,313 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(11,475) | $(22,410) | | Net cash (used in) provided by investing activities | $(109,600) | $12,821 | | Net cash (used in) provided by financing activities | $(1,234) | $1,548 | | Effect of exchange rate changes on cash, cash equivalents, and restricted cash | $44 | $(689) | | Net decrease in cash, cash equivalents, and restricted cash | $(122,265) | $(8,730) | | Cash, cash equivalents, and restricted cash at end of the period | $35,778 | $162,829 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide essential context and detail for the condensed consolidated financial statements, covering the company's business description, accounting policies, significant financial events like restructuring charges and the sale of Design Manager, and detailed breakdowns of various balance sheet and income statement accounts, including equity, investments, and commitments [1. Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=1.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Describes the company's business, financial statement basis, and key accounting policies, including recent changes and events - 1stDibs.com, Inc. operates as a **leading online marketplace for luxury design products**, connecting design lovers with sellers of vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion[28](index=28&type=chunk) - The company incurred approximately **$2.0 million in non-recurring restructuring charges** during the nine months ended September 30, 2023, primarily due to a **20% reduction in its global workforce**[34](index=34&type=chunk) Restructuring Charges Rollforward (in thousands) | (in thousands) | Restructuring Charges | | :------------- | :-------------------- | | Balance, December 31, 2022 | $— | | Restructuring charges | $2,004 | | Cash payments | $1,374 | | Balance, September 30, 2023 | $630 | - In August 2023, the Board authorized a Stock Repurchase Program of up to **$20.0 million**; by September 30, 2023, **$1.4 million** had been used to repurchase **334,959 shares**[45](index=45&type=chunk)[75](index=75&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) effective January 1, 2023, with **no material impact** on its financial statements[48](index=48&type=chunk) [2. Fair Value of Financial Instruments](index=15&type=section&id=2.%20Fair%20Value%20of%20Financial%20Instruments) Details fair value measurements of financial instruments, categorized by valuation input levels Fair Value of Financial Instruments as of September 30, 2023 (in thousands) | (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :------------- | :------ | :------ | :------ | :---- | | Cash equivalents: | | Money market fund | $6,875 | — | — | $6,875 | | U.S. Treasury securities | — | $995 | — | $995 | | Total cash equivalents | $6,875 | $995 | — | $7,870 | | Short-term investments: | | Commercial paper | — | $15,572 | — | $15,572 | | Corporate notes | — | $7,122 | — | $7,122 | | U.S. Treasury securities | — | $22,757 | — | $22,757 | | U.S. Government agency securities | — | $65,101 | — | $65,101 | | Total short-term investments | — | $110,552 | — | $110,552 | [3. Revenue Recognition](index=15&type=section&id=3.%20Revenue%20Recognition) Explains the company's policies for recognizing revenue from various service types Net Revenue by Service Type (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Seller marketplace services | $20,467 | $22,504 | $63,239 | $71,597 | | Other services | $196 | $225 | $523 | $2,295 | | Total net revenue | $20,663 | $22,729 | $63,762 | $73,892 | - Seller marketplace services, primarily marketplace transactions, subscriptions, and listing fees, constitute the **majority of net revenue**. Other services include advertising revenue and, prior to its sale in June 2022, software services revenue from Design Manager[54](index=54&type=chunk) [4. Short-Term Investments](index=16&type=section&id=4.%20Short-Term%20Investments) Provides a breakdown of the company's short-term investment portfolio, including cost, gains/losses, and fair value Short-Term Investments as of September 30, 2023 (in thousands) | (in thousands) | Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | | :------------- | :------------- | :-------------- | :-------------- | :--------- | | Commercial paper | $15,589 | — | $(17) | $15,572 | | Corporate notes | $7,134 | — | $(12) | $7,122 | | U.S. Treasury securities | $22,786 | — | $(29) | $22,757 | | U.S. Government agency securities | $65,175 | $10 | $(84) | $65,101 | | Total short-term investments | $110,684 | $10 | $(142) | $110,552 | - As of September 30, 2023, the company held **$110.55 million in short-term investments**, with **$99.00 million maturing in one year or less** and **$11.55 million maturing in greater than one year**[56](index=56&type=chunk) [5. Property and Equipment, net](index=16&type=section&id=5.%20Property%20and%20Equipment%2C%20net) Details the company's property and equipment, including internal-use software, leasehold improvements, and depreciation Property and Equipment, net (in thousands) | (in thousands) | September 30, 2023 | December 31, 2022 | | :------------- | :----------------- | :---------------- | | Internal-use software | $19,047 | $18,418 | | Leasehold improvements | $3,605 | $3,594 | | Furniture and fixtures | $1,131 | $1,114 | | Computer equipment and software | $898 | $851 | | Software in progress | $520 | $562 | | Total property and equipment, gross | $25,201 | $24,539 | | Less: Accumulated depreciation and amortization | $(21,918) | $(20,854) | | Total property and equipment, net | $3,283 | $3,685 | - Depreciation and amortization expense for property and equipment was **$0.4 million** for the three months and **$1.8 million** for the nine months ended September 30, 2023. This included **$0.5 million of accelerated amortization** for internal-use software due to discontinuing support for the NFT platform[57](index=57&type=chunk) [6. Accrued Expenses](index=17&type=section&id=6.%20Accrued%20Expenses) Provides a breakdown of various accrued liabilities, including shipping, salaries, taxes, and restructuring charges Accrued Expenses (in thousands) | (in thousands) | September 30, 2023 | December 31, 2022 | | :------------- | :----------------- | :---------------- | | Shipping | $3,213 | $3,597 | | Salaries & benefits | $3,267 | $1,862 | | Sales & use taxes payable | $1,159 | $1,378 | | Allowance for transaction losses | $1,200 | $1,327 | | Restructuring charges | $630 | — | | Payment processor fees | $525 | $970 | | Allowance for e-commerce returns | $392 | $438 | | Other | $937 | $1,189 | | Total accrued expenses | $11,323 | $10,761 | [7. Leases](index=17&type=section&id=7.%20Leases) Outlines the company's operating lease assets and liabilities, including headquarters and a new sublease agreement - As of September 30, 2023, the company had **$20.1 million in operating lease right-of-use assets** and **$22.4 million in total operating lease liabilities**, primarily for its New York City headquarters, with a weighted-average remaining lease term of **6.25 years**[63](index=63&type=chunk)[69](index=69&type=chunk) - In August 2023, the company entered into a sublease agreement for approximately **78% of its NYC office space**, expanding to **100% by January 15, 2024**, and ending December 31, 2029. Sublease income will commence in April 2024[65](index=65&type=chunk) - Subsequent to the balance sheet date, in November 2023, the company entered a new lease agreement for **13,671 square feet** for a new corporate headquarters in New York City, with a **five-year term** starting January 15, 2024[68](index=68&type=chunk) [8. Other Current Liabilities](index=18&type=section&id=8.%20Other%20Current%20Liabilities) Details other short-term financial obligations, including sales tax contingencies, buyer deposits, and deferred revenue Other Current Liabilities (in thousands) | (in thousands) | September 30, 2023 | December 31, 2022 | | :------------- | :----------------- | :---------------- | | Sales and use tax contingencies | $1,946 | $1,863 | | Buyer deposits | $392 | $318 | | Deferred revenue | $99 | $140 | | Other | $196 | $108 | | Total other current liabilities | $2,633 | $2,429 | [9. Equity](index=19&type=section&id=9.%20Equity) Provides information on the company's equity structure, including shares reserved for issuance and treasury stock activity Shares Reserved for Issuance | | September 30, 2023 | December 31, 2022 | | :-------------------------- | :----------------- | :---------------- | | Options to purchase common stock | 3,930,336 | 4,034,287 | | Restricted stock units outstanding | 4,116,974 | 2,807,981 | | Shares available for future grant under the 2021 Plan | 2,781,826 | 3,151,824 | | Shares available for future grant under the ESPP | 1,572,504 | 1,179,902 | | Total | 12,401,640 | 11,173,994 | - As of September 30, 2023, the company had **334,959 shares of treasury stock**, acquired at a cost of **$1.4 million** under the **$20.0 million Stock Repurchase Program** authorized in August 2023, with approximately **$18.6 million remaining** for future purchases[75](index=75&type=chunk) [10. Stock-based compensation](index=19&type=section&id=10.%20Stock-based%20compensation) Details stock incentive plans, activity for stock options and restricted stock units, and related compensation expense - The 2021 Stock Incentive Plan (2021 Plan) allows for various stock awards, with **2,781,826 shares available for future grants** as of September 30, 2023. The number of shares available for issuance under the 2021 Plan automatically increased by **1,963,010 shares** on January 1, 2023[81](index=81&type=chunk)[82](index=82&type=chunk) Stock Option Activity (since Dec 31, 2022) | | Number of Options | Weighted-Average Exercise Price | | :------------------------------------ | :---------------- | :------------------------------ | | Outstanding as of December 31, 2022 | 4,034,287 | $6.90 | | Exercised | (19,978) | $3.90 | | Cancelled/Forfeited | (83,973) | $6.38 | | Outstanding as of September 30, 2023 | 3,930,336 | $6.92 | | Options exercisable as of September 30, 2023 | 2,799,980 | $6.27 | Restricted Stock Units Activity | | Outstanding Restricted Stock Units | Weighted-Average Grant Date Fair Value | | :-------------------------- | :--------------------------------- | :------------------------------------- | | Outstanding as of December 31, 2022 | 2,807,981 | $7.85 | | Granted | 2,992,595 | $3.95 | | Vested | (1,106,204) | $6.54 | | Cancelled | (577,398) | $7.00 | | Outstanding as of September 30, 2023 | 4,116,974 | $5.49 | Stock-Based Compensation Expense (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost of revenue | $75 | $149 | $312 | $402 | | Sales and marketing | $727 | $704 | $2,176 | $1,765 | | Technology development | $792 | $1,134 | $2,802 | $2,865 | | General and administrative | $1,388 | $1,167 | $4,050 | $2,630 | | Total stock-based compensation expense | $2,982 | $3,154 | $9,340 | $7,662 | [11. Income Taxes](index=22&type=section&id=11.%20Income%20Taxes) Discusses the company's income tax provision, valuation allowance, and impact of net losses on tax expense - The income tax provision was **immaterial** for the three and nine months ended September 30, 2023 and 2022, due to **net losses incurred**. The company maintains a **full valuation allowance** against its net deferred tax assets[94](index=94&type=chunk) [12. Net Loss Per Share](index=22&type=section&id=12.%20Net%20Loss%20Per%20Share) Presents basic and diluted net loss per share calculations, including the impact of potentially dilutive securities Net Loss Per Share (Basic and Diluted) | (in thousands, except share and per share amounts) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(3,305) | $(9,028) | $(19,758) | $(15,677) | | Weighted average common shares outstanding | 39,962,932 | 38,668,231 | 39,647,716 | 38,291,977 | | Net loss per share—basic and diluted | $(0.08) | $(0.23) | $(0.50) | $(0.41) | - Potentially dilutive securities (stock options and restricted stock units) were excluded from diluted EPS calculations as their inclusion would have been **anti-dilutive**[95](index=95&type=chunk) [13. Commitments and Contingencies](index=22&type=section&id=13.%20Commitments%20and%20Contingencies) Outlines contractual obligations and discusses legal proceedings and their potential financial impact Contractual Obligations as of September 30, 2023 (in thousands) | Fiscal Year Ending December 31, | Lease Obligations | Other Obligations | Total Obligations | | :------------------------------ | :---------------- | :---------------- | :---------------- | | 2023 (remaining) | $1,020 | $372 | $1,392 | | 2024 | $4,114 | $1,291 | $5,405 | | 2025 | $4,292 | $506 | $4,798 | | 2026 | $4,292 | $33 | $4,325 | | 2027 | $4,292 | — | $4,292 | | Thereafter | $8,583 | — | $8,583 | | Total | $26,593 | $2,202 | $28,795 | - The company is involved in routine legal proceedings but does not believe current matters will have a **material adverse effect** on its business, financial condition, or results of operations[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting key operating and financial metrics, a detailed comparison of results for the three and nine months ended September 30, 2023 and 2022, and an analysis of liquidity and capital resources. It also includes a reconciliation of non-GAAP financial measures [Company Overview](index=24&type=section&id=Company%20Overview) Provides a brief description of 1stDibs' business model as a leading online marketplace for luxury design products - 1stDibs is a **leading online marketplace** connecting design enthusiasts with sellers of luxury design products, including vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion[103](index=103&type=chunk) - The company operates an **asset-light business model**, facilitating shipping and fulfillment logistics without taking physical possession of items, and provides a trusted purchase experience through a vetted seller base and buyer protection program[104](index=104&type=chunk) [Key Operating and Financial Metrics](index=24&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Presents key performance indicators like GMV, orders, active buyers, and Adjusted EBITDA, reflecting marketplace activity Key Operating and Financial Metrics (in thousands, except for Number of Orders and Active Buyers) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | GMV | $88,983 | $99,213 | $275,905 | $321,514 | | Number of Orders | 31,202 | 35,235 | 98,988 | 110,111 | | Active Buyers | 63,227 | 68,011 | 63,227 | 68,011 | | Adjusted EBITDA | $(1,802) | $(5,456) | $(11,635) | $(16,195) | - GMV decreased by **10.3%** for the three months and **14.2%** for the nine months ended September 30, 2023, compared to the same periods in 2022, indicating a **decline in total economic activity** on the marketplace[107](index=107&type=chunk) - Active Buyers decreased by **7.0%** for the three and nine months ended September 30, 2023, compared to the same periods in 2022, reflecting a **reduction in the buyer base**[107](index=107&type=chunk) - Adjusted EBITDA improved significantly, reducing losses by **67.0%** for the three months and **28.1%** for the nine months ended September 30, 2023, compared to the same periods in 2022[107](index=107&type=chunk) [Components of Results of Operations](index=25&type=section&id=Components%20of%20Results%20of%20Operations) Explains primary drivers of net revenue, cost of revenue, and operating expenses, detailing their composition and impact - Net revenue primarily comprises seller marketplace services (marketplace transactions, subscriptions, listing fees) and other services (advertising). Marketplace transaction fees, ranging from **5% to 50% commissions plus 3% processing fees**, are the largest component[112](index=112&type=chunk) - Cost of revenue includes payment processor fees, hosting, payroll for operations personnel, consulting, and amortization of capitalized internal-use software. It also accounts for the difference between collected and charged shipping amounts[114](index=114&type=chunk)[115](index=115&type=chunk) - Operating expenses are categorized into Sales and Marketing (including advertising and promotional discounts), Technology Development (engineering and product development), General and Administrative (finance, legal, HR, lease expense), and Provision for Transaction Losses (buyer protection program and bad debt)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, comparing net revenue, gross profit, and operating expenses across periods Consolidated Results of Operations (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net revenue | $20,663 | $22,729 | $63,762 | $73,892 | | Cost of revenue | $5,510 | $7,278 | $19,144 | $22,908 | | Gross profit | $15,153 | $15,451 | $44,618 | $50,984 | | Sales and marketing | $8,411 | $11,072 | $28,007 | $34,139 | | Technology development | $4,515 | $6,363 | $17,199 | $18,711 | | General and administrative | $6,772 | $6,731 | $22,323 | $20,635 | | Provision for transaction losses | $688 | $1,183 | $2,940 | $4,432 | | Loss from operations | $(5,233) | $(9,898) | $(25,851) | $(17,249) | | Total other income, net | $1,928 | $870 | $6,093 | $1,572 | | Net loss | $(3,305) | $(9,028) | $(19,758) | $(15,677) | Consolidated Results of Operations as a Percentage of Net Revenue | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net revenue | 100 % | 100 % | 100 % | 100 % | | Cost of revenue | 27 % | 32 % | 30 % | 31 % | | Gross profit | 73 % | 68 % | 70 % | 69 % | | Sales and marketing | 41 % | 49 % | 44 % | 46 % | | Technology development | 22 % | 28 % | 27 % | 25 % | | General and administrative | 33 % | 30 % | 35 % | 28 % | | Provision for transaction losses | 3 % | 5 % | 5 % | 6 % | | Loss from operations | (26)% | (44)% | (41)% | (23)% | | Total other income, net | 10 % | 4 % | 10 % | 2 % | | Net loss | (16)% | (40)% | (31)% | (21)% | [Comparison of the Three Months Ended September 30, 2023 and 2022](index=28&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) Compares financial performance for the three-month periods, highlighting changes in revenue, costs, and profitability - Net revenue decreased by **$2.1 million (9%)** to **$20.7 million**, primarily due to a **$2.0 million decrease in seller marketplace services revenue** driven by lower GMV, impacted by macroeconomic factors[121](index=121&type=chunk) - Cost of revenue decreased by **$1.8 million (24%)** to **$5.5 million**, mainly due to a **$0.6 million decrease in salaries and benefits** from workforce reduction, **$0.5 million in more efficient shipping**, and **$0.3 million in lower credit card processing fees**[123](index=123&type=chunk) - Gross profit decreased by **$0.3 million** to **$15.2 million**, but gross margin improved to **73.3%** from **68.0%** due to cost of revenue decreasing faster than net revenue[124](index=124&type=chunk) - Sales and marketing expenses decreased by **$2.7 million (24%)** to **$8.4 million**, driven by a **$1.2 million reduction in salaries and benefits** and a **$1.3 million decrease in discretionary marketing**[125](index=125&type=chunk) - Technology development expenses decreased by **$1.8 million (29%)** to **$4.5 million**, primarily due to a **$1.5 million reduction in salaries and benefits** and a **$0.3 million decrease in stock-based compensation**[126](index=126&type=chunk)[127](index=127&type=chunk) - Provision for transaction losses decreased by **$0.5 million (42%)** to **$0.7 million**, mainly due to fewer damage claims and new carrier policies[128](index=128&type=chunk) - Other income, net increased by **$1.1 million (122%)** to **$1.9 million**, driven by higher interest income from investment strategies[129](index=129&type=chunk) [Comparison of the Nine Months Ended September 30, 2023 and 2022](index=29&type=section&id=Comparison%20of%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) Compares financial performance for the nine-month periods, detailing changes in revenue, costs, and profitability drivers - Net revenue decreased by **$10.1 million (14%)** to **$63.8 million**, primarily due to an **$8.4 million decrease in seller marketplace services** from lower GMV and a **$1.4 million decrease in software services** due to the Design Manager sale[130](index=130&type=chunk) - Cost of revenue decreased by **$3.8 million (16%)** to **$19.1 million**, driven by **$1.3 million lower credit card processing fees**, **$1.1 million in reduced salaries and benefits**, and **$1.0 million in more efficient shipping expenses**[132](index=132&type=chunk) - Gross profit decreased by **$6.4 million** to **$44.6 million**, but gross margin improved to **70.0%** from **69.0%** due to cost of revenue decreasing faster than net revenue[133](index=133&type=chunk) - Sales and marketing expenses decreased by **$6.1 million (18%)** to **$28.0 million**, mainly from a **$5.2 million reduction in discretionary marketing** and **$0.6 million in lower salaries and benefits**[134](index=134&type=chunk) - Technology development expenses decreased by **$1.5 million (8%)** to **$17.2 million**, primarily due to a **$0.7 million reduction in salaries and benefits** and a **$0.6 million decrease in consulting costs**[135](index=135&type=chunk) - General and administrative expenses increased by **$1.7 million (8%)** to **$22.3 million**, driven by a **$1.4 million increase in stock-based compensation** and **$0.8 million in salaries and benefits**, partially offset by lower vendor rates[136](index=136&type=chunk) - Provision for transaction losses decreased by **$1.5 million (34%)** to **$2.9 million**, due to fewer damage claims and new carrier policies[137](index=137&type=chunk) - Other income, net increased by **$4.5 million (288%)** to **$6.1 million**, primarily due to higher interest income from investment strategies[138](index=138&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA, used by management to evaluate performance - Adjusted EBITDA is a key non-GAAP measure used by management to assess operating performance and leverage, excluding depreciation and amortization, stock-based compensation, other income, income taxes, gain on sale of business, and strategic alternative expenses[111](index=111&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss | $(3,305) | $(9,028) | $(19,758) | $(15,677) | | Depreciation and amortization | $449 | $708 | $1,815 | $2,189 | | Stock-based compensation expense | $2,982 | $3,154 | $9,340 | $7,662 | | Other income, net | $(1,928) | $(870) | $(6,093) | $(1,572) | | Provision for income taxes | — | — | — | — | | Gain on sale of Design Manager | — | — | — | $(9,684) | | Strategic alternative expenses | — | $580 | $3,061 | $887 | | Adjusted EBITDA | $(1,802) | $(5,456) | $(11,635) | $(16,195) | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet financial obligations, detailing cash position, investment, and financing activities - As of September 30, 2023, the company had **$143.0 million in cash, cash equivalents, and short-term investments**, with an accumulated deficit of **$310.8 million**[144](index=144&type=chunk) - Net cash used in operating activities was **$11.5 million** for the nine months ended September 30, 2023, an **improvement from $22.4 million used** in the same period of 2022[151](index=151&type=chunk) - The company believes existing cash, cash equivalents, and short-term investments will be **sufficient to fund operations and capital expenditures for at least the next 12 months**, despite expected continued operating losses[145](index=145&type=chunk) - Net cash used in investing activities was **$109.6 million** for the nine months ended September 30, 2023, primarily due to **$166.5 million in purchases of short-term investments**, partially offset by **$58.2 million in maturities**[152](index=152&type=chunk) - Net cash used in financing activities was **$1.2 million** for the nine months ended September 30, 2023, driven by **$1.3 million in common stock repurchases** under the Stock Repurchase Program[153](index=153&type=chunk) [Contractual Obligations](index=33&type=section&id=Contractual%20Obligations) Summarizes the company's long-term commitments, primarily related to operating lease agreements - As of September 30, 2023, there were **no material changes in contractual obligations** compared to the Form 10-K, with total commitments of **$28.8 million**, primarily related to operating lease agreements[154](index=154&type=chunk)[96](index=96&type=chunk) [Recent Accounting Pronouncements](index=33&type=section&id=Recent%20Accounting%20Pronouncements) Refers to detailed information on recently issued accounting standards and their potential impact on financial statements - Refer to Note 1, 'Basis of Presentation and Summary of Significant Accounting Policies,' for a description of recently issued accounting pronouncements and their potential impact[155](index=155&type=chunk) [Emerging Growth Company](index=33&type=section&id=Emerging%20Growth%20Company) Discusses the company's status as an 'emerging growth company' and its election for extended accounting transition periods - The company is an 'emerging growth company' under the JOBS Act, electing to use the extended transition period for new or revised accounting standards, which may result in financial statements not being comparable to other public companies[156](index=156&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) States no significant changes to critical accounting policies and estimates since the last annual report - There have been **no significant changes** to the company's critical accounting policies and estimates as disclosed in its Form 10-K[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, including interest rate sensitivity, foreign currency fluctuations, credit risk, and inflation risk, and discusses their potential impact on financial condition and results of operations [Interest Rate Sensitivity](index=34&type=section&id=Interest%20Rate%20Sensitivity) Assesses potential impact of hypothetical interest rate changes on cash, cash equivalents, and short-term investments - As of September 30, 2023, with **$143.0 million in cash, cash equivalents, and short-term investments**, a hypothetical **100 basis point change in interest rates** could result in an approximate **$0.7 million change** in these balances[161](index=161&type=chunk) [Foreign Currency Risk](index=34&type=section&id=Foreign%20Currency%20Risk) Discusses exposure to foreign currency fluctuations, particularly for revenues denominated in Euros and British pounds - The company's revenue is primarily in U.S. dollars, Euros, and British pounds. An adverse **10% change in current exchange rates** is not expected to result in more than a **$2.2 million decrease in revenue** for the nine months ended September 30, 2023[163](index=163&type=chunk) [Credit Risk](index=34&type=section&id=Credit%20Risk) Addresses credit risk on accounts receivable, mitigated by upfront payments and a diverse customer base - The company is exposed to credit risk on accounts receivable, mitigated by upfront payments and a diverse customer base. No single customer accounted for **more than 10% of net revenue** for the three and nine months ended September 30, 2023 and 2022[164](index=164&type=chunk) [Inflation Risk](index=34&type=section&id=Inflation%20Risk) Examines potential impact of inflation and market volatility on GMV, net revenue, and ability to offset rising costs - Inflation, along with capital and housing market volatility, has **negatively impacted GMV and net revenue**. The company may not be able to offset higher costs through revenue increases if inflationary pressures continue[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of September 30, 2023, and confirms no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports management's conclusion on the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective at the reasonable assurance level** as of September 30, 2023[167](index=167&type=chunk) [Changes in Internal Control over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Confirms no material changes in internal control over financial reporting during the reporting period - There were **no changes in internal control over financial reporting** during the three months ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[169](index=169&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=35&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) Acknowledges that all control systems have inherent limitations, providing only reasonable, not absolute, assurance - Management acknowledges that any control system, despite being well-designed and operated, provides only **reasonable, not absolute, assurance** due to inherent limitations such as faulty judgments, simple errors, circumvention by individuals, or management override[170](index=170&type=chunk) Part II - Other Information This section provides additional information not covered in financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is involved in routine legal proceedings incidental to its business but does not anticipate any material adverse effect on its business, financial condition, or results of operations from current matters - The company is subject to various claims and contingencies in the ordinary course of business, including litigation related to regulation, business transactions, and employee matters[99](index=99&type=chunk)[171](index=171&type=chunk) - Management believes that the resolution of current legal matters will not have a **material adverse effect** on the company's business, financial condition, or results of operations[99](index=99&type=chunk)[171](index=171&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This comprehensive section details the significant risks and uncertainties that could materially and adversely affect the company's business, financial condition, results of operations, and stock price. These risks are categorized into several areas, including business and industry-specific challenges, privacy and cybersecurity concerns, regulatory and litigation risks, intellectual property issues, operational risks as a public company, tax and accounting matters, and risks related to common stock [Risks Related to Our Business and Industry](index=36&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Highlights risks inherent to the company's operations and the luxury design market, including operating losses, growth challenges, and macroeconomic sensitivities - The company has a history of operating losses, with net losses of **$19.8 million** and **$15.7 million** for the nine months ended September 30, 2023 and 2022, respectively, and an accumulated deficit of **$310.8 million** as of September 30, 2023[173](index=173&type=chunk) - Quarterly and annual results of operations have fluctuated and may continue to do so due to factors like net revenue from luxury design products, ability to attract/retain sellers and buyers, operating expenses, and macroeconomic conditions[174](index=174&type=chunk)[175](index=175&type=chunk) - The company's historical growth may not be indicative of future growth, with net revenue decreasing to **$63.8 million** for the nine months ended September 30, 2023, from **$73.9 million** in the prior year, indicating potential deceleration[178](index=178&type=chunk) - Failure to generate a sufficient volume of luxury design product listings or to accurately vet the authenticity of items could **harm the business, brand, and reputation**[179](index=179&type=chunk)[180](index=180&type=chunk) - The company faces risks from claims that listed items are counterfeit, infringing, hazardous, or illegal, or from liability for fraudulent activities of sellers, which could **damage its brand and reputation**[181](index=181&type=chunk)[185](index=185&type=chunk) - Growth depends on attracting and maintaining an **active community of sellers and buyers**, and failure to do so, or if buyers have negative experiences, could harm the business[186](index=186&type=chunk)[190](index=190&type=chunk) - The company operates in an evolving industry, and its future success depends on adapting to changing preferences, scaling operations, and competing effectively against a broad range of traditional and online vendors[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - The business is susceptible to macroeconomic conditions and consumer discretionary spending, with demand for luxury design products potentially declining during economic uncertainty or due to changing consumer preferences[202](index=202&type=chunk)[204](index=204&type=chunk) - Ineffective marketing efforts, reliance on third parties for traffic, and issues with mobile solutions could **hinder business growth and market share**[210](index=210&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Expansion through acquisitions, such as the past acquisition and subsequent sale of Design Manager, may **divert management attention and prove unsuccessful**[219](index=219&type=chunk)[221](index=221&type=chunk) - Failure to manage growth effectively, attract and retain key personnel, or realize benefits from cost-reduction initiatives (like subleasing office space) could **adversely impact financial results**[222](index=222&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - Further international expansion, while strategic, subjects the company to increased risks such as regulatory compliance, managing diverse operations, and foreign exchange fluctuations[227](index=227&type=chunk)[230](index=230&type=chunk) - The company faces risks from fraudulent transactions, dependence on third-party payment processors, and geopolitical instability (e.g., Russia-Ukraine, Israel-Hamas conflicts) which could **disrupt operations and impact financial results**[232](index=232&type=chunk)[233](index=233&type=chunk)[239](index=239&type=chunk) - The COVID-19 pandemic has impacted business through remote work challenges, potential supply chain disruptions, and reduced demand for luxury goods, with ongoing unpredictable effects[240](index=240&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - The NFT platform, launched in August 2021 and with further investment ceased in February 2023, exposes the company to legal, regulatory, and other risks due to the nascent and evolving nature of cryptocurrencies and NFTs[245](index=245&type=chunk) - Insufficient insurance coverage or exposure to banking institution failures could **adversely affect the company's liquidity and financial condition**[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) [Risks Related to Privacy, Cybersecurity, and Infrastructure](index=50&type=section&id=Risks%20Related%20to%20Privacy%2C%20Cybersecurity%2C%20and%20Infrastructure) Addresses risks concerning data privacy, cybersecurity breaches, platform reliability, and internet access, which could impact reputation and operations - Disclosure of sensitive information about sellers and buyers, or cyber-attacks on the company or its third-party providers, could lead to **curtailed use of the marketplace, liability, and reputational damage**[249](index=249&type=chunk)[251](index=251&type=chunk)[254](index=254&type=chunk) - The company's use and processing of personal information is subject to evolving privacy and data protection laws (e.g., CCPA, CPRA, GDPR), with non-compliance potentially leading to **enforcement actions, litigation, and significant costs**[257](index=257&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - Ineffective mobile solutions or significant disruptions in service from third-party hosts could **harm the platform's usability, growth prospects, and reputation**[216](index=216&type=chunk)[264](index=264&type=chunk)[266](index=266&type=chunk) - Dependence on continued and unimpeded access to the Internet and mobile networks means changes in net neutrality rules or discriminatory practices by service providers could **adversely affect the business**[267](index=267&type=chunk)[268](index=268&type=chunk) - Climate change risks, including extreme weather events, may increasingly impact the business, sellers, and buyers, potentially disrupting operations and transactions[269](index=269&type=chunk) [Risks Related to Regulatory Matters and Litigation](index=53&type=section&id=Risks%20Related%20to%20Regulatory%20Matters%20and%20Litigation) Covers risks from complex and evolving laws, including online commerce, product safety, export controls, anti-corruption, and data protection, potentially leading to compliance costs and penalties - The company is subject to a large number of evolving U.S. and non-U.S. laws and regulations concerning online commerce, privacy, and consumer protection, with compliance being costly and requiring business practice changes[270](index=270&type=chunk)[271](index=271&type=chunk)[274](index=274&type=chunk) - Failure to comply with laws related to the sale of antique and vintage items, including product safety and licensing, could result in **fines, penalties, or governmental enforcement actions**[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) - The company is subject to governmental export and import controls and anti-corruption laws (e.g., U.S. FCPA, U.K. Bribery Act), with potential violations leading to **civil/criminal penalties, reputational harm, and loss of market access**[279](index=279&type=chunk)[280](index=280&type=chunk)[283](index=283&type=chunk) - Increased focus on ESG matters could raise costs, harm reputation, and affect relationships with employees and investors if commitments are not met or standards become more onerous[284](index=284&type=chunk) - Expanding and evolving data protection regulations, such as GDPR and CCPA/CPRA, create complex compliance obligations, potential liabilities, and increased operational costs, especially for cross-border business[286](index=286&type=chunk)[287](index=287&type=chunk)[289](index=289&type=chunk)[291](index=291&type=chunk) [Risks Related to Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Discusses risks associated with protecting the company's intellectual property and potential infringement claims from third parties - Failure to successfully protect intellectual property (copyrights, trade secrets, trademarks, domain names) could **harm the business, competitive position, and brand recognition**, requiring significant resources for monitoring and enforcement[296](index=296&type=chunk)[297](index=297&type=chunk) - The company may be subject to costly intellectual property claims from third parties, potentially requiring significant damages, licensing fees, or development of alternative technologies, which could **divert management attention and harm the business**[298](index=298&type=chunk)[299](index=299&type=chunk) - The platform incorporates open source software, which carries risks of unanticipated license conditions, potential public release of proprietary code, and additional security vulnerabilities[300](index=300&type=chunk) [Risks Related to our Operations as a Public Company](index=58&type=section&id=Risks%20Related%20to%20our%20Operations%20as%20a%20Public%20Company) Outlines challenges and obligations of operating as a public company, including internal control effectiveness, reporting requirements, and compliance costs - Ineffective internal control over financial reporting or disclosure controls could lead to **inaccurate financial reporting, fraud, or untimely periodic reports**, causing loss of investor confidence and stock price decline[301](index=301&type=chunk)[302](index=302&type=chunk) - As an emerging growth company, the company benefits from reduced reporting and disclosure requirements, but this could make its common stock **less attractive to investors** and increase stock price volatility[303](index=303&type=chunk)[305](index=305&type=chunk) - The transition to a public company involves significant legal, accounting, and other expenses, requiring substantial management time and potentially **diverting attention from revenue-generating activities**[307](index=307&type=chunk)[308](index=308&type=chunk) - Failure to strengthen financial reporting systems and internal controls to meet Sarbanes-Oxley Act requirements could result in inability to report financial results timely and accurately or prevent fraud, leading to investigations or sanctions[309](index=309&type=chunk)[311](index=311&type=chunk) [Risks Related to Tax and Accounting Matters](index=60&type=section&id=Risks%20Related%20to%20Tax%20and%20Accounting%20Matters) Details risks associated with evolving tax laws, indirect taxes, cryptocurrency taxation, and accounting standards, which could impact financial results - The company could be required to pay or collect sales taxes in new jurisdictions, including for past sales, due to evolving laws (e.g., Wayfair decision) and remote work, increasing administrative burdens and potentially decreasing future sales[312](index=312&type=chunk) - The application of indirect taxes (sales, VAT, etc.) to online businesses is complex and evolving, with new legislation (e.g., EU VAT reforms) potentially increasing compliance costs and making the marketplace less attractive for sellers[313](index=313&type=chunk)[314](index=314&type=chunk) - Facilitating cryptocurrency transactions on the NFT platform exposes the company to risks under U.S. and foreign tax laws, including reporting obligations and potential adverse tax consequences due to limited guidance and evolving regulations[315](index=315&type=chunk) - Interpretation of existing tax laws by authorities, fluctuations in tax obligations and effective tax rates, and amendments to tax laws could **adversely affect the business and financial results**[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) - The company's ability to use its net operating loss (NOL) carryforwards and other tax attributes may be limited by ownership changes under Sections 382 and 383 of the Internal Revenue Code[320](index=320&type=chunk) - Reported results of operations may be **adversely affected by changes in generally accepted accounting principles (GAAP)** or their interpretations, which could significantly impact financial reporting[321](index=321&type=chunk) [Risks Related to Our Common Stock](index=62&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Addresses risks concerning the trading market for common stock, potential dilution, dividend policy, and corporate governance provisions - An active trading market for the common stock may not develop or be sustained, and the stock price could be **highly volatile** due to various factors, including operational metrics, economic conditions, and market speculation[322](index=322&type=chunk)[323](index=323&type=chunk) - Sales of a substantial number of shares in the public market, particularly by directors, executive officers, and significant stockholders, or the perception of such sales, could cause the **stock price to decline**[326](index=326&type=chunk)[328](index=328&type=chunk) - The share repurchase program may not be fully consummated or enhance long-term stockholder value, and could **increase stock price volatility while diminishing cash reserves**[329](index=329&type=chunk) - Future sales and issuances of common stock or rights to purchase common stock could result in **additional dilution to stockholders** and cause the stock price to decline[330](index=330&type=chunk) - The company does not intend to pay dividends on its common stock, limiting returns on investment to changes in stock value[333](index=333&type=chunk) - Directors, executive officers, and principal stockholders beneficially own a substantial percentage of the stock, allowing them to exert **significant control** over matters subject to stockholder approval[334](index=334&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult, limit attempts to replace management, and potentially **limit the market price of common stock**[335](index=335&type=chunk)[336](index=336&type=chunk) - Claims for indemnification by directors and officers may **reduce available funds** to satisfy third-party claims and deplete cash resources[337](index=337&type=chunk)[338](index=338&type=chunk) - Designation of the Court of Chancery of Delaware as the exclusive forum for certain actions and federal district courts for Securities Act claims could **limit stockholders' ability to choose a favorable judicial forum**[339](index=339&type=chunk)[340](index=340&type=chunk)[344](index=344&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities during the period and details the company's issuer purchases of equity se

Financial Data and Key Metrics Changes - The company reported GMV of $89 million, down 10% year-over-year due to soft demand for luxury home goods and discretionary items [65] - Net revenue was $20.7 million, down 9%, with transaction revenue making up roughly 70% of total revenue [68] - Adjusted EBITDA loss was $1.8 million, an improvement of $3.7 million from a loss of $5.5 million last year, with adjusted EBITDA margin loss of 9% compared to 24% last year [48][58] Business Line Data and Key Metrics Changes - The supply side of the marketplace remains healthy, with over 9,100 seller accounts, up over 30%, and listings grew 16% to over 1.7 million items [40][46] - Average order value was approximately $2,850, up modestly, while median order value decreased by 3% to approximately $1,200 [66] - Auction orders grew 7%, accounting for 7% of total orders, indicating a focus on improving supply quality and conversion [60] Market Data and Key Metrics Changes - Organic traffic accounted for nearly 80% of total traffic, up from roughly 70% a year ago, while paid traffic growth declined due to a pullback in performance marketing [17] - The luxury housing market was down 25% in Q2 and approximately 10% in Q3, impacting GMV performance [23] - The company noted a pronounced decline in GMV trends following geopolitical events, which moderated expectations for fourth-quarter growth [54][71] Company Strategy and Development Direction - The company is focused on capital-efficient growth, shifting resources from auctions and international projects to seller experience and checkout initiatives [3][61] - Management believes that increasing e-commerce penetration and improving shipping services for sellers will drive future growth [37][39] - The company aims to re-accelerate growth while managing expenses, with a focus on improving conversion rates and enhancing user experience [58][62] Management Comments on Operating Environment and Future Outlook - Management acknowledged a period of soft demand and low visibility for luxury home goods, but expressed confidence in the long-term growth potential of e-commerce and luxury markets [36][59] - The company expects to see a rebound in luxury home goods demand, which would allow for meaningful incremental GMV and revenue without proportionally increasing operating expenses [43] - Management highlighted the importance of monitoring macroeconomic indicators and consumer behavior to guide future marketing and operational strategies [52] Other Important Information - The company has undertaken significant restructuring efforts, resulting in a 20% reduction in total operating expenses year-over-year [48][64] - The company ended the quarter with a strong cash position of $143 million, with interest income increasing to approximately $1.8 million [70] - The company repurchased $1.4 million of shares under its $20 million board-authorized repurchase program [49] Q&A Session Summary Question: Can you provide examples of the increasing testing velocity and its impact? - Management noted that testing velocity has increased over 100% year-over-year, contributing to improved conversion rates, although not all tests succeed [38][74] Question: What factors are influencing the Q4 guidance? - Management indicated that macroeconomic conditions and a pullback in performance marketing spending are significant factors affecting the Q4 guidance [22][71] Question: What needs to happen to re-accelerate the active buyer base? - Management stated that improving macroeconomic conditions, particularly in the luxury housing market, is crucial for re-accelerating active buyer growth [82]

1stdibs.Com, Inc. (NASDAQ:DIBS) Q2 2023 Earnings Conference Call August 9, 2023 8:00 AM ET Company Participants Kevin LaBuz - Head-Investor Relations & Corporate Development David Rosenblatt - Chief Executive Officer Thomas Etergino - Chief Financial Officer Conference Call Participants Mark Mahaney - Evercore ISI Ralph Schackart - William Blair Trevor Young - Barclays Steven McDermott - Bank of America Operator Good day, and thank you for standing by. Welcome to the 1stdibs.com Second Quarter 2023 Earnings ...

OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file number 333-256188 1STDIBS.COM, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECUR ...

Financial Data and Key Metrics Changes - The company reported GMV of $97.1 million, down 17% year-over-year due to soft demand for luxury home goods [71] - Gross profit was $14.9 million, down 21%, with gross profit margins at 67%, down from 71% a year ago [52][72] - Adjusted EBITDA loss was $5.3 million compared to a loss of $4.7 million last year, with an adjusted EBITDA margin loss of 24% versus a loss of 18% last year [55][71] Business Line Data and Key Metrics Changes - Jewelry orders grew 12% year-over-year, while demand for at-home categories like art and furniture remained soft [3] - Auctions accounted for over 6% of total orders, with a record number of auction orders growing approximately 10% sequentially [47][89] - The company ended the quarter with over 8,100 seller accounts, up nearly 50%, and listings grew 20% to over 1.6 million items [48][90] Market Data and Key Metrics Changes - Organic traffic growth in international markets like France and Germany was over 200% year-over-year, with double-digit order growth [22] - The company plans to enter Italy and Spain later in 2023, leveraging learnings from previous market launches [42][66] Company Strategy and Development Direction - The company is focused on improving pricing transparency and providing better pricing tools for buyers and sellers [62] - Strategic initiatives include localized marketplaces and enhancing the visibility of competitively priced listings [43][46] - The company aims to stabilize and reaccelerate GMV growth by improving conversion rates, particularly for new buyers [60][62] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in the luxury home goods market and indicated that it may take time to see significant improvements [40] - The company is evaluating additional steps to align expenses with current demand due to a growth outlook below initial expectations [60][93] - Management noted that while traffic and supply growth are strong, conversion rates remain a significant challenge [94] Other Important Information - The company ended the quarter with a strong cash position of $150.5 million, with interest income increasing to approximately $1.5 million [75] - The company introduced new pricing guidance features for sellers and launched new discovery experiences for buyers [43][44] Q&A Session Summary Question: Can you discuss the demand trends and their representation in the market? - Management indicated that the underlying drivers of demand remain consistent, with strong traffic and supply but challenges in conversion rates [78] Question: What was the cadence of performance throughout the quarter? - Management noted that there was no material change in performance month-to-month, although the banking situation had a negative impact [98] Question: How is the strategic review progressing? - Management confirmed that the strategic review is active and committed to evaluating all possible alternatives to improve shareholder value [99] Question: What is the outlook for AOV and its implications? - AOV was down 8% year-over-year, indicating a macro phenomenon affecting all price tiers, with auctions contributing to lower AOV [101] Question: How is the company addressing pricing challenges? - Management emphasized the importance of leveraging historical transactional data to help buyers and sellers with pricing strategies [85]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file number 333-256188 1STDIBS.COM, INC. (Exact name of registrant as specified in its charter) Delaware 94-3389618 (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 333-256188 1stdibs.com, Inc (Exact name of registrant as specified in its charter) Delaware 94-3389618 (State or other ...

1stdibs.Com, Inc. (NASDAQ:DIBS) Q4 2022 Earnings Conference Call March 1, 2023 8:00 AM ET Company Participants Kevin LaBuz - Head, IR and Corporate Development David Rosenblatt - CEO Thomas Etergino - CFO Conference Call Participants Curtis Nagle - Bank of America Trevor Young - Barclays Mark Mahaney - Evercore ISI Nick Jones - JMP Securities Ralph Schackartv - William Blair Operator Good day, and thank you for standing by, and welcome to the 1stdibs.Com, Inc. Fourth Quarter 2022 Earnings Conference Call. [ ...

1stdibs.Com, Inc. (NASDAQ:DIBS) Q3 2022 Earnings Conference Call November 9, 2022 8:00 AM ET Company Participants Kevin LaBuz - Head, IR and Corporate Development David Rosenblatt - CEO Tom Etergino - CFO Conference Call Participants Mark Mahaney - Evercore ISI Trevor Young - Barclays Ralph Schackart - William Blair Curtis Nagle - Bank of America Nick Jones - JMP Securities Aaron Kessler - Raymond James Operator Good day, and welcome to the 1stdibs.com Inc. Q3 2022 Earnings Conference Call. At this time, al ...

Financial Performance - Gross Merchandise Value (GMV) for Q3 2022 was $99.2 million, a decrease of 9.1% from $109.2 million in Q3 2021[96] - Number of Orders in Q3 2022 was 35,235, down 5.7% from 37,355 in Q3 2021[96] - Active Buyers remained at 68,011 in Q3 2022, a decline of 5.2% from 71,783 in Q3 2021[96] - Net revenue for the three months ended September 30, 2022, was $22.7 million, a decrease of $2.8 million or 11% compared to $25.6 million for the same period in 2021[113] - Gross profit for the three months ended September 30, 2022, was $15.5 million, with a gross margin of 68.0%, down from $18.1 million and 70.6% in the prior year[115] - Net loss for the three months ended September 30, 2022, was $9.0 million, compared to a net loss of $6.6 million for the same period in 2021[110] - For the nine months ended September 30, 2022, net revenue was $73.9 million, a decrease of $1.9 million or 3% compared to $75.8 million in the prior year[119] - Gross profit for the nine months ended September 30, 2022, was $51.0 million, with a gross margin of 69.0%, down from $53.9 million and 71.2% in the prior year[120] Expenses and Losses - Adjusted EBITDA for Q3 2022 was $(5.5) million, compared to $(5.4) million in Q3 2021, indicating a slight increase in losses[96] - Operating expenses totaled $25.3 million for the three months ended September 30, 2022, compared to $25.0 million in the same period of 2021, resulting in a loss from operations of $9.9 million[110] - Sales and marketing expenses decreased by $1.8 million or 14% to $11.1 million for the three months ended September 30, 2022, primarily due to reduced discretionary spending[116] - Technology development expenses increased by $1.6 million or 33% to $6.4 million for the three months ended September 30, 2022, driven by higher stock-based compensation[116] - General and administrative expenses increased by 35% to $20.6 million for the nine months ended September 30, 2022, compared to $15.2 million in the prior year[120] - Provision for transaction losses was $1.2 million for the three months ended September 30, 2022, a decrease of 7% from $1.3 million in the prior year[117] - Provision for transaction losses was $4.4 million for the nine months ended September 30, 2022, a 17% increase from $3.8 million in the same period of 2021[122] Cash Flow and Financial Position - Net cash used in operating activities was $22.4 million for the nine months ended September 30, 2022, compared to $5.5 million in the same period of 2021[127] - Net cash provided by investing activities was $12.8 million for the nine months ended September 30, 2022, compared to a net cash used of $1.7 million in the prior year, primarily due to proceeds from the sale of Design Manager[129] - Net cash provided by financing activities decreased to $1.5 million for the nine months ended September 30, 2022, down from $119.6 million in the same period of 2021[130] - As of September 30, 2022, the company had cash and cash equivalents of $158.0 million and an accumulated deficit of $284.2 million[126] Business Operations - The company incurred approximately $0.6 million in non-recurring restructuring charges due to a workforce reduction of about 10%[90] - The sale of Design Manager on June 29, 2022, generated a net gain of $9.7 million for the company[91] - The company transitioned to a fully remote work environment due to COVID-19, impacting operational metrics and employee engagement[92] - Seller marketplace services revenue is derived from commissions ranging from 5% to 50% and processing fees of 3% on successful transactions[102] - The company operates an asset-light business model, facilitating shipping and fulfillment logistics without taking physical possession of items sold[89] - Future revenue is expected to exclude software services following the sale of Design Manager, which will impact overall revenue composition[102] Market and Economic Factors - The company's net revenue is mainly denominated in U.S. dollars, Euros, and British pounds, with no single customer accounting for more than 10% of net revenue for the three and nine months ended September 30, 2022[140] - A hypothetical 100 basis point change in interest rates would not materially affect the fair value of the company's cash and cash equivalents[136] - As of September 30, 2022, a 10% increase or decrease in current exchange rates would not have a material impact on the consolidated financial statements[139] - The company has maintained provisions for potential credit losses, which have been within expectations to date[140] - The effects of inflation on the company's results of operations and financial condition have been deemed immaterial[141]