1stdibs.com(US:DIBS)2022-11-09 16:00Financial Performance - Gross Merchandise Value (GMV) for Q3 2022 was $99.2 million, a decrease of 9.1% from $109.2 million in Q3 2021[96] - Number of Orders in Q3 2022 was 35,235, down 5.7% from 37,355 in Q3 2021[96] - Active Buyers remained at 68,011 in Q3 2022, a decline of 5.2% from 71,783 in Q3 2021[96] - Net revenue for the three months ended September 30, 2022, was $22.7 million, a decrease of $2.8 million or 11% compared to $25.6 million for the same period in 2021[113] - Gross profit for the three months ended September 30, 2022, was $15.5 million, with a gross margin of 68.0%, down from $18.1 million and 70.6% in the prior year[115] - Net loss for the three months ended September 30, 2022, was $9.0 million, compared to a net loss of $6.6 million for the same period in 2021[110] - For the nine months ended September 30, 2022, net revenue was $73.9 million, a decrease of $1.9 million or 3% compared to $75.8 million in the prior year[119] - Gross profit for the nine months ended September 30, 2022, was $51.0 million, with a gross margin of 69.0%, down from $53.9 million and 71.2% in the prior year[120] Expenses and Losses - Adjusted EBITDA for Q3 2022 was $(5.5) million, compared to $(5.4) million in Q3 2021, indicating a slight increase in losses[96] - Operating expenses totaled $25.3 million for the three months ended September 30, 2022, compared to $25.0 million in the same period of 2021, resulting in a loss from operations of $9.9 million[110] - Sales and marketing expenses decreased by $1.8 million or 14% to $11.1 million for the three months ended September 30, 2022, primarily due to reduced discretionary spending[116] - Technology development expenses increased by $1.6 million or 33% to $6.4 million for the three months ended September 30, 2022, driven by higher stock-based compensation[116] - General and administrative expenses increased by 35% to $20.6 million for the nine months ended September 30, 2022, compared to $15.2 million in the prior year[120] - Provision for transaction losses was $1.2 million for the three months ended September 30, 2022, a decrease of 7% from $1.3 million in the prior year[117] - Provision for transaction losses was $4.4 million for the nine months ended September 30, 2022, a 17% increase from $3.8 million in the same period of 2021[122] Cash Flow and Financial Position - Net cash used in operating activities was $22.4 million for the nine months ended September 30, 2022, compared to $5.5 million in the same period of 2021[127] - Net cash provided by investing activities was $12.8 million for the nine months ended September 30, 2022, compared to a net cash used of $1.7 million in the prior year, primarily due to proceeds from the sale of Design Manager[129] - Net cash provided by financing activities decreased to $1.5 million for the nine months ended September 30, 2022, down from $119.6 million in the same period of 2021[130] - As of September 30, 2022, the company had cash and cash equivalents of $158.0 million and an accumulated deficit of $284.2 million[126] Business Operations - The company incurred approximately $0.6 million in non-recurring restructuring charges due to a workforce reduction of about 10%[90] - The sale of Design Manager on June 29, 2022, generated a net gain of $9.7 million for the company[91] - The company transitioned to a fully remote work environment due to COVID-19, impacting operational metrics and employee engagement[92] - Seller marketplace services revenue is derived from commissions ranging from 5% to 50% and processing fees of 3% on successful transactions[102] - The company operates an asset-light business model, facilitating shipping and fulfillment logistics without taking physical possession of items sold[89] - Future revenue is expected to exclude software services following the sale of Design Manager, which will impact overall revenue composition[102] Market and Economic Factors - The company's net revenue is mainly denominated in U.S. dollars, Euros, and British pounds, with no single customer accounting for more than 10% of net revenue for the three and nine months ended September 30, 2022[140] - A hypothetical 100 basis point change in interest rates would not materially affect the fair value of the company's cash and cash equivalents[136] - As of September 30, 2022, a 10% increase or decrease in current exchange rates would not have a material impact on the consolidated financial statements[139] - The company has maintained provisions for potential credit losses, which have been within expectations to date[140] - The effects of inflation on the company's results of operations and financial condition have been deemed immaterial[141]