ThredUp(TDUP) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This report contains forward-looking statements subject to substantial risks and uncertainties that may cause actual results to differ materially from expectations - This report contains forward-looking statements subject to substantial risks and uncertainties that may cause actual results to differ materially from expectations[10][11] - Forward-looking statements cover future financial performance, growth management, market competition, deployment of new technologies (e.g., AI/ML), economic trends, regulatory compliance, and the impact of the Remix divestiture[10][11][12] Company Overview and Disclosure Channels ThredUp Inc. operates a large online resale platform for apparel, shoes, and accessories, disclosing material information through its investor relations website, SEC filings, and other public channels - ThredUp Inc. operates one of the world's largest online resale platforms for apparel, shoes, and accessories[14] - Material information is disclosed through the ThredUp Investor Relations website (ir.thredup.com), SEC filings, press releases, public conference calls, and webcasts, with social media also used for communication[16] PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents ThredUp Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, financial instruments, debt, equity, and discontinued operations for the periods ended June 30, 2025, and December 31, 2024 Unaudited Condensed Consolidated Balance Sheets This section presents the company's unaudited condensed consolidated balance sheets, detailing assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs. Dec 31, 2024) (in thousands) | | :--------------------------------- | :-------------- | :---------------- | :------------------------ | | Cash and cash equivalents | $40,969 | $31,851 | +$9,118 | | Marketable securities | $6,606 | $12,325 | -$5,719 | | Total current assets | $60,742 | $56,922 | +$3,820 | | Total assets | $173,603 | $171,225 | +$2,378 | | Total current liabilities | $63,173 | $61,524 | +$1,649 | | Total liabilities | $113,396 | $114,924 | -$1,528 | | Total stockholders' equity | $60,207 | $56,301 | +$3,906 | Unaudited Condensed Consolidated Statements of Operations This section presents the company's unaudited condensed consolidated statements of operations, outlining revenue, expenses, and net loss for the reported periods Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Revenue | $77,657 | $66,717 | 16.4% | $148,948 | $131,250 | 13.5% | | Gross profit | $61,736 | $52,558 | 17.5% | $118,107 | $104,271 | 13.3% | | Operating loss | $(5,245) | $(9,605) | -45.3% | $(10,679) | $(22,000) | -51.4% | | Net loss | $(5,176) | $(13,954) | -62.9% | $(10,391) | $(30,508) | -65.9% | | Loss from continuing operations per share, basic and diluted | $(0.04) | $(0.09) | -55.6% | $(0.09) | $(0.20) | -55.0% | Unaudited Condensed Consolidated Statements of Comprehensive Loss This section presents the company's unaudited condensed consolidated statements of comprehensive loss, including net loss and other comprehensive income or loss components Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(5,176) | $(13,954) | $(10,391) | $(30,508) | | Foreign currency translation adjustments | $0 | $(231) | $0 | $(1,095) | | Unrealized gain (loss) on available-for-sale securities | $0 | $4 | $(5) | $(2) | | Total other comprehensive loss | $0 | $(227) | $(5) | $(1,097) | | Total comprehensive loss | $(5,176) | $(14,181) | $(10,396) | $(31,605) | Unaudited Condensed Consolidated Statements of Stockholders' Equity This section presents the company's unaudited condensed consolidated statements of stockholders' equity, detailing changes in capital, accumulated deficit, and other comprehensive income Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance as of Dec 31, 2024 (in thousands) | Balance as of June 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------------------- | :------------------------ | :----- | | Class A and B common stock | $11 | $12 | +$1 | | Additional paid-in capital | $612,148 | $626,449 | +$14,301 | | Accumulated other comprehensive income (loss) | $3 | $(2) | -$5 | | Accumulated deficit | $(555,861) | $(566,252) | -$10,391 | | Total stockholders' equity | $56,301 | $60,207 | +$3,906 | - Issuance of common stock from exercise of stock options, restricted stock units, and employee stock purchase plan contributed $6,854 thousand to additional paid-in capital for the three months ended June 30, 2025[27] - Stock-based compensation added $4,624 thousand to additional paid-in capital for the three months ended June 30, 2025[27] Unaudited Condensed Consolidated Statements of Cash Flows This section presents the company's unaudited condensed consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | | :----------------------------------------- | :------- | :------- | :------- | | Net cash provided by continuing operating activities | $6,087 | $253 | +$5,834 | | Net cash provided by (used in) continuing investing activities | $971 | $(4,127) | +$5,098 | | Net cash provided by (used in) continuing financing activities | $2,083 | $(2,662) | +$4,745 | | Net change in cash, cash equivalents and restricted cash from continuing operations | $9,141 | $(6,536) | +$15,677 | | Net change in cash, cash equivalents, and restricted cash | $9,141 | $(11,344) | +$20,485 | | Cash, cash equivalents, and restricted cash, end of period | $49,629 | $50,125 | -$496 | Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed notes explaining significant accounting policies, financial instruments, debt, equity, and discontinued operations relevant to the financial statements Note 1. Organization and Description of Business This note describes ThredUp Inc.'s formation and its primary business as an online resale platform for secondhand apparel, shoes, and accessories - ThredUp Inc. was formed in January 2009 and operates a large resale platform for primarily secondhand apparel, shoes, and accessories[31] Note 2. Significant Accounting Policies This note outlines the company's significant accounting policies, including revenue recognition, segment reporting, and the treatment of discontinued operations - The company reclassified consignment and product revenue into a single 'revenue' line item in Q1 2025, reflecting its transition to a primarily consignment model[36] - The European business, Remix, was divested on November 30, 2024, and is reported as a discontinued operation, with its results excluded from continuing operations for 2024 periods[37][82] - The company operates under one operating and reportable segment, with the CEO reviewing financial information on a consolidated basis[42] Revenue from Loyalty Reward Redemptions and Expirations (in thousands) | Period | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue from loyalty reward redemptions and expirations | $0 | $3,800 | $1,500 | $7,400 | Gift Card and Site Credit Liabilities & Revenue (in thousands) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | 3 Months Ended June 30, 2025 (Revenue, in thousands) | 3 Months Ended June 30, 2024 (Revenue, in thousands) | 6 Months Ended June 30, 2025 (Revenue, in thousands) | 6 Months Ended June 30, 2024 (Revenue, in thousands) | | :--------------------------------- | :------------ | :----------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Gift card liabilities | $6,900 | $8,500 | N/A (not material) | $300 | N/A (not material) | $600 | | Breakage revenue (gift cards) | N/A | N/A | $1,700 | $1,300 | $3,900 | $2,600 | | Customer site credits | $4,000 | $3,800 | $12,900 | $11,400 | $23,900 | $22,100 | Seller Payable and Revenue from Redemption (in thousands) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | 3 Months Ended June 30, 2025 (Revenue, in thousands) | 3 Months Ended June 30, 2024 (Revenue, in thousands) | 6 Months Ended June 30, 2025 (Revenue, in thousands) | 6 Months Ended June 30, 2024 (Revenue, in thousands) | | :--------------------------------- | :------------ | :----------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Seller payable | $16,300 | $15,100 | $7,400 | $6,300 | $13,500 | $11,400 | Note 3. Financial Instruments and Fair Value Measurements This note details the company's financial instruments and their fair value measurements, including cash equivalents and marketable securities Assets at Fair Value (June 30, 2025, in thousands) | Asset Category | Level 1 (in thousands) | Level 2 (in thousands) | Total (in thousands) | | :----------------------- | :------ | :------ | :------ | | Money market funds | $5,020 | $0 | $5,020 | | Commercial paper | $0 | $8,814 | $8,814 | | U.S. treasury securities | $0 | $1,840 | $1,840 | | Total cash equivalents | $5,020 | $10,654 | $15,674 | | U.S. treasury securities | $0 | $5,166 | $5,166 | | Commercial paper | $0 | $1,440 | $1,440 | | Total marketable securities | $0 | $6,606 | $6,606 | | Total assets at fair value | $5,020 | $17,260 | $22,280 | - As of June 30, 2025, all $6.6 million of marketable securities had a contractual maturity date of less than one year[59] Note 4. Property and Equipment, Net This note provides a breakdown of the company's property and equipment, net of accumulated depreciation and amortization Property and Equipment, Net (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :-------------- | :---------------- | | Machinery and equipment | $81,935 | $78,908 | | Leasehold improvements | $23,997 | $23,901 | | Internal-use software | $11,699 | $11,681 | | Computers and software | $7,740 | $7,396 | | Construction in progress | $6,365 | $5,583 | | Furniture and fixtures | $2,220 | $2,128 | | Total property and equipment, at cost | $133,956 | $129,598 | | Less: accumulated depreciation and amortization | $(66,302) | $(61,118) | | Property and equipment, net | $67,654 | $68,480 | - Depreciation and amortization expense was $3.2 million for the three months ended June 30, 2025 (down from $3.6 million in 2024) and $6.3 million for the six months ended June 30, 2025 (down from $7.4 million in 2024)[62] Note 5. Balance Sheet Components (Accrued and other current liabilities) This note details the components of accrued and other current liabilities on the company's balance sheet Accrued and Other Current Liabilities (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :-------------- | :---------------- | | Gift card and site credit liabilities | $10,868 | $12,234 | | Accrued vendor liabilities | $4,056 | $3,916 | | Allowance for returns | $3,533 | $3,052 | | Accrued compensation | $3,205 | $3,438 | | Accrued taxes | $2,711 | $2,608 | | Deferred revenue | $1,524 | $3,328 | | Accrued other | $1,037 | $1,280 | | Total | $26,934 | $29,856 | Note 6. Long-Term Debt This note provides information on the company's long-term debt, including the Term Loan's maturity, interest rate, and future principal payments - The Term Loan matures on July 14, 2027, with $22.5 million remaining available for equipment purchases as of June 30, 2025[65][114] - The effective interest rate for borrowings under the Term Loan was 9.71% as of June 30, 2025, and December 31, 2024[67] Term Loan Outstanding Amounts and Repayments (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Six Months Ended June 30, 2025 (Repaid, in thousands) | Six Months Ended June 30, 2024 (Repaid, in thousands) | | :--------------------------------- | :-------------- | :---------------- | :--------------------------------------- | :--------------------------------------- | | Amounts outstanding under Term Loan | $20,300 | $22,300 | $2,000 | $2,000 | Future Annual Principal Payments of Term Loan (as of June 30, 2025, in thousands) | Year | Amount (in thousands) | | :--------------------------------- | :----- | | 2025 (Remaining six months) | $2,000 | | 2026 | $4,000 | | 2027 | $14,333 | | Total principal payments | $20,333 | Note 7. Common Stock and Stockholders' Equity This note details the company's common stock structure, including authorized, issued, and outstanding shares for Class A and Class B common stock - Each Class A common stock share is entitled to one vote, while each Class B common stock share is entitled to ten votes and is convertible into one Class A share[71] Common Stock Shares (in thousands) | Class | Authorized (June 30, 2025, in thousands) | Issued and Outstanding (June 30, 2025, in thousands) | Issued and Outstanding (Dec 31, 2024, in thousands) | | :--------------------------------- | :------------------------- | :------------------------------------- | :------------------------------------ | | Class A common stock | 1,000,000 | 102,071 | 88,061 | | Class B common stock | 120,000 | 20,977 | 28,073 | | Total | 1,120,000 | 123,048 | 116,134 | Note 8. Stock-Based Compensation This note provides details on the company's stock-based compensation expense, including activity for stock options and restricted stock units Stock-Based Compensation Expense (in thousands) | Line Item | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operations, product, and technology | $2,306 | $2,821 | $4,951 | $5,334 | | Marketing | $112 | $107 | $226 | $259 | | Sales, general, and administrative | $2,082 | $3,791 | $4,843 | $8,037 | | Total stock-based compensation expense | $4,500 | $6,719 | $10,020 | $13,630 | Stock Options Activity (Six Months Ended June 30, 2025, in thousands) | Metric | Number of Options Outstanding (in thousands) | Weighted-Average Exercise Price Per Share | | :--------------------------------- | :---------------------------- | :-------------------------------------- | | Outstanding as of Dec 31, 2024 | 13,742 | $2.16 | | Exercised | (3,228) | $2.11 | | Forfeited or expired | (69) | $2.31 | | Outstanding as of June 30, 2025 | 10,445 | $2.18 | | Exercisable as of June 30, 2025 | 10,213 | $2.18 | Restricted Stock Units (RSUs) Activity (Six Months Ended June 30, 2025, in thousands) | Metric | Number of Shares (in thousands) | Weighted-Average Grant Date Fair Value Per Share | | :--------------------------------- | :--------------- | :--------------------------------------------- | | Outstanding and nonvested as of Dec 31, 2024 | 9,288 | $2.26 | | Granted | 5,128 | $2.93 | | Vested | (4,130) | $2.65 | | Forfeited | (192) | $2.31 | | Outstanding and nonvested as of June 30, 2025 | 10,094 | $2.44 | - Total unrecognized compensation cost related to nonvested RSUs was $23.1 million as of June 30, 2025, expected to be recognized over approximately two years[77] Note 9. Commitments and Contingencies This note discusses the company's commitments and contingencies, including potential litigation claims in the ordinary course of business - The company is subject to litigation claims in the ordinary course of business, but management does not believe they will have a material adverse effect[78] Note 10. Income Taxes This note explains the company's income tax provision, noting its full valuation allowance position due to accumulated losses - The company is in a full valuation allowance position due to losses incurred since inception, so the provision for income taxes consists solely of certain state income taxes[80] Note 11. Loss Per Share This note provides information on the calculation of loss per share, including anti-dilutive participating securities Anti-Dilutive Participating Securities (in thousands) | Security Type | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :--------------------------------- | :------------ | :------------ | | Stock options | 10,445 | 16,013 | | Restricted stock units | 10,094 | 13,215 | | Employee stock purchase plan | 9 | 32 | | Total | 20,548 | 29,260 | Note 12. Discontinued Operations This note details the financial results and impact of the company's divested European subsidiary, Remix, reported as a discontinued operation - The company completed the sale of its European subsidiary, Remix, on November 30, 2024, which is now reported as a discontinued operation[82] Remix Financial Results (Discontinued Operations, Six Months Ended June 30, 2024, in thousands) | Metric | Amount (in thousands) | | :--------------------------------- | :----- | | Revenue | $28,093 | | Cost of revenue | $20,918 | | Operating expenses | $16,180 | | Other income (expense), net | $79 | | Loss from discontinued operations | $(8,926) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on ThredUp's financial condition and results of operations for the three and six months ended June 30, 2025, highlighting revenue growth, improved profitability metrics, and changes in operating expenses, liquidity, and cash flows, all reflecting the company's focus on its core consignment model and operational efficiency Overview This overview describes ThredUp's business as a leading online resale platform and its proprietary operating platform supporting a managed marketplace and Resale-as-a-Service offering - ThredUp operates one of the world's largest online resale platforms for apparel, shoes, and accessories, aiming to inspire thinking secondhand first and promoting a sustainable fashion future[86] - The company's proprietary operating platform supports a managed marketplace and a Resale-as-a-Service (RaaS) offering for brands and retailers, making buying and selling secondhand items easy[87] Recent Business Developments This section highlights the divestiture of the European business (Remix) and its reclassification as a discontinued operation, impacting historical financial reporting - The divestiture of the European business (Remix) on November 30, 2024, led to its reporting as a discontinued operation, with all historical discussions in this section reflecting continuing operations[88] Overview of Second Quarter Results This section provides a high-level summary of the company's financial and operating performance for the second quarter, including revenue, gross profit, and key profitability metrics Second Quarter 2025 Financial Highlights (in millions, except percentages) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :--------------------------------- | :------ | :------ | :--------- | | Revenue | $77.7 | $66.7 | +16.4% | | Gross profit | $61.7 | $52.6 | +17.5% | | Gross margin | 79.5% | 78.8% | +70 bps | | Loss from continuing operations | $(5.2) | $(9.4) | -44.9% | | Loss from continuing operations margin | -6.7% | -14.1% | +740 bps | | Non-GAAP Adjusted EBITDA from continuing operations | $3.0 | $1.5 | +102.8% | | Non-GAAP Adjusted EBITDA from continuing operations margin | 3.9% | 2.2% | +170 bps | Second Quarter 2025 Operating Metrics (in millions, except percentages) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :--------------------------------- | :------ | :------ | :--------- | | Active Buyers | 1.5 | 1.3 | +16.5% | | Orders | 1.5 | 1.3 | +20.8% | Key Financial and Operating Metrics This section presents a detailed table of key financial and operating metrics, including active buyers, orders, revenue, gross margin, and Non-GAAP Adjusted EBITDA Key Financial and Operating Metrics (in thousands, except percentages) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Active Buyers (as of period end) | 1,465 | 1,257 | 16.5% | 1,465 | 1,257 | 16.5% | | Orders | 1,535 | 1,271 | 20.8% | 2,906 | 2,452 | 18.5% | | Revenue | $77,657 | $66,717 | 16.4% | $148,948 | $131,250 | 13.5% | | Gross profit | $61,736 | $52,558 | 17.5% | $118,107 | $104,271 | 13.3% | | Gross margin | 79.5% | 78.8% | 70 bps | 79.3% | 79.4% | (10) bps | | Loss from continuing operations | $(5,176) | $(9,392) | (44.9)% | $(10,391) | $(21,582) | (51.9)% | | Loss from continuing operations margin | (6.7)% | (14.1)% | 740 bps | (7.0)% | (16.4)% | 940 bps | | Non-GAAP Adjusted EBITDA from continuing operations | $3,017 | $1,488 | 102.8% | $6,825 | $3,376 | 102.2% | | Non-GAAP Adjusted EBITDA from continuing operations margin | 3.9% | 2.2% | 170 bps | 4.6% | 2.6% | 200 bps | - An Active Buyer is a ThredUp buyer who has made at least one purchase in the last twelve months, identified by a unique email address[95] - Non-GAAP Adjusted EBITDA from continuing operations is a non-GAAP measure used to evaluate operating performance, excluding stock-based compensation, depreciation, interest, taxes, gain on sale of non-marketable equity investment, and severance/reorganization costs[97] Comparison of the Three and Six Months Ended June 30, 2025 and 2024 This section provides a detailed comparative analysis of the company's financial performance for the three and six months ended June 30, 2025, versus 2024 Revenue This subsection analyzes revenue performance, highlighting growth drivers such as increased orders and changes in average order value Revenue Performance (in thousands, except percentages) | Period | 2025 (in thousands) | 2024 (in thousands) | Amount Change (in thousands) | % Change | | :--------------------------------- | :----- | :----- | :------------ | :------- | | 3 Months Ended June 30 | $77,657 | $66,717 | $10,940 | 16.4% | | 6 Months Ended June 30 | $148,948 | $131,250 | $17,698 | 13.5% | - Revenue growth for the three months was mainly driven by a 20.8% increase in Orders, partially offset by a 2.4% decrease in average order value[100] - Revenue growth for the six months was mainly driven by an 18.5% increase in Orders, partially offset by a modest 0.7% increase in average order value[101] Gross Margin This subsection examines gross margin performance, detailing changes in cost of revenue and their impact on profitability Gross Margin Performance (in thousands, except percentages) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------- | :--------------------------- | :----- | :--------------------------- | :--------------------------- | :------- | | Cost of revenue | $15,921 | $14,159 | +12.4% | $30,841 | $26,979 | +14.3% | | Gross profit | $61,736 | $52,558 | +17.5% | $118,107 | $104,271 | +13.3% | | Gross margin | 79.5% | 78.8% | +70 bps | 79.3% | 79.4% | (10) bps | - The increase in gross margin for the three months was primarily driven by lower cost of goods as a percentage of revenue[102] Operations, Product, and Technology Expenses This subsection analyzes trends in operations, product, and technology expenses, including personnel-related costs and inbound shipping Operations, Product, and Technology Expenses (in thousands, except percentages) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Expenses | $37,525 | $34,975 | 7.3% | $72,651 | $72,100 | 0.8% | | As a percentage of revenue | 48.3% | 52.4% | -410 bps | 48.8% | 54.9% | -610 bps | - Increase in expenses primarily due to a $3.1 million (3 months) and $3.6 million (6 months) increase in personnel-related costs from higher headcount at distribution centers[104][105] - Partially offset by decreases in inbound shipping costs ($0.9 million for 3 months, $1.2 million for 6 months) and severance costs ($1.0 million for 6 months)[104][105] Marketing Expenses This subsection details changes in marketing expenses, primarily driven by increases in advertising and professional services costs Marketing Expenses (in thousands, except percentages) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Expenses | $16,206 | $13,258 | 22.2% | $29,349 | $24,109 | 21.7% | | As a percentage of revenue | 20.9% | 19.9% | +100 bps | 19.7% | 18.4% | +130 bps | - Increase primarily due to a $2.1 million (3 months) and $4.6 million (6 months) increase in advertising costs[106][107] - Also, a $0.5 million (3 months) and $1.1 million (6 months) increase in professional services[106][107] Sales, General and Administrative Expenses This subsection analyzes the decrease in sales, general, and administrative expenses, primarily due to lower personnel-related costs and stock-based compensation Sales, General and Administrative Expenses (in thousands, except percentages) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Expenses | $13,250 | $13,930 | (4.9)% | $26,786 | $30,062 | (10.9)% | | As a percentage of revenue | 17.1% | 20.9% | -380 bps | 18.0% | 22.9% | -490 bps | - Decrease primarily due to a $1.5 million (3 months) and $5.0 million (6 months) decrease in personnel-related costs, including lower stock-based compensation and severance[108][109] Interest Expense This subsection discusses the decrease in interest expense, attributed to a lower interest rate environment and reduced outstanding debt balances Interest Expense (in thousands, except percentages) | Period | 2025 (in thousands) | 2024 (in thousands) | Amount Change (in thousands) | % Change | | :--------------------------------- | :----- | :----- | :------------ | :------- | | 3 Months Ended June 30 | $(496) | $(652) | $156 | (23.9)% | | 6 Months Ended June 30 | $(1,010) | $(1,329) | $319 | (24.0)% | - Decrease primarily due to a lower interest rate environment and reduced outstanding debt balances[110][111] Other Income, Net This subsection examines the decrease in other income, net, primarily due to lower interest income from declining interest rates and reduced average cash balances Other Income, Net (in thousands, except percentages) | Period | 2025 (in thousands) | 2024 (in thousands) | Amount Change (in thousands) | % Change | | :--------------------------------- | :----- | :----- | :------------ | :------- | | 3 Months Ended June 30 | $596 | $871 | $(275) | (31.6)% | | 6 Months Ended June 30 | $1,386 | $1,764 | $(378) | (21.4)% | - Decrease primarily due to lower interest income from a decline in interest rates and a reduced average cash balance[112][113] Liquidity and Capital Resources This section assesses the company's liquidity position, highlighting positive cash flows from operations and sufficient capital resources for future needs - The company generated positive cash flows from continuing operations of $6.1 million for the six months ended June 30, 2025, despite a history of negative cash flows[114] - As of June 30, 2025, the company had $56.2 million in cash, cash equivalents, restricted cash, and short-term marketable securities, with an additional $22.5 million available under the Term Loan[114] - Existing liquidity is expected to be sufficient for at least the next 12 months and beyond, with capital expenditures projected to remain modest for the remainder of 2025[115][116] Cash Flows This section provides a summary of cash flow activities, detailing changes in operating, investing, and financing cash flows for the reported periods Summary of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | Amount Change (in thousands) | % Change | | :----------------------------------------- | :------- | :------- | :------------ | :--------- | | Net cash provided by (used in) continuing operating activities | $6,087 | $253 | $5,834 | 2305.9% | | Net cash provided by (used in) continuing investing activities | $971 | $(4,127) | $5,098 | (123.5)% | | Net cash provided by (used in) continuing financing activities | $2,083 | $(2,662) | $4,745 | (178.2)% | - The $5.8 million increase in continuing operating cash inflows was primarily due to an $11.2 million decrease in loss from continuing operations[118] - The $5.1 million increase in investing cash inflows was primarily due to a $6.1 million decrease in purchases of marketable securities and a $2.2 million increase in sales/maturities of marketable securities[119] - The $4.7 million increase in financing cash inflows was primarily due to a $13.1 million increase in proceeds from issuance of stock-based awards, partially offset by an $8.3 million increase in payroll taxes[120] Critical Accounting Policies and Estimates This section confirms no material changes to the company's critical accounting policies since the previous fiscal year's report - There have been no material changes to the company's critical accounting policies since the 2024 10-K[122] JOBS Act Accounting Election This section explains the company's election to use the extended transition period for new accounting standards as an 'emerging growth company' under the JOBS Act - As an 'emerging growth company' under the JOBS Act, ThredUp has elected to use the extended transition period for adopting new accounting standards, which may affect comparability with other public companies[123] New Accounting Pronouncements This section discusses the company's evaluation of new accounting pronouncements, including ASU 2024-03 and ASU 2023-09 - No accounting pronouncements were adopted during the three and six months ended June 30, 2025[38][124] - The company is evaluating the potential impact of ASU 2024-03 (Expense Disaggregation Disclosures) and expects ASU 2023-09 (Income Tax Disclosures) to enhance disclosures[39][40] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, specifically interest rate risk and inflation risk, and their potential impact on financial performance - The company is exposed to interest rate risk due to variable-rate debt (Term Loan) and investments in cash equivalents/marketable securities, but does not anticipate material risks from fluctuations due to the short-term nature of investments[125][126] - Elevated inflation in the U.S. has negatively impacted gross margin and operating expenses, and could adversely affect customer purchasing ability, potentially impacting profitability if price increases cannot sufficiently offset rising costs[127] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and reported no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[129] - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[130] - Management acknowledges the inherent limitations of control systems, which can only provide reasonable, not absolute, assurance against errors and fraud[131] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not a party to any material pending legal proceedings, though it may be subject to ordinary course claims from time to time - The company is not a party to any material pending legal proceedings[134] Item 1A. Risk Factors This section refers to the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for a discussion of risk factors, stating that there have been no material changes to these risks - No material changes to the risk factors previously disclosed in the Fiscal 2024 10-K[135] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item states that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds to report[136] Item 3. Defaults Upon Senior Securities This item indicates that there were no defaults upon senior securities - No defaults upon senior securities[136] Item 4. Mine Safety Disclosures This item states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[137] Item 5. Other Information This item discloses that Chris Homer, Chief Operating Officer, adopted a Rule 10b5-1 trading arrangement on June 13, 2025, for the sale of up to 510,000 shares of Class A common stock until September 17, 2026, with no other such arrangements adopted, modified, or terminated by directors or officers during the quarter - Chris Homer, COO, adopted a Rule 10b5-1 trading arrangement on June 13, 2025, to sell up to 510,000 shares of Class A common stock by September 17, 2026[138] - No other Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the three months ended June 30, 2025[138] Item 6. Exhibits This section provides an index of exhibits filed with the Form 10-Q, including corporate governance documents, equity-related agreements, and various certifications and XBRL documents - The exhibit index includes corporate governance documents (Restated Certificate of Incorporation, Amended and Restated Bylaws), equity-related agreements (Form of Class A common stock certificate, Investors' Rights Agreement), and various certifications (CEO/CFO certifications under Sections 302 and 906 of Sarbanes-Oxley Act) and XBRL documents[142] Signatures This section confirms the report's official signing by the Chief Financial Officer on behalf of ThredUp Inc. on August 4, 2025 - The report is signed by Sean Sobers, Chief Financial Officer (Principal Financial and Accounting Officer), on behalf of ThredUp Inc. on August 4, 2025[146]