ThredUp(TDUP) - 2025 Q1 - Quarterly Results

Executive Summary & Outlook Q1 2025 Performance Highlights 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 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 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 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 Condensed Consolidated Statements of Operations 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] - Operating loss as a percentage of revenue improved from (19.2)% in Q1 2024 to (7.6)% in Q1 2025[6] Condensed Consolidated Balance Sheets 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] - Marketable securities decreased from $10,525 thousand to $5,719 thousand[10] - Accounts payable increased from $6,120 thousand to $13,000 thousand[10] Condensed Consolidated Statements of Cash Flows 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] - Net cash flow from investing activities was positive, primarily driven by the sale and maturity of marketable securities[11] Non-GAAP Financial Measures Adjusted EBITDA (Loss) Reconciliation 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] Non-GAAP Operating Expenses Reconciliation 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] - Severance and other restructuring charges in Q1 2025 were negligible compared to Q1 2024[9] Non-GAAP Free Cash Flow Reconciliation 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] Operational Metrics Active Buyers and Orders 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] Additional Information About ThredUp 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] - 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] - 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] Forward-Looking Statements 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] - These statements are subject to significant risks and uncertainties, and actual results may differ from expectations[15][16] - 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][17] Non-GAAP Financial Measures and Other Operating and Business Metrics Definitions 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] - 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] - 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]