[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents ThredUp Inc.'s unaudited condensed consolidated financial statements, management's discussion and analysis, market risk, and internal controls for the quarter ended March 31, 2024 [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents ThredUp Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2024, including the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes on significant accounting policies and specific financial components [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's balance sheet data as of March 31, 2024, and December 31, 2023, highlighting key asset, liability, and equity changes Condensed Consolidated Balance Sheet Highlights (March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total current assets | $86,856 | $93,888 | $(7,032) | -7.49% | | Total assets | $244,279 | $249,967 | $(5,688) | -2.28% | | Total current liabilities | $77,071 | $76,673 | $398 | 0.52% | | Total liabilities | $150,749 | $146,050 | $4,699 | 3.22% | | Total stockholders' equity | $93,530 | $103,917 | $(10,387) | -9.99% | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's operational performance for the three months ended March 31, 2024 and 2023, including revenue, gross profit, and net loss Condensed Consolidated Statements of Operations Highlights (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total revenue | $79,588 | $75,922 | $3,666 | 4.83% | | Gross profit | $55,326 | $51,093 | $4,233 | 8.28% | | Operating loss | $(16,711) | $(20,183) | $3,472 | -17.20% | | Net loss | $(16,554) | $(19,793) | $3,239 | -16.36% | | Loss per share, basic and diluted | $(0.15) | $(0.19) | $0.04 | -21.05% | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the company's comprehensive loss for the three months ended March 31, 2024 and 2023, including net loss and other comprehensive income (loss) Condensed Consolidated Statements of Comprehensive Loss Highlights (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Net loss | $(16,554) | $(19,793) | $3,239 | -16.36% | | Total other comprehensive income (loss) | $(870) | $1,154 | $(2,024) | -175.39% | | Total comprehensive loss | $(17,424) | $(18,639) | $1,215 | -6.52% | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in stockholders' equity for the three months ended March 31, 2024, and the year ended December 31, 2023 Condensed Consolidated Statements of Stockholders' Equity Highlights (March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total Stockholders' Equity | $93,530 | $103,917 | $(10,387) | | Shares Outstanding | 110,217 | 108,784 | 1,433 | - The decrease in total stockholders' equity was primarily driven by the **net loss of $16.554 million** and other comprehensive loss of **$0.870 million**, partially offset by stock-based compensation and issuance of common stock[24](index=24&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash flow activities from operations, investing, and financing for the three months ended March 31, 2024 and 2023 Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, 2024 vs. 2023) | Cash Flow Activity | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Operating activities | $1,393 | $(4,458) | $5,851 | | Investing activities | $(5,785) | $18,900 | $(24,685) | | Financing activities | $(1,480) | $(1,192) | $(288) | | Net change in cash, cash equivalents, and restricted cash | $(5,987) | $12,710 | $(18,697) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Organization and Description of Business](index=10&type=section&id=1.%20Organization%20and%20Description%20of%20Business) This note describes ThredUp Inc.'s core business as an online resale platform for secondhand apparel, founded in January 2009 - ThredUp Inc. operates a large online resale platform for secondhand apparel, shoes, and accessories, founded in January 2009[30](index=30&type=chunk) [2. Significant Accounting Policies](index=10&type=section&id=2.%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the interim financial statements, including revenue recognition details - The financial statements are prepared in accordance with U.S. GAAP for interim financial information, with certain footnotes condensed or omitted as permitted[31](index=31&type=chunk) - The Company recognized **$3.7 million in revenue** from loyalty reward redemption for the three months ended March 31, 2024, up from **$2.1 million** in the prior year[41](index=41&type=chunk) - Breakage revenue from gift cards was **$1.3 million** for the three months ended March 31, 2024, which was not material in the prior year[43](index=43&type=chunk) - Revenue from site credit redemption increased to **$13.5 million** for the three months ended March 31, 2024, from **$9.4 million** in the prior year[44](index=44&type=chunk) [3. Financial Instruments and Fair Value Measurements](index=13&type=section&id=3.%20Financial%20Instruments%20and%20Fair%20Value%20Measurements) This note details the fair value measurements of the company's financial instruments, including cash equivalents and marketable securities Fair Value of Financial Instruments (March 31, 2024 vs. December 31, 2023) | Asset Category | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------- | :----------------------------- | :----------------------------- | | Total cash equivalents | $25,282 | $32,066 | | Total marketable securities | $12,399 | $8,100 | | Total assets at fair value | $37,681 | $40,166 | - Marketable securities are classified as available-for-sale, with fair values obtained using third-party pricing services, primarily utilizing Level 2 inputs[51](index=51&type=chunk)[52](index=52&type=chunk) [4. Property and Equipment, Net](index=14&type=section&id=4.%20Property%20and%20Equipment,%20Net) This note provides a breakdown of the company's property and equipment, net of accumulated depreciation and amortization Property and Equipment, Net (March 31, 2024 vs. December 31, 2023) | Category | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total property and equipment, at cost | $136,614 | $135,553 | | Less: accumulated depreciation and amortization | $(51,531) | $(47,881) | | Property and equipment, net | $85,083 | $87,672 | - Depreciation and amortization expense for property and equipment increased to **$4.3 million** for the three months ended March 31, 2024, from **$3.0 million** in the prior year[54](index=54&type=chunk) [5. Goodwill and Other Intangible Assets](index=14&type=section&id=5.%20Goodwill%20and%20Other%20Intangible%20Assets) This note presents the carrying amounts of goodwill and other intangible assets, highlighting changes due to foreign currency translation Goodwill and Intangible Assets (March 31, 2024 vs. December 31, 2023) | Asset Category | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Goodwill | $11,677 | $11,957 | | Net Carrying Amount of Intangible Assets | $7,329 | $8,156 | - The decrease in goodwill and intangible assets was primarily due to foreign currency translation adjustments[55](index=55&type=chunk)[57](index=57&type=chunk) [6. Balance Sheet Components](index=15&type=section&id=6.%20Balance%20Sheet%20Components) This note provides detailed breakdowns of specific balance sheet items, including inventories and accrued and other current liabilities Inventories (March 31, 2024 vs. December 31, 2023) | Inventory Type | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------- | :----------------------------- | :----------------------------- | | Work in process | $1,779 | $3,333 | | Finished goods | $9,803 | $12,354 | | Total | $11,582 | $15,687 | Accrued and Other Current Liabilities (March 31, 2024 vs. December 31, 2023) | Liability Type | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Gift card and site credit liabilities | $12,129 | $11,407 | | Accrued compensation | $6,505 | $4,092 | | Deferred revenue | $3,730 | $6,377 | | Total | $37,541 | $35,934 | [7. Long-Term Debt](index=16&type=section&id=7.%20Long-Term%20Debt) This note details the company's long-term debt obligations, including the Term Loan facility and its future principal payment schedule - The Company has a Term Loan facility with Western Alliance Bank, amended in December 2023, for up to **$48.8 million**, maturing on July 14, 2027[60](index=60&type=chunk)[61](index=61&type=chunk) - As of March 31, 2024, **$25.3 million** was outstanding under the Term Loan, with an effective interest rate of **10.73%** The Company was in compliance with all debt covenants[63](index=63&type=chunk)[64](index=64&type=chunk) Future Annual Principal Payments of Term Loan (as of March 31, 2024) | Year | Amount (in thousands) | | :--- | :-------------------- | | 2024 (Remaining nine months) | $3,000 | | 2025 | $4,000 | | 2026 | $4,000 | | 2027 | $14,333 | | Total principal payments | $25,333 | [8. Common Stock and Stockholders' Equity](index=16&type=section&id=8.%20Common%20Stock%20and%20Stockholders'%20Equity) This note provides information on the company's common stock issued and outstanding, and the voting rights of different classes Common Stock Issued and Outstanding (March 31, 2024 vs. December 31, 2023) | Class | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------- | :----------------------------- | :----------------------------- | | Class A common stock | 80,273 | 78,830 | | Class B common stock | 29,944 | 29,954 | | Total | 110,217 | 108,784 | - Class A common stock has one vote per share, while Class B common stock has ten votes per share and is convertible to Class A[67](index=67&type=chunk) [9. Stock-Based Compensation](index=17&type=section&id=9.%20Stock-Based%20Compensation) This note details the stock-based compensation expense recognized across various categories and the unrecognized compensation cost for nonvested RSUs Stock-Based Compensation Expense (Three Months Ended March 31, 2024 vs. 2023) | Expense Category | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operations, product, and technology | $2,571 | $3,671 | | Marketing | $202 | $1,205 | | Sales, general, and administrative | $4,438 | $4,515 | | Total stock-based compensation expense | $7,211 | $9,391 | - Total unrecognized compensation cost for nonvested RSUs was **$32.4 million** as of March 31, 2024, expected to be recognized over approximately **1.94 years**[75](index=75&type=chunk) [10. Commitments and Contingencies](index=18&type=section&id=10.%20Commitments%20and%20Contingencies) This note addresses the company's exposure to litigation claims and other commitments in the ordinary course of business - The Company is subject to litigation claims in the ordinary course of business but does not believe any will have a material adverse effect[76](index=76&type=chunk) [11. Income Taxes](index=18&type=section&id=11.%20Income%20Taxes) This note explains the company's income tax provision, primarily consisting of state income taxes due to a full valuation allowance - The Company's income tax provision consists solely of certain state income taxes due to a full valuation allowance position from accumulated losses[78](index=78&type=chunk) [12. Loss Per Share](index=19&type=section&id=12.%20Loss%20Per%20Share) This note details the anti-dilutive securities excluded from the calculation of diluted loss per share for the periods presented Anti-Dilutive Securities Excluded from Diluted Loss Per Share (March 31, 2024 vs. 2023) | Security Type | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Outstanding stock options | 16,103 | 17,569 | | Restricted stock units | 10,988 | 14,615 | | Employee stock purchase plan | 216 | 152 | | Total | 27,307 | 32,466 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of ThredUp's business, recent developments, and a detailed analysis of its financial performance for the three months ended March 31, 2024, compared to the same period in 2023, focusing on revenue, gross profit, operating expenses, and liquidity [Overview](index=20&type=section&id=Overview) This section provides a general description of ThredUp's business model, including its online resale platform and Resale-as-a-Service solution - ThredUp operates one of the world's largest online resale platforms for apparel, shoes, and accessories, aiming to inspire secondhand first and promote a sustainable fashion future[81](index=81&type=chunk) - The Company's proprietary operating platform supports a managed marketplace for buyers and sellers, offering items up to **90% off** estimated retail price and simplifying the selling process with Clean Out Kits[82](index=82&type=chunk) - ThredUp also offers a Resale-as-a-Service (RaaS) solution to brands and retailers, enabling them to provide closet clean-out services and resale shops to their customers[83](index=83&type=chunk) [Recent Business Developments](index=20&type=section&id=Recent%20Business%20Developments) This section highlights recent corporate actions, including a reorganization in March 2024 aimed at improving efficiencies and reducing costs - In March 2024, ThredUp reorganized certain corporate functions to improve efficiencies and reduce overhead costs, projecting an estimated annualized reduction of **$17 million** in operating expenses[84](index=84&type=chunk) [Overview of First Quarter Results](index=20&type=section&id=Overview%20of%20First%20Quarter%20Results) This section summarizes ThredUp's key financial and operating performance for the first quarter of 2024 compared to the prior year First Quarter 2024 Key Financial Highlights | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | YoY Change (%) | | :-------------------- | :-------------------- | :-------------------- | :------------- | | Total Revenue | $79.6 | $75.9 | 4.8% | | Gross Profit | $55.3 | $51.1 | 8.3% | | Gross Margin | 69.5% | 67.3% | +220 bps | | Net Loss | $(16.6) | $(19.8) | -16.4% | | Net Loss Margin | -20.8% | -26.1% | +530 bps | | Non-GAAP Adjusted EBITDA Loss | $(0.7) | $(6.6) | -88.9% | | Non-GAAP Adjusted EBITDA Loss Margin | -0.9% | -8.7% | +780 bps | First Quarter 2024 Key Operating Metrics | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | YoY Change (%) | | :------------- | :--------------------- | :--------------------- | :------------- | | Active Buyers | 1,729 | 1,668 | 3.7% | | Orders | 1,651 | 1,511 | 9.3% | [Key Financial and Operating Metrics](index=21&type=section&id=Key%20Financial%20and%20Operating%20Metrics) This section defines the key financial and operating metrics used to evaluate the company's performance, such as active buyers and orders - Active Buyers are defined as customers who have made at least one purchase in the last twelve months, identified by a unique email address[91](index=91&type=chunk) - Orders represent the total number of orders placed by buyers across marketplaces, net of cancellations[92](index=92&type=chunk) [Non-GAAP Financial Metrics](index=21&type=section&id=Non-GAAP%20Financial%20Metrics) This section explains the calculation and significance of non-GAAP financial measures, specifically Adjusted EBITDA loss, used by management - Non-GAAP Adjusted EBITDA loss is calculated by adjusting net loss to exclude stock-based compensation, depreciation and amortization, severance and other reorganization costs, interest expense, and provision for income taxes[93](index=93&type=chunk) - Non-GAAP Adjusted EBITDA loss improved significantly to **$(0.7) million** in Q1 2024 from **$(6.6) million** in Q1 2023, reflecting an **88.9% reduction** in loss[94](index=94&type=chunk) [Comparison of the Three Months Ended March 31, 2024 and 2023](index=22&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031,%202024%20and%202023) This section provides a detailed comparative analysis of the company's financial performance for the first quarter of 2024 versus 2023 [Revenue](index=22&type=section&id=Revenue) This section analyzes the changes in total revenue, distinguishing between consignment and product revenue streams Revenue Breakdown (Three Months Ended March 31, 2024 vs. 2023) | Revenue Type | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Consignment revenue | $61,225 | $46,479 | $14,746 | 31.7% | | Product revenue | $18,363 | $29,443 | $(11,080) | -37.6% | | Total revenue | $79,588 | $75,922 | $3,666 | 4.8% | - The increase in total revenue was primarily driven by a **31.7% increase in consignment revenue**, partially offset by a **37.6% decrease in product revenue**, as RaaS partners and European operations transitioned to the consignment model[95](index=95&type=chunk) [Gross Margin](index=22&type=section&id=Gross%20Margin) This section examines the factors influencing the overall gross margin and its components, including consignment and product gross margins Gross Margin Breakdown (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 | March 31, 2023 | Change (bps) | | :-------------------------- | :------------- | :------------- | :----------- | | Total Gross Margin | 69.5% | 67.3% | +220 | | Consignment Gross Margin | 82.8% | 80.2% | +260 | | Product Gross Margin | 25.1% | 47.0% | -2190 | - The overall gross margin increase was primarily due to a **260 basis point increase in consignment gross margin**, driven by lower shipping, labor, and packaging costs, and the transition of RaaS partners to the consignment model[98](index=98&type=chunk)[99](index=99&type=chunk) - Product gross margin decreased by **2,190 basis points**, mainly due to higher inventory costs in European operations, partially offset by decreased U.S. inventory and shipping costs[100](index=100&type=chunk) [Operations, Product, and Technology](index=23&type=section&id=Operations,%20Product,%20and%20Technology) This section discusses the changes in expenses related to operations, product development, and technology, including personnel and severance costs Operations, Product, and Technology Expenses (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Operations, product, and technology expenses | $41,051 | $38,347 | $2,704 | 7.1% | - The increase was driven by higher facilities, technology, and other allocated costs (**$2.4 million**), severance costs (**$1.2 million**) from the March 2024 reorganization, and increased inbound shipping (**$0.8 million**), partially offset by lower personnel-related costs (**$1.7 million**, including **$1.1 million** in stock-based compensation)[101](index=101&type=chunk) [Marketing](index=24&type=section&id=Marketing) This section analyzes the fluctuations in marketing expenses, primarily driven by advertising and personnel-related costs Marketing Expenses (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Marketing | $13,413 | $16,870 | $(3,457) | -20.5% | - The decrease was primarily due to reduced advertising costs (**$2.5 million**) and lower personnel-related costs (**$1.3 million**, including **$1.0 million** in stock-based compensation), partially offset by **$0.5 million** in severance costs[102](index=102&type=chunk) [Sales, General and Administrative](index=24&type=section&id=Sales,%20General%20and%20Administrative) This section details the changes in sales, general, and administrative expenses, including severance and personnel costs Sales, General and Administrative Expenses (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Sales, general, and administrative | $17,573 | $16,059 | $1,514 | 9.4% | - The increase was mainly due to **$1.3 million** in severance costs from the March 2024 reorganization and a **$0.5 million** increase in personnel-related costs, partially offset by a **$0.4 million** decrease in professional services[103](index=103&type=chunk) [Interest Expense](index=24&type=section&id=Interest%20Expense) This section explains the significant increase in interest expense, primarily due to the absence of capitalized interest in the current period Interest Expense (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :--------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Interest expense | $(677) | $(77) | $(600) | 779.2% | - The significant increase in interest expense was due to **$0.6 million** of capitalized interest expense in Q1 2023 related to distribution center build-out, with no capitalized interest in Q1 2024[104](index=104&type=chunk) [Other Income, Net](index=24&type=section&id=Other%20Income,%20Net) This section discusses the increase in other income, net, mainly attributed to higher interest income from marketable securities Other Income, Net (Three Months Ended March 31, 2024 vs. 2023) | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :---------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Other income, net | $845 | $476 | $369 | 77.5% | - The increase in other income was primarily due to higher interest income on marketable securities, benefiting from a higher interest rate environment[105](index=105&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's financial position, including cash, marketable securities, and available credit, to meet future obligations - As of March 31, 2024, ThredUp had **$62.5 million** in cash, cash equivalents, and short-term marketable securities, and **$22.5 million** available under its Term Loan facility[106](index=106&type=chunk) - The Company expects operating losses to continue in 2024 due to investments in business growth and infrastructure, but believes existing liquidity will be sufficient for at least the next 12 months[107](index=107&type=chunk) - Capital expenditures are expected to be limited in the remainder of 2024 following the completion of the first phase of its new Texas distribution center[108](index=108&type=chunk) [Cash Flows](index=25&type=section&id=Cash%20Flows) This section provides a summary and analysis of cash flows from operating, investing, and financing activities for the quarter Summary of Cash Flows (Three Months Ended March 31, 2024 vs. 2023) | Cash Flow Activity | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Operating activities | $1,393 | $(4,458) | $5,851 | | Investing activities | $(5,785) | $18,900 | $(24,685) | | Financing activities | $(1,480) | $(1,192) | $(288) | - Net cash provided by operating activities improved by **$5.851 million**, primarily due to a **$3.2 million decrease in net loss** and a **$7.0 million reduction in inventory** from the transition to a consignment model[110](index=110&type=chunk) - Net cash used in investing activities increased by **$24.7 million**, mainly due to a **$20.1 million decrease in marketable securities maturities** and an **$8.7 million increase in purchases of marketable securities**, partially offset by a **$4.1 million decrease in property and equipment purchases**[111](index=111&type=chunk) - Net cash used in financing activities increased by **$0.3 million**, driven by higher taxes paid on stock-based awards, partially offset by increased proceeds from stock-based awards[112](index=112&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that there have been no material changes to the company's critical accounting policies since the 2023 10-K filing - There have been no material changes to the Company's critical accounting policies since the 2023 10-K[114](index=114&type=chunk) [JOBS Act Accounting Election](index=26&type=section&id=JOBS%20Act%20Accounting%20Election) This section states the company's election to use the extended transition period for new accounting standards as an 'emerging growth company' - As an 'emerging growth company' under the JOBS Act, ThredUp has elected to use the extended transition period for adopting new or revised accounting standards[115](index=115&type=chunk) [New Accounting Pronouncements](index=26&type=section&id=New%20Accounting%20Pronouncements) This section outlines the company's assessment of recently issued accounting standards, including ASU 2023-07 and ASU 2023-09 - The Company is currently assessing the impact of ASU 2023-07 (Improvements to Reportable Segment Disclosures) and expects ASU 2023-09 (Improvements to Income Tax Disclosures) to result in enhanced income tax disclosures[37](index=37&type=chunk)[38](index=38&type=chunk)[116](index=116&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses ThredUp's exposure to market risks, including interest rate risk, inflation risk, and foreign currency exchange rate risk, and how these risks are managed [Interest Rate Risk](index=26&type=section&id=Interest%20Rate%20Risk) This section assesses the company's exposure to interest rate fluctuations on its cash, marketable securities, and variable-rate debt - As of March 31, 2024, the Company held **$50.1 million** in cash and cash equivalents and **$12.4 million** in marketable securities, primarily short- to intermediate-term instruments, limiting exposure to interest rate fluctuations[117](index=117&type=chunk) - The Term Loan bears variable interest rates, but a hypothetical **1% change** in interest rates would not materially impact annual interest expense[118](index=118&type=chunk) [Inflation Risk](index=28&type=section&id=Inflation%20Risk) This section discusses the impact of elevated inflation on the company's operating costs and customer purchasing power - Elevated inflation in the U.S. and overseas has increased costs (fuel, labor, processing, freight) and potentially impacted customer purchasing ability, negatively affecting gross margin and operating expenses[119](index=119&type=chunk) [Foreign Currency Exchange Rate Risk](index=28&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) This section addresses the company's exposure to foreign currency fluctuations, particularly from its European operations - The Company's European operations expose it to foreign currency fluctuations, with the Bulgarian lev being the most significant exposure[120](index=120&type=chunk) - Foreign currency translation adjustments resulted in an unfavorable impact of **$0.9 million** during the three months ended March 31, 2024[121](index=121&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and internal control over financial reporting, concluding on their effectiveness and acknowledging inherent limitations - As of March 31, 2024, management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective[123](index=123&type=chunk)[124](index=124&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended March 31, 2024[125](index=125&type=chunk) - Management acknowledges that all control systems have inherent limitations and can only provide reasonable, not absolute, assurance against errors or fraud[127](index=127&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, updated risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is not currently a party to any material pending legal proceedings - ThredUp is not involved in any material pending legal proceedings, though it may face routine claims in the ordinary course of business[130](index=130&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section supplements previously disclosed risk factors with new considerations regarding the Company's ability to successfully incorporate artificial intelligence and machine learning into its operations, and the potential disruptions and unfulfilled benefits of reorganization activities - New risk factors include the potential impact of successfully incorporating AI and ML into business operations, which could affect reputation, results, and incur additional costs[132](index=132&type=chunk)[133](index=133&type=chunk) - Risks associated with AI/ML include potential flaws in algorithms, cybersecurity incidents, intellectual property loss, and challenges in attracting skilled personnel[133](index=133&type=chunk)[134](index=134&type=chunk) - Reorganization activities, such as the March 2024 workforce reorganization, may not yield expected savings or benefits and could disrupt operations or lead to loss of key personnel[135](index=135&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities and details the application of net proceeds from the IPO - There were no unregistered sales of equity securities during the period[136](index=136&type=chunk) - Net proceeds from the IPO have been applied in accordance with the description in the final prospectus filed on March 3, 2021[140](index=140&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there are no defaults upon senior securities - The Company reported no defaults upon senior securities[136](index=136&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to ThredUp Inc[137](index=137&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by the CEO and Chief Legal Officer - CEO James Reinhart adopted a Rule 10b5-1 trading arrangement on March 15, 2024, for the sale of up to **692,152 shares** of Class A common stock until June 13, 2024[138](index=138&type=chunk) - Chief Legal Officer Alon Rotem also adopted a Rule 10b5-1 trading arrangement on March 15, 2024, for the sale of up to **310,135 shares** of Class A common stock until June 13, 2024[139](index=139&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL documents - The exhibit index includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and XBRL Instance Document (Exhibit 101.INS) among others[144](index=144&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report - The report was signed on behalf of ThredUp Inc. by Sean Sobers, Chief Financial Officer, on May 6, 2024[147](index=147&type=chunk)

Financial Performance - Revenue for Q1 2024 was $79.6 million, a 4.8% increase from $75.9 million in Q1 2023[5] - Gross profit for Q1 2024 was $55.3 million, reflecting an 8.3% growth compared to $51.1 million in Q1 2023[5] - GAAP net loss narrowed to $16.6 million from a net loss of $19.8 million in Q1 2023[5] - Adjusted EBITDA loss improved to $0.7 million, significantly better than the loss of $6.6 million in Q1 2023[5] - For Q2 2024, revenue is expected to be between $81.0 million and $83.0 million, with a gross margin forecasted between 71.0% and 73.0%[5] - For fiscal year 2024, revenue guidance is set between $328.0 million and $338.0 million, with a gross margin of 71.0% to 72.0%[5] Operational Metrics - Total Active Buyers reached 1.729 million, up 3.7% from 1.668 million in Q1 2023[5] - Total Orders increased to 1.651 million, a 9.3% rise from 1.511 million in Q1 2023[5] Cash and Assets - Cash and cash equivalents at the end of Q1 2024 totaled $67.9 million[5] - Cash and cash equivalents decreased to $50.1 million by March 31, 2024, down from $56.1 million on December 31, 2023[9] - Total current assets were $86.9 million as of March 31, 2024, a decline from $93.9 million on December 31, 2023[9] - Total cash, cash equivalents, and restricted cash at the end of September 30, 2023, was $74,575 thousand, up from $57,096 thousand at the beginning of the period[11] Liabilities and Equity - Total liabilities increased slightly to $150.7 million by March 31, 2024, compared to $146.1 million on December 31, 2023[9] - The accumulated deficit grew to $495.4 million by March 31, 2024, up from $478.9 million on December 31, 2023[9] - Total stockholders' equity decreased to $93.5 million as of March 31, 2024, down from $103.9 million on December 31, 2023[9] Expenses - Total operating expenses for Q2 2023 were $74.4 million, a 4.5% increase from Q1 2023[8] - Non-GAAP operating expenses as a percentage of revenue decreased to 80.2% in Q2 2023 from 81.5% in Q1 2023[8] - Marketing expenses for Q2 2023 were $18.6 million, a 10.5% increase from Q1 2023[8] - The company reported a total of $66.4 million in non-GAAP operating expenses for Q2 2023, reflecting a 5.5% increase from Q1 2023[8] Cash Flow - Net loss for the three months ended September 30, 2023, was $18,082 thousand, compared to a net loss of $18,760 thousand for the previous quarter[11] - Non-GAAP free cash flow for the three months ended September 30, 2023, was $(1,260) thousand, a significant improvement from $(16,994) thousand in the previous quarter[12] - Cash provided by operating activities was $223 thousand for the three months ended September 30, 2023, a recovery from $(10,381) thousand in the previous quarter[11] Strategic Initiatives - ThredUp has processed over 172 million unique secondhand items from 55,000 brands across 100 categories, highlighting its extensive market presence[13] - The company aims to reshape itself into an AI-powered resale company, indicating a strategic focus on technology and innovation[14] - ThredUp's Resale-as-a-Service (RaaS) model is expected to expand, with plans for future RaaS clients to enhance revenue streams[14] - The company anticipates trends in consumer demand and growth in the global and U.S. online resale markets to positively impact its long-term growth[14] - Adjusted EBITDA loss margin for the latest quarter reflects ongoing investments in technology and infrastructure[16] - The company is focused on reducing corporate expenses and headcount to improve financial performance moving forward[14]

ThredUp Inc. Exhibit 99.1 ThredUp Inc. Q4 2023 Earnings Call PRESENTATION: Operator^ Good afternoon. My name is Jenny and I will be your conference operator today. At this time, I would like to welcome everyone to the ThredUp Fourth Quarter 2023 Earnings Conference Call. (Operator Instructions) I would now like to hand the conference over to Lauren Frasch, Head of Investor Relations. Please go ahead. Lauren Frasch^ Good afternoon. Thank you for joining us on today's Conference Call to discuss ThredUp's four ...

Europe acquisition expands TAM opportunity and accelerates international strategy 2027 © THREDUP 16 Managed marketplace | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------------------------------------------------------------------| | | | | ● | Mass fashion \nU.S. resale is projected to grow to $42B in 20271 | | | | | ● | Mass market TAM is 6X larger than luxury2 | | | | | ● | Supply chain moat creates greater barriers to entry | Environmental Stewardship PRODUCT CIRCULARITY & END OF LI ...

ThredUp Inc. (NASDAQ:TDUP) Q4 2023 Earnings Conference Call March 4, 2024 4:30 PM ET Company Participants Lauren Frasch - Investor Relations James Reinhart - Chief Executive Officer and Co-Founder Sean Sobers - Chief Financial Officer Conference Call Participants Ike Boruchow - Wells Fargo Anna Andreeva - Needham & Company Tom Nikic - Wedbush Edward Yruma - Piper Sandler Alexandra Steiger - Goldman Sachs Dana Telsey - Telsey Group Operator Good afternoon. My name is Jeremy and I will be your conference oper ...

Growth and Financial Performance - The company relies on attracting new and retaining existing buyers to sustain growth, with a focus on appealing to consumers who typically purchase new retail items[56]. - The company has experienced growth in recent periods, but future growth rates may not be indicative of past performance, and there is a risk of not managing growth effectively[54]. - Revenue for the year ended December 31, 2023, was $322.0 million, representing a 12% increase from $288.4 million in 2022[72]. - Net losses for the years ended December 31, 2023, and 2022 were $71.2 million and $92.3 million, respectively, indicating a reduction in losses[73]. - The company anticipates significant increases in operating expenses as it expands operations and invests in marketing initiatives and technology[73]. - The company acknowledges the potential for significant fluctuations in quarterly results due to various external factors[75]. - Economic uncertainties and downturns could limit the company's growth potential and negatively affect financial results[100]. Operational Challenges - The company faces risks associated with sourcing, itemizing, warehousing, and shipping secondhand items, which could negatively impact results of operations[59]. - The company must improve distribution center operations and retain personnel to manage the complexities of processing secondhand items[87]. - Increased shipping costs have been observed due to volatility in global oil markets, impacting overall operational expenses[98]. - The company has experienced revenue reductions due to pricing strategies employed by national retailers, which may continue to affect revenue growth[92]. - The company relies on data science to predict buyer and seller preferences, and inaccuracies in these predictions could harm business operations[93]. - The company’s distribution centers are vulnerable to natural disasters, which could lead to significant disruptions and financial losses[94]. Market and Competitive Landscape - The competitive landscape for secondhand and resale items is rapidly changing, with established companies and new entrants posing significant challenges[63]. - The company may struggle to attract high-quality secondhand items if it fails to engage new sellers or retain existing ones, which could harm its financial condition[57]. - The company is investing heavily in advertising and marketing programs to drive growth in buyers and sellers, but effectiveness remains uncertain[80]. - Future profitability of RaaS offerings is uncertain, and the company may face challenges if retail clients experience downturns[86]. Regulatory and Compliance Risks - The company is subject to evolving privacy laws, such as the California Consumer Privacy Act, which imposes stringent data protection requirements and potential civil penalties[117]. - The company may face substantial penalties for non-compliance with GDPR, which can reach up to €20 million or 4% of worldwide turnover, whichever is greater[118]. - Non-compliance with privacy requirements could lead to investigations, enforcement actions, and civil suits, with damages ranging from $100 to $750 per consumer under CCPA[120]. - The company faces risks related to compliance with various laws and regulations, which could adversely affect demand for its marketplaces and increase operational costs[138]. Financial Structure and Capital - The dual-class structure of the company's common stock limits the influence of certain stockholders on corporate matters, potentially affecting stock price[54]. - The company has a loan and security agreement with Western Alliance Bank that imposes financial covenants and restrictions, potentially limiting operational flexibility[171]. - As of December 31, 2023, the company incurred $26.3 million of indebtedness under its loan agreement, with the ability to incur up to $48.8 million[173]. - The applicable interest rate on the company's indebtedness was 9.75% per annum as of December 31, 2023, which may increase due to rising interest rates[173]. - The company may require additional capital for growth, which could lead to dilution of existing stockholders if raised through equity financing[169]. Risks Related to Technology and Data - The company is investing in automation, artificial intelligence, and machine learning to enhance operational efficiency, but any failures in these technologies could disrupt operations[90]. - The company relies on third-party infrastructure services, including AWS and Shopify, which are vulnerable to disruptions that could affect service availability and user access[123]. - The company relies on third-party software and services for critical business functions, which could lead to increased costs and operational disruptions if these services are unavailable[134]. Human Resources and Internal Controls - The company identified a material weakness in internal control over financial reporting, which could impair the accuracy of consolidated financial statements[154]. - As of December 31, 2023, the company concluded that its internal control over financial reporting was effective after completing remediation measures[155]. - Labor-related matters, including potential unionization, could disrupt operations and increase labor costs[152]. - The requirements of being a public company may strain resources and divert management's attention, potentially affecting the ability to attract and retain qualified personnel[206].

Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $82 million, representing a 21% year-over-year increase [9][32] - Consolidated gross margin was 69%, a 350 basis point increase compared to the same quarter last year [34] - Adjusted EBITDA loss was $3.6 million, showing a significant improvement of 1,180 basis points year-over-year [36] - GAAP net loss was $18.1 million, compared to a loss of $23.7 million in the same quarter last year [36] - Cash and marketable securities decreased from $82.6 million to $80.2 million, with only $2.5 million used in Q3 [37] Business Line Data and Key Metrics Changes - Consignment revenue grew by 39% year-over-year, while product revenue decreased by 8% [32] - Active buyer count reached 1.8 million, up 4% year-over-year, marking the first growth in active buyers this year [9][33] - Orders increased by 11% year-over-year to 1.8 million [33] Market Data and Key Metrics Changes - The U.S. business achieved adjusted EBITDA breakeven and generated free cash flow for the first time in company history [10] - The European business is facing headwinds due to its non-consignment model, impacting consolidated margins [11] Company Strategy and Development Direction - The company aims to achieve full-year EBITDA breakeven in 2024 while focusing on long-term growth rather than short-term gains [12][20] - Strategic initiatives include enhancing customer satisfaction through the Thrift Promise and improving logistics efficiency [21][22] - The transition to a consignment model is expected to improve gross margins and expand the selection of high-quality supply in the long term [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing consumer uncertainty and a competitive retail environment but expressed confidence in the company's ability to navigate these challenges [13][20] - The company plans to maintain a promotional strategy to drive active buyer growth into 2024 [18][67] - Management expects the promotional environment to persist into 2024, impacting margins but prioritizing active buyer engagement [67][68] Other Important Information - ThredUp was recognized as one of TIME's 100 Most Influential Companies of 2023, highlighting its social impact and workplace culture [27] - The company is leveraging artificial intelligence to enhance its distribution network and product experience [26] Q&A Session Summary Question: What is the outlook for 2024 considering the headwinds? - Management indicated that the Q4 revenue guidance serves as a baseline for 2024, with expectations for increased consignment revenue [46][50] Question: How is the promotional environment affecting margins? - Management acknowledged a more promotional strategy in Q4 to maintain active buyer growth, which may impact margins [57][68] Question: What is the impact of new competitors in the resale market? - Management noted no significant incremental pressure from new resale players, focusing instead on maintaining active buyer engagement [67] Question: What are the expectations for return rates and their impact on EBITDA? - Management reported a 700 basis point improvement in return rates, contributing positively to EBITDA [94][95] Question: How is the company addressing the budget versus premium consumer segments? - Management confirmed a successful strategy in attracting more premium buyers, with no significant changes in budget shopper behavior [107][108]

Q3 2023 FY 2021 | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------------------|-------|-------|-------|-------|--------|--------|--------| | GAAP Operations, Product and Technology Expense | $33.8 | $38.3 | $39.8 | $40.4 | $101.4 | $128.1 | $155.6 | | Less SBC, Operations, Product and Technology Expense | $2.2 | $3.7 | $2.9 | $2.9 | $3.7 | $4.2 | $10.0 | | Non-GAAP Operations, Product and Technology Expense | $31.6 | $34.7 | $36.9 | $37.5 | $97.7 | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ 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: 001-40249 ThredUp Inc. (Exact name of registrant as specified in its charter) (State ...

ThredUp Inc. (NASDAQ:TDUP) Q2 2023 Earnings Conference Call August 8, 2023 4:30 PM ET Company Participants James Reinhart - Co Founder and Chief Executive Officer Sean Sobers - Chief Financial Officer Alon Rotem - Chief Legal Officer Conference Call Participants Ike Boruchow - Wells Fargo Trevor Young - Barclays Dylan Carden - William Blair Anna Andreeva - Needham & Company Ed Yruma - Piper Sandler Dana Telsey - Telsey Advisory Group Pierre Martinez - Goldman Sachs Ashley Owens - KeyBanc Rick Patel - Raymon ...