ThredUp (TDUP) FY Conference Summary Company Overview - **Company**: ThredUp - **Industry**: Secondhand clothing marketplace focusing on women's and kids' apparel - **Business Model**: Operates a consignment model where sellers send in clothing, which is processed and sold online, with sellers receiving payouts upon sale [2][3][5] Key Points and Arguments Competitive Advantages - **Marketplace Connection**: ThredUp connects buyers and sellers in a unique marketplace [5] - **Innovative Supply Chain**: The company has developed a new supply chain for secondhand clothing, described as a "reverse logistics business" [5][6] - **Proprietary Data**: ThredUp utilizes a proprietary data set to value clothing based on supply and demand, enhancing its competitive edge [6][7] Market Positioning - **Target Market**: Focuses on the mass market rather than luxury, claiming this segment is six times larger and less competitive [15] - **Consumer Behavior**: The CEO believes consumers are becoming increasingly lazy, which ThredUp addresses by simplifying the selling process [9][11] Industry Growth and Trends - **Growth Rate**: The company estimates a reasonable industry growth rate in the low double digits [17] - **Secondhand Shopping Trends**: Younger generations are increasingly shopping secondhand, indicating a long-term trend rather than a fad [19][20] Business Performance - **US Business Focus**: After divesting from a European business that was not performing well, ThredUp has been able to reinvest in its US operations, leading to improved financial performance [23][24][25] - **Cash Flow and EBITDA**: The US business has shown positive EBITDA and cash flow, allowing for reinvestment in growth [25][28] Product and Technology Enhancements - **AI Infrastructure**: ThredUp has rebuilt its product technology with an AI-driven backend, significantly improving search functionality and user experience [92][93] - **New Features**: Introduced features like image search and Style Chat to enhance customer engagement and shopping experience [95][97] Financial Metrics - **Contribution Margin**: The contribution margin has improved to the low forties, indicating better profitability [70] - **Customer Acquisition Costs (CAC)**: CACs are decreasing due to improved conversion rates, while lifetime value (LTV) is increasing [71][72] Customer Growth - **New Customer Acquisition**: The company reported a record number of new customers in Q1, with April being the best month ever for new customer acquisition [116] - **Retention Strategy**: ThredUp aims to improve customer retention through better product offerings rather than discounts [121][122] Market Outlook - **Guidance and Consumer Sentiment**: The company is cautiously optimistic about future growth, particularly among younger consumers, despite some negative sentiment in the broader market [128][129] Additional Important Insights - **Operational Efficiency**: The company has room for growth in its automated distribution centers, currently operating at two-thirds capacity [71][85] - **Investment in Growth**: ThredUp plans to reinvest profits into marketing and product development to sustain growth [80][81] - **Unique Selling Proposition**: The integration of social media insights into the shopping experience is seen as a significant innovation [98][100] This summary encapsulates the key points discussed during the ThredUp FY Conference, highlighting the company's strategic advantages, market positioning, and future growth potential.

ThredUp (TDUP) FY Conference Summary Company Overview - **Company**: ThredUp (TDUP) - **Industry**: Resale and second-hand apparel market - **Founded**: February 2009 - **CEO**: James Reinhart Key Financial Metrics - **Q1 Revenue**: $71 million - **Gross Margins**: 79% - **EBITDA Margin**: 5% - **Stock Performance**: Up over 400% year-to-date [3][14][15] Core Business Insights - ThredUp aims to transform the resale sector by leveraging technology to create the world's largest resale platform for apparel, shoes, and accessories [2][3]. - The company has processed over 200 unique second-hand items, indicating a significant scale in operations [3]. - ThredUp has achieved seven consecutive quarters of EBITDA positivity and has been cash generative for several quarters [14][15]. Market Dynamics - The resale industry has seen a shift from growth at all costs to a more disciplined approach focusing on profitability [11][14]. - The second-hand market is expected to grow at strong double-digit rates, driven by changing consumer behaviors, particularly among younger generations who view second-hand shopping as a norm [42][43]. - The company has positioned itself to benefit from potential increases in new apparel prices due to tariffs, making ThredUp a more attractive option for consumers [39][40]. Competitive Landscape - ThredUp competes with off-price retailers like TJ Maxx, but there are no current merger plans [20][21]. - The company has established itself as a marketplace rather than a traditional retailer, which provides competitive advantages [62][64]. - The rise of peer-to-peer platforms may lead to a race to zero in seller fees, impacting the overall market dynamics [48][50]. Technological Advancements - ThredUp has invested heavily in AI to improve product discoverability and customer experience, resulting in significant improvements in conversion rates [27][29][55]. - The implementation of AI-driven search capabilities has allowed for better tagging and personalization of products, enhancing the shopping experience [27][29]. - The company has seen a 95% year-over-year growth in new customer acquisition, indicating successful marketing and product strategies [18][19]. Consumer Behavior Trends - Consumers are increasingly seeking convenience, leading to a preference for platforms that simplify the selling and buying process [35][51]. - The company anticipates that the trend of laziness among consumers will continue, necessitating a focus on making the resale process as easy as possible [35][51]. Challenges and Future Outlook - The CEO acknowledges the challenges faced in the past, particularly with international operations, but is optimistic about focusing on the U.S. market moving forward [79][80]. - ThredUp's future growth will depend on its ability to leverage technology and maintain a competitive edge in the evolving resale market [80]. Additional Insights - The company has been a pioneer in the "resale as a service" (RAS) model, collaborating with various brands to enhance its market presence [24][25]. - ThredUp's efforts to destigmatize second-hand shopping have contributed to its growth and acceptance in the mainstream market [25][26]. This summary encapsulates the key points discussed during the ThredUp FY Conference, highlighting the company's performance, market dynamics, technological advancements, and future outlook.

Core Insights - ThredUp (NASDAQ: TDUP) is leveraging AI to enhance its business operations, resulting in a significant stock price increase of approximately 1,000% in less than a year, with expectations to double again in the near future [1][2][9] Company Overview - ThredUp is not primarily a technology or AI company, but it exemplifies the potential of AI in business [1] - The company has divested over 90% of its European operations to concentrate on the U.S. market, positioning itself as a tariff beneficiary [6] AI Integration - ThredUp employs AI for automating backend processes, improving inspection, and enhancing customer engagement through tools like Image Search, Virtual Stylist, and Personalized Recommendations [2][3] - The Image Search feature allows users to upload images to find similar fashion items, while the Virtual Stylist offers personalized recommendations based on user input [3] Financial Performance - In Q1, ThredUp's headline revenue decreased by 10% year-over-year, but the core business grew by 10%, surpassing expectations [7] - Active buyers increased by 6%, orders rose by 16%, and new active buyers surged by 95%, setting a company record [8] - The gross margin remains strong at nearly 80%, and the adjusted EBITDA margin improved by 240 basis points, indicating enhanced core profitability [8] Future Outlook - Comprehensive losses have contracted by over 65%, with the company on track to achieve GAAP profitability before the end of the decade [9] - ThredUp has raised its guidance for the year, forecasting 10% growth for Q2 and beyond, driven by AI's impact on customer engagement [9] Analyst Sentiment - Analyst interest in ThredUp has been revitalized, with positive revisions following the FQ1 release, indicating a potential upgrade cycle [10] - Analysts have set a target price of approximately $7 for the stock, suggesting a fair value relative to recent price points [11]

Group 1 - ThredUp Inc. is one of the largest online resale platforms for apparel, shoes, and accessories, focusing on transforming resale through technology and sustainability [2] - The company has processed over 200 million unique secondhand items from 60,000 brands across 100 categories, promoting a more sustainable future for the fashion industry [2] - ThredUp's proprietary operating platform includes distributed processing infrastructure, proprietary software, and data science expertise, enabling a managed marketplace [2] Group 2 - CEO James Reinhart and CFO Sean Sobers will participate in investor conferences on June 3 and June 4, 2025, which will be webcast live on ThredUp's investor website [1] - The TD Cowen 9th Annual Future of the Consumer Conference is scheduled for June 3, 2025, from 1:15 PM to 1:45 PM PT [1] - The William Blair 45th Annual Growth Stock Conference will take place on June 4, 2025, from 1:20 PM to 1:50 PM PT [1]

Core Insights - ThredUP reported better-than-expected first-quarter earnings, indicating a growing consumer preference for secondhand clothing, with CEO James Reinhart suggesting that proposed tariffs on Chinese imports could further enhance this trend [1][3]. Financial Performance - ThredUP's revenue for Q1 reached $71.3 million, a 10.5% increase year-over-year and approximately 4% above Wall Street estimates [2] - The gross margin remained strong at 79%, with an adjusted EBITDA profit of $3.8 million, a significant improvement from the previous year's losses [2] - The net loss narrowed to $5.2 million, or $0.04 per share, and the company raised its full-year sales outlook to about $286 million, up from $275 million [2] Market Dynamics - The tightening of the "de minimis" exemption and potential broader apparel tariffs could increase the cost of new clothing, making ThredUP's secondhand offerings more attractive to consumers [3] - Higher import duties may also create a more competitive marketing environment, as major advertisers like Shein and Temu have reduced spending, leading to lower customer-acquisition costs for ThredUP [4] User Engagement - ThredUP experienced a 6% increase in active buyers, reaching 1.37 million, with new-buyer additions surging by 95%, marking the best quarter in the company's history [5] - The implementation of AI search tools, including "Shop Similar" and visual-search features, has improved conversion rates and enhanced the shopping experience [5] Market Reaction - Following the positive earnings report, ThredUP's shares rose nearly 16% in after-hours trading, reflecting investor optimism [6]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 totaled $71.3 million, representing a year-over-year increase of 10.5% [25] - Adjusted EBITDA was $3.8 million, or 5.3% of revenue, doubling the adjusted EBITDA dollars compared to the previous year [26] - Gross margin was 79.1%, a decrease of 100 basis points year-over-year due to higher incentives for new buyers [26] - Active buyers increased by 5.7% year-over-year, totaling 1.4 million for the trailing twelve months [25] Business Line Data and Key Metrics Changes - New buyer acquisition surged by 95% year-over-year, marking the strongest quarter for new buyer acquisition in the company's history [25] - Orders increased by 16.1% year-over-year, reaching 1.4 million [26] - Premium items processed contributed 60% higher margins compared to regular items [18] Market Data and Key Metrics Changes - The company noted that the closure of the de minimis loophole and potential tariff impacts could enhance the value proposition for used clothing [11][12] - The advertising market has become less competitive, allowing for potentially lower customer acquisition costs [12] Company Strategy and Development Direction - The company aims to maintain gross margin and bottom line efficiency while reinvesting in acquiring new buyers and sellers [9] - ThredUP is focusing on enhancing its AI-driven product experience and expanding its resale as a service (RAS) strategy [19][21] - The company is open-sourcing its technology to help brands build scalable circularity business models [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's momentum, citing strong new buyer acquisition and operational improvements [37] - The company remains cautious about the consumer environment but is optimistic about revenue growth for the remainder of the year [28] - Management highlighted that the business was accelerating before recent trade disruptions, indicating a fundamentally improving growth profile [12] Other Important Information - The company generated $2.6 million in cash during the quarter, ending with $55.4 million in cash and securities [27] - Free cash flow reached a record level of $3.9 million for the quarter [27] Q&A Session Summary Question: What is driving the buyer and revenue outperformance? - Management noted that the momentum seen in Q4 continued into Q1, driven by new buyer acquisition and supply-side improvements [36] Question: Are there expectations for Q3 to accelerate from Q2 in revenue? - Management confirmed expectations for revenue acceleration from Q2 to Q3, with Q3 projected to be the high point for EBITDA margin [40] Question: What demographics are being targeted for new customers? - Management indicated that new customers are primarily middle to upper-income individuals, consistent with trends observed post-pandemic [46] Question: How is the marketing spend expected to maintain momentum? - Management plans to continue spending on marketing as long as paybacks remain attractive, with recent trends indicating strong customer acquisition [47] Question: What trends are observed on the seller side of the business? - Management reported good momentum in the seller side, particularly in the consignment premium offering, which has better contribution margins [77] Question: Is there any pricing pressure observed? - Management clarified that the decline in average revenue per order is due to the mix of new buyers rather than pricing pressure [78]

Financial Data and Key Metrics Changes - For Q1 2025, revenue totaled $71.3 million, an increase of 10.5% year over year [23] - Adjusted EBITDA was $3.8 million, or 5.3% of revenue, doubling adjusted EBITDA dollars versus last year [25] - Gross margin was 79.1%, a 100 basis point decrease compared to the same quarter last year [25] - Active buyers grew to 1.4 million, up 5.7% year over year, with orders up 16.1% [24] Business Line Data and Key Metrics Changes - New buyer acquisition increased by 95% year over year, marking the strongest quarter for new buyer acquisition in the company's history [24] - Premium items sold contributed margins that are 60% higher than regular items sold, indicating a shift towards higher-value goods [17] Market Data and Key Metrics Changes - The company noted that the closure of the de minimis loophole and potential tariff impacts could enhance the value proposition for used clothing [9][10] - The advertising market is becoming less competitive, which may lead to lower customer acquisition costs [10] Company Strategy and Development Direction - The company aims to maintain gross margin and bottom line efficiency while reinvesting in acquiring new buyers and sellers [6] - The strategy includes expanding the seller experience and optimizing the marketplace to drive growth [16] - The company is focusing on AI-driven product experiences to enhance customer engagement and conversion rates [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's ability to sustain growth despite macroeconomic uncertainties [36] - The company is cautious but optimistic about the consumer environment, expecting continued positive trends [27] - Management highlighted that the business was accelerating before recent trade disruptions, indicating resilience [10] Other Important Information - The company generated $2.6 million in cash during Q1, with free cash flow reaching a record level of $3.9 million [26] - The company plans to raise its revenue guidance for the full year of 2025, reflecting positive trends observed in Q1 [27] Q&A Session Summary Question: What is driving the buyer and revenue outperformance? - Management noted that the momentum seen in Q4 continued into Q1, driven by new buyer acquisition and supply-side improvements [36] Question: Are there expectations for Q3 to accelerate from Q2 in revenue? - Management confirmed that they expect revenue to accelerate from Q2 to Q3, with Q3 projected to be the high point for EBITDA margin [39] Question: What demographics are being targeted for new customers? - The company is attracting slightly more middle to upper-income customers, consistent with trends observed post-pandemic [46] Question: How does the company plan to maintain marketing momentum? - Management indicated that they will continue to invest in marketing as long as paybacks remain attractive, benefiting from reduced competition in advertising [47] Question: What trends are seen on the seller side of the business? - The company is experiencing good momentum in the seller side, particularly in the consignment premium offering, which has better contribution margins [78] Question: Is there any pricing pressure observed? - Management clarified that the decline in average revenue per order is due to the mix of new buyers versus existing buyers, not due to pricing pressure [79]

Part I. Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 unaudited financial statements show revenue growth to **$71.3 million**, a reduced net loss of **$5.2 million**, and stable assets, following the late 2024 divestiture of its European business [Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $41,057 | $31,851 | | Total current assets | $60,460 | $56,922 | | Total assets | $172,500 | $171,225 | | Total current liabilities | $65,605 | $61,524 | | Total liabilities | $116,417 | $114,924 | | Total stockholders' equity | $56,083 | $56,301 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations (in thousands) | Statement of Operations (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $71,291 | $64,533 | | Gross profit | $56,371 | $51,713 | | Operating loss | $(5,434) | $(12,395) | | Loss from continuing operations | $(5,215) | $(12,190) | | Loss from discontinued operations, net of tax | — | $(4,364) | | Net loss | $(5,215) | $(16,554) | | Total loss per share, basic and diluted | $(0.04) | $(0.15) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by continuing operating activities | $5,743 | $3,288 | | Net cash provided by (used in) continuing investing activities | $5,075 | $(5,291) | | Net cash used in continuing financing activities | $(1,589) | $(1,480) | | Net change in cash, cash equivalents, and restricted cash | $9,229 | $(5,987) | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Remix divestiture as a discontinued operation, reclassification of revenue reporting, termination of the customer loyalty program, and compliance with debt covenants - In Q4 2024, the company divested its European business, **Remix**, now reported as a discontinued operation, with all continuing operations discussions excluding Remix results[36](index=36&type=chunk)[82](index=82&type=chunk)[88](index=88&type=chunk) - Beginning in Q1 2025, the company combined consignment and product revenue into a single 'revenue' line item due to the shift to a primarily consignment model[35](index=35&type=chunk)[97](index=97&type=chunk) - The customer loyalty program was discontinued as of **March 31, 2025**, with revenue from this program at **$1.5 million** in Q1 2025, down from **$3.7 million** in Q1 2024[46](index=46&type=chunk) - As of **March 31, 2025**, the company had **$21.3 million** outstanding under its Term Loan and was in compliance with all debt covenants[65](index=65&type=chunk)[67](index=67&type=chunk) [Management's Discussion and Analysis (MD&A)](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights Q1 revenue growth to **$71.3 million**, positive Non-GAAP Adjusted EBITDA of **$3.8 million**, improved operating leverage, and sufficient liquidity for the next 12 months [Key Financial and Operating Metrics](index=23&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Key Metrics (Q1 2025 vs Q1 2024) | Key Metrics (Q1 2025 vs Q1 2024) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Active Buyers (in thousands) | 1,370 | 1,296 | +5.7% | | Orders (in thousands) | 1,371 | 1,181 | +16.1% | | Revenue (in thousands) | $71,291 | $64,533 | +10.5% | | Gross Margin | 79.1% | 80.1% | -100 bps | | Loss from continuing operations (in thousands) | $(5,215) | $(12,190) | -57.2% | | Non-GAAP Adjusted EBITDA (in thousands) | $3,808 | $1,888 | +101.7% | [Results of Operations](index=24&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) Revenue increased **10.5%** to **$71.3 million** driven by buyer and order growth, while gross margin declined and operating expenses decreased due to cost efficiencies - Revenue growth was primarily driven by a **5.7% increase in Active Buyers** and a **16.1% increase in Orders**, reflecting strength in the core marketplace business[98](index=98&type=chunk) - Gross margin decreased to **79.1%** from **80.1%** year-over-year, mainly due to higher outbound shipping, labor, and packaging costs[99](index=99&type=chunk) - Operations, product, and technology expenses decreased by **$2.0 million**, primarily due to a **$1.1 million** decrease in severance costs from the March 2024 workforce reorganization[100](index=100&type=chunk) - Sales, general, and administrative expenses decreased by **$2.6 million**, mainly from a **$3.6 million** reduction in personnel-related costs, including a **$1.2 million** decrease in severance costs from the 2024 reorganization[102](index=102&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company generated **$5.7 million** in positive operating cash flow, holding **$55.4 million** in liquidity, deemed sufficient for at least the next 12 months - The company generated positive cash flows from continuing operations of **$5.7 million** for Q1 2025, an increase from **$3.3 million** in the prior year period[105](index=105&type=chunk)[109](index=109&type=chunk) - As of **March 31, 2025**, the company had cash, cash equivalents, and short-term marketable securities totaling **$55.4 million**[105](index=105&type=chunk) - Management believes existing cash and available credit will be sufficient for at least the next **12 months** and does not anticipate expanding its distribution network in the near term[106](index=106&type=chunk) [Market Risk Disclosures](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include immaterial interest rate exposure and significant inflation risk impacting operating costs and potentially customer spending - The company's Term Loan bears a variable interest rate, but a **1%** change in rates would not materially impact annual interest expense[117](index=117&type=chunk) - Inflation remains a key risk, contributing to rising costs for labor, freight, and other operational expenses, potentially affecting customer purchasing power and revenue growth[118](index=118&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of **March 31, 2025**, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of **March 31, 2025**[120](index=120&type=chunk) - There were no material changes in internal control over financial reporting during the quarter[121](index=121&type=chunk) Part II. Other Information [Legal Proceedings, Risk Factors, and Other Disclosures](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in material legal proceedings, and no material changes occurred to risk factors, unregistered equity sales, or senior security defaults - The company is not currently a party to any material pending legal proceedings[124](index=124&type=chunk) - There have been no material changes to the company's risk factors as disclosed in its Fiscal 2024 10-K[125](index=125&type=chunk)

Financial Performance - Q1 2025 revenue reached $71 million, showing a year-over-year growth of 10%[8] - Q1 2025 gross profit was $56 million, resulting in a gross profit margin of 79%[8] - Q1 2025 Adjusted EBITDA was $4 million, representing an Adjusted EBITDA margin of 5%[8] Operational Metrics - ThredUp had 14 million active buyers in Q1 2025, a year-over-year increase of 6%[8] - Q1 2025 orders totaled 14 million, reflecting a year-over-year growth of 16%[8] - The company saved 666 million pounds of carbon emissions, 13 billion kWh of energy, and 7 billion gallons of water[8] Strategic Initiatives - ThredUp's operating platform leverages multi-year infrastructure investments for single-SKU logistics at scale[10] - The company's AI-powered search tools, including image search and chat search, enhance the customer experience[27, 28] - The U S secondhand apparel market is expected to grow at a 9% CAGR from 2024 to 2029[37]

[Executive Summary & Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Outlook) [Q1 2025 Performance Highlights](index=1&type=section&id=Q1%202025%20Performance%20Highlights) ThredUp demonstrated strong performance in Q1 2025, achieving significant year-over-year growth in revenue, gross profit, and orders, alongside improved profitability metrics Q1 2025 Key Financial and Operational Metrics (Year-over-Year) | Metric | Q1 2025 | Q1 2024 | Year-over-Year Change | | :------------------------------------------------ | :------------- | :------------- | :------- | | Revenue | $71.3 Million USD | $64.5 Million USD | +10.5% | | Gross Profit | $56.4 Million USD | $51.7 Million USD | +9.0% | | Gross Margin | 79.1% | 80.1% | -1.0 pp | | Loss from Continuing Operations | $(5.2) Million USD | $(12.2) Million USD | -57.4% | | Adjusted EBITDA from Continuing Operations | $3.8 Million USD | $1.9 Million USD | +100.0% | | Adjusted EBITDA Margin from Continuing Operations | 5.3% | 2.9% | +2.4 pp | | Active Buyers | 1,370 Thousand | 1,296 Thousand | +5.7% | | Orders | 1,371 Thousand | 1,181 Thousand | +16.1% | | Cash, Cash Equivalents, Restricted Cash, and Short-Term Marketable Securities (End of Quarter) | $55.4 Million USD | N/A | N/A | [Financial Outlook](index=1&type=section&id=Financial%20Outlook) ThredUp provided financial guidance for Q2 2025 and the full fiscal year 2025, anticipating continued revenue growth and further improvement in Adjusted EBITDA margin [Second Quarter 2025 Outlook](index=1&type=section&id=Second%20Quarter%202025%20Outlook) For Q2 2025, ThredUp projects revenue between $72.5 million and $74.5 million, a gross margin of 77.0% to 79.0%, and an Adjusted EBITDA margin of approximately 3.3% Q2 2025 Financial Guidance | Metric | Range/Amount | | :----------------------- | :---------- | | Revenue | $72.5 - $74.5 Million USD | | Gross Margin | 77.0% - 79.0% | | Adjusted EBITDA Margin | Approx. 3.3% | | Depreciation and Amortization | Approx. $3.2 Million USD | | Stock-Based Compensation Expense | Approx. $3.7 Million USD | | Weighted-Average Shares Outstanding | Approx. 119 Million shares | [Fiscal Year 2025 Outlook](index=1&type=section&id=Fiscal%20Year%202025%20Outlook) For the full fiscal year 2025, the company anticipates revenue between $281.0 million and $291.0 million, a gross margin of 77.0% to 79.0%, and an Adjusted EBITDA margin of approximately 4.0% Fiscal Year 2025 Financial Guidance | Metric | Range/Amount | | :----------------------- | :---------- | | Revenue | $281.0 - $291.0 Million USD | | Gross Margin | 77.0% - 79.0% | | Adjusted EBITDA Margin | Approx. 4.0% | | Depreciation and Amortization | Approx. $12.6 Million USD | | Stock-Based Compensation Expense | Approx. $16.0 Million USD | | Weighted-Average Shares Outstanding | Approx. 122 Million shares | [Financial Performance](index=2&type=section&id=Financial%20Performance) [Condensed Consolidated Statements of Operations](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) ThredUp's condensed consolidated statements of operations present multi-quarter trends in revenue, costs, gross profit, operating expenses, and net loss, showing a recent decline in operating losses and sustained high gross margins Q1 2025 Operating Results (Year-over-Year) | Metric | Q1 2025 (Thousand USD) | Q1 2024 (Thousand USD) | Year-over-Year Change | | :----------------------- | :--------------------- | :--------------------- | :----------- | | Revenue | $71,291 | $64,533 | +10.5% | | Cost of Revenue | $14,920 | $12,820 | +16.4% | | Gross Profit | $56,371 | $51,713 | +9.0% | | Gross Margin | 79.1% | 80.1% | -1.0 pp | | Total Operating Expenses | $61,805 | $64,108 | -3.6% | | Operating Loss | $(5,434) | $(12,395) | -56.2% | | Loss from Continuing Operations | $(5,215) | $(12,190) | -57.2% | - Operating expenses as a percentage of revenue decreased from **99.3% in Q1 2024** to **86.7% in Q1 2025**, indicating improved operational efficiency[6](index=6&type=chunk) - Operating loss as a percentage of revenue improved from **(19.2)% in Q1 2024** to **(7.6)% in Q1 2025**[6](index=6&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, ThredUp reported total assets of $172.5 million and total liabilities of $116.4 million, with a decrease in total current assets and an increase in accounts payable compared to June 30, 2024 Key Balance Sheet Data as of March 31, 2025 | Metric | Amount (Thousand USD) | | :-------------------------------- | :------------ | | Total Current Assets | $60,460 | | Total Assets | $172,500 | | Total Current Liabilities | $65,605 | | Total Liabilities | $116,417 | | Total Stockholders' Equity | $56,083 | - Compared to June 30, 2024, cash and cash equivalents slightly decreased from **$43,135 thousand** to **$41,057 thousand**, but showed a recovery from December 31, 2024[10](index=10&type=chunk) - Marketable securities decreased from **$10,525 thousand** to **$5,719 thousand**[10](index=10&type=chunk) - Accounts payable increased from **$6,120 thousand** to **$13,000 thousand**[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, ThredUp generated **$5.7 million** in net cash from continuing operating activities, a significant improvement from prior quarters, with a net increase of **$9.2 million** in cash, cash equivalents, and restricted cash Q1 2025 Cash Flows (Continuing Operations) | Metric | Q1 2025 (Thousand USD) | Q1 2024 (Thousand USD) | | :------------------------------------------------ | :--------------------- | :--------------------- | | Net Cash Provided by (Used in) Continuing Operating Activities | $5,743 | $(3,035) | | Net Cash Provided by (Used in) Continuing Investing Activities | $5,075 | $1,164 | | Net Cash Provided by (Used in) Continuing Financing Activities | $(1,589) | $(1,182) | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash from Continuing Operations | $9,229 | $(3,053) | | Cash, Cash Equivalents, and Restricted Cash (End of Period) | $49,717 | $50,125 | - Net cash flow from continuing operating activities significantly improved, shifting from a **negative value in Q1 2024** to a **positive value in Q1 2025**[11](index=11&type=chunk) - Net cash flow from investing activities was positive, primarily driven by the **sale and maturity of marketable securities**[11](index=11&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted EBITDA (Loss) Reconciliation](index=3&type=section&id=Adjusted%20EBITDA%20%28Loss%29%20Reconciliation) ThredUp's Adjusted EBITDA from continuing operations significantly improved to **$3.8 million in Q1 2025**, doubling from **$1.9 million in Q1 2024**, with an Adjusted EBITDA margin reaching **5.3%**, after excluding non-cash and non-recurring items like stock-based compensation, depreciation, and restructuring charges Adjusted EBITDA (Loss) from Continuing Operations (Year-over-Year) | Metric | Q1 2025 (Thousand USD) | Q1 2024 (Thousand USD) | Year-over-Year Change | | :----------------------- | :--------------------- | :--------------------- | :----------- | | Loss from Continuing Operations | $(5,215) | $(12,190) | -57.2% | | Stock-Based Compensation Expense | $5,520 | $6,911 | -20.1% | | Depreciation and Amortization | $3,169 | $3,748 | -15.4% | | Adjusted EBITDA (Loss) | $3,808 | $1,888 | +101.7% | | Adjusted EBITDA (Loss) Margin | 5.3% | 2.9% | +2.4 pp | - The company has achieved **positive Adjusted EBITDA** for the fourth consecutive quarter[7](index=7&type=chunk) [Non-GAAP Operating Expenses Reconciliation](index=4&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) In Q1 2025, ThredUp's non-GAAP operating expenses were **$56.3 million**, representing **79.0% of revenue**, a significant improvement from **84.4% in Q1 2024**, primarily due to the exclusion of stock-based compensation and restructuring charges Non-GAAP Operating Expenses (Year-over-Year) | Metric | Q1 2025 (Thousand USD) | Q1 2024 (Thousand USD) | Year-over-Year Change | | :----------------------- | :--------------------- | :--------------------- | :----------- | | Total Operating Expenses (GAAP) | $61,805 | $64,108 | -3.6% | | Less: Stock-Based Compensation Expense | $(5,520) | $(6,911) | -20.1% | | Less: Severance and Other Restructuring Charges | $(3) | $(2,731) | -99.9% | | Total Non-GAAP Operating Expenses | $56,288 | $54,466 | +3.3% | | Non-GAAP Operating Expenses as a Percentage of Revenue | 79.0% | 84.4% | -5.4 pp | - Stock-based compensation expense decreased year-over-year across all categories: **operations, product and technology; marketing; and selling, general and administrative**[8](index=8&type=chunk) - Severance and other restructuring charges in Q1 2025 were **negligible** compared to Q1 2024[9](index=9&type=chunk) [Non-GAAP Free Cash Flow Reconciliation](index=8&type=section&id=Non-GAAP%20Free%20Cash%20Flow%20Reconciliation) ThredUp's non-GAAP free cash flow from continuing operations reached **$3.9 million in Q1 2025**, a significant improvement from negative free cash flow in Q1 2024, indicating enhanced cash generation capability after capital expenditures Non-GAAP Free Cash Flow from Continuing Operations (Year-over-Year) | Metric | Q1 2025 (Thousand USD) | Q1 2024 (Thousand USD) | | :------------------------------------------------ | :--------------------- | :--------------------- | | Net Cash Provided by (Used in) Continuing Operating Activities | $5,743 | $(3,035) | | Less: Purchases of Property and Equipment | $(1,815) | $(848) | | Non-GAAP Free Cash Flow from Continuing Operations | $3,928 | $(3,883) | - The company has transitioned from **negative to positive free cash flow**, demonstrating stronger cash management capabilities[12](index=12&type=chunk) [Operational Metrics](index=3&type=section&id=Operational%20Metrics) [Active Buyers and Orders](index=3&type=section&id=Active%20Buyers%20and%20Orders) ThredUp achieved growth in key operational metrics in Q1 2025, with active buyers increasing **5.7% year-over-year to 1,370 thousand** and orders growing **16.1% to 1,371 thousand** Active Buyers and Orders (Year-over-Year) | Metric | Q1 2025 (Thousands) | Q1 2024 (Thousands) | Year-over-Year Change | | :----------- | :------------------ | :------------------ | :------- | | Active Buyers | 1,370 | 1,296 | +5.7% | | Orders | 1,371 | 1,181 | +16.1% | - Both metrics have shown **consistent growth** over the past several quarters, indicating expanding customer engagement and transaction volume[7](index=7&type=chunk) [Additional Information](index=9&type=section&id=Additional%20Information) [About ThredUp](index=9&type=section&id=About%20ThredUp) ThredUp is a leading online resale platform for apparel, footwear, and accessories, driving resale through technology and a 'secondhand first' mission, offering sellers an easy way to clear closets and buyers up to 90% off branded items, supported by its proprietary operating platform and Resale-as-a-Service (RaaS) model - ThredUp's mission is to inspire the world to **think secondhand first**, transforming the resale industry through technology[14](index=14&type=chunk) - The company is one of the **largest online resale platforms** for apparel, footwear, and accessories globally, having processed over **200 million unique secondhand items** across **60,000 brands and 100 categories**[14](index=14&type=chunk) - Its proprietary operating platform underpins its managed marketplace and offers a **Resale-as-a-Service (RaaS) model** to help other brands and retailers provide customizable resale experiences[14](index=14&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future financial and operational performance, business developments, market trends, and strategic initiatives, which are subject to significant risks and uncertainties, and investors should note that actual results may differ materially from these projections - Forward-looking statements pertain to future events or the company's future financial or operating performance, including **Q2 and full-year 2025 financial guidance**, business developments, market trends, **AI technology investments**, RaaS model expansion, and active buyer acquisition[15](index=15&type=chunk) - These statements are subject to **significant risks and uncertainties**, and actual results may differ from expectations[15](index=15&type=chunk)[16](index=16&type=chunk) - The company undertakes no obligation to update any forward-looking statements unless required by law, with further risk information available in its **periodic reports filed with the SEC**[16](index=16&type=chunk)[17](index=17&type=chunk) [Non-GAAP Financial Measures and Other Operating and Business Metrics Definitions](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Operating%20and%20Business%20Metrics%20Definitions) This section defines non-GAAP financial measures used in the report, including Adjusted EBITDA (Loss) from continuing operations, Adjusted EBITDA (Loss) margin from continuing operations, non-GAAP operating expenses, and non-GAAP free cash flow from continuing operations, along with key operating metrics like active buyers and orders, which are used for performance evaluation and comparability but are not GAAP substitutes - Non-GAAP financial measures include **Adjusted EBITDA (Loss) from continuing operations**, **Adjusted EBITDA (Loss) margin from continuing operations**, **non-GAAP operating expenses**, and **non-GAAP free cash flow from continuing operations**[18](index=18&type=chunk) - These non-GAAP metrics are utilized for assessing **operating performance, operating leverage, internal planning, and forecasting**, and for comparability with other companies, but are not substitutes for GAAP results[18](index=18&type=chunk) - Active buyers are defined as ThredUp buyers who have made at least one purchase in the preceding twelve months, while orders represent the total number of orders placed by buyers across all marketplaces (including RaaS clients) in a given period, net of cancellations[23](index=23&type=chunk)