1stdibs.com(DIBS) - 2024 Q1 - Quarterly Report

Part I - Financial Information Financial information including unaudited consolidated statements and management's discussion and analysis Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements and detailed notes for the period ended March 31, 2024 Condensed Consolidated Balance Sheets The balance sheet shows a slight decrease in total assets and stockholders' equity from December 31, 2023, to March 31, 2024, while total liabilities increased Condensed Consolidated Balance Sheets | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total assets | $179,468 | $180,815 | | Total liabilities | $48,452 | $46,527 | | Total stockholders' equity | $131,016 | $134,288 | | Cash and cash equivalents | $33,730 | $37,395 | | Short-term investments | $100,511 | $101,926 | | Treasury stock | $(6,411) | $(3,496) | Condensed Consolidated Statements of Operations For the three months ended March 31, 2024, the company reported a net loss of $3.303 million, a significant improvement from the $8.133 million net loss in the prior-year period Condensed Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net revenue | $22,062 | $22,178 | | Gross profit | $15,986 | $14,871 | | Total operating expenses | $21,338 | $25,052 | | Loss from operations | $(5,352) | $(10,181) | | Net loss | $(3,303) | $(8,133) | | Net loss per share—basic and diluted | $(0.08) | $(0.21) | Condensed Consolidated Statements of Comprehensive Loss The comprehensive loss for the three months ended March 31, 2024, was $3.511 million, an improvement from $8.149 million in the prior-year period Condensed Consolidated Statements of Comprehensive Loss | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net loss | $(3,303) | $(8,133) | | Foreign currency translation adjustment | $(16) | $19 | | Unrealized losses on short-term investments | $(192) | $(35) | | Comprehensive loss | $(3,511) | $(8,149) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased from $134.288 million at December 31, 2023, to $131.016 million at March 31, 2024, due to net loss and stock repurchases Condensed Consolidated Statements of Stockholders' Equity | Metric | December 31, 2023 (in thousands) | March 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $134,288 | $131,016 | | Common Stock Shares Outstanding | 39,915,136 | 39,732,251 | | Additional Paid-In Capital | $451,282 | $454,432 | | Accumulated Deficit | $(313,719) | $(317,022) | | Treasury Stock | $(3,496) | $(6,411) | - Repurchase of common stock amounted to $2.915 million for 552,885 shares during the three months ended March 31, 2024[20] Condensed Consolidated Statements of Cash Flows The company experienced a net decrease in cash, cash equivalents, and restricted cash of $3.645 million for the three months ended March 31, 2024 Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash used in operating activities | $(3,061) | $(2,801) | | Net cash provided by (used in) investing activities | $1,438 | $(62,760) | | Net cash (used in) provided by financing activities | $(1,966) | $31 | | Net decrease in cash, cash equivalents, and restricted cash | $(3,645) | $(65,417) | | Cash, cash equivalents, and restricted cash at end of period | $37,330 | $92,626 | Notes to Unaudited Condensed Consolidated Financial Statements Detailed disclosures for condensed financial statements, covering policies, instruments, revenue, and equity 1. Basis of Presentation and Summary of Significant Accounting Policies 1stDibs.com, Inc. operates as a leading online marketplace for luxury design products, with financial statements prepared in accordance with GAAP - 1stDibs is a leading online marketplace connecting design lovers with sellers of vintage & antique furniture, contemporary furniture, home décor, jewelry, watches, art, and fashion[25] Cash, Cash Equivalents, and Restricted Cash | (in thousands) | March 31, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Cash and cash equivalents | $33,730 | $87,791 | | Restricted cash, current | — | $1,500 | | Restricted cash, non-current | $3,600 | $3,335 | | Total cash, cash equivalents, and restricted cash | $37,330 | $92,626 | - The company is evaluating ASU 2023-07 (Segment Reporting) effective for annual report ending December 31, 2024, and ASU 2023-09 (Income Taxes) effective for annual report ending December 31, 2025[35][36] 2. Fair Value of Financial Instruments The company classifies financial assets and liabilities at fair value into a three-level hierarchy, with no Level 3 measurements as of March 31, 2024 - Fair value hierarchy prioritizes Level 1 (quoted prices in active markets) and Level 2 (observable inputs other than Level 1) over Level 3 (unobservable inputs)[38][39] Fair Value of Financial Assets (March 31, 2024, in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :---------------------- | :------ | :------ | :------ | :------ | | Cash equivalents | $6,108 | $7,468 | — | $13,576 | | Short-term investments | — | $100,511 | — | $100,511 | | Total | $6,108 | $107,979 | — | $114,087 | 3. Revenue Recognition Net revenue for Q1 2024 was $22.062 million, primarily from seller marketplace services, including transactions, subscriptions, and listing fees Revenue by Type | Revenue Type | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------- | :----------------------------------- | :----------------------------------- | | Seller marketplace services | $21,838 | $22,011 | | Other services | $224 | $167 | | Total net revenue | $22,062 | $22,178 | - Marketplace transaction fees accounted for 74% of net revenue in Q1 2024, and subscription fees accounted for 22%[109] 4. Short-Term Investments As of March 31, 2024, short-term investments totaled $100.511 million at fair value, primarily in U.S. Government agency securities and corporate notes Short-Term Investments (March 31, 2024, in thousands) | Type | Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | | :-------------------------- | :------------- | :-------------- | :-------------- | :--------- | | Commercial paper | $10,303 | $2 | $(4) | $10,301 | | Corporate notes | $16,565 | $3 | $(36) | $16,532 | | U.S. Treasury securities | $11,689 | — | $(25) | $11,664 | | U.S. Government agency securities | $62,049 | $13 | $(48) | $62,014 | | Total | $100,606 | $18 | $(113) | $100,511 | Short-Term Investments by Remaining Maturity (March 31, 2024, in thousands) | Maturity | Fair Value | | :-------------------------- | :--------- | | One year or less | $81,576 | | Greater than one year | $18,935 | | Total | $100,511 | 5. Property and Equipment, net Net property and equipment increased to $3.600 million as of March 31, 2024, with internal-use software and leasehold improvements as major components Property and Equipment, net (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Internal-use software | $19,881 | $19,541 | | Leasehold improvements | $3,729 | $3,605 | | Total property and equipment, gross | $25,352 | $25,765 | | Less: Accumulated depreciation and amortization | $(21,752) | $(22,381) | | Total property and equipment, net | $3,600 | $3,384 | - Depreciation and amortization expense was $0.5 million for the three months ended March 31, 2024, down from $0.9 million in the prior-year period[48] 6. Accrued Expenses Accrued expenses decreased to $9.525 million as of March 31, 2024, primarily due to changes in shipping, compensation & benefits, and sales & use taxes payable Accrued Expenses (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Shipping | $3,050 | $2,934 | | Compensation & benefits | $2,444 | $3,164 | | Sales & use taxes payable | $931 | $1,534 | | Allowance for transaction losses | $887 | $1,172 | | Total accrued expenses | $9,525 | $10,883 | 7. Leases Operating lease liabilities totaled $24.699 million as of March 31, 2024, with a new corporate headquarters lease commencing in January 2024 - As of March 31, 2024, operating lease right-of-use assets were $22.3 million, and total operating lease liabilities were $24.699 million[50][54] - The company entered into a new five-year lease agreement for its new corporate headquarters in New York City, commencing January 2024[52] Total Lease Expense, Net (in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease expense | $1,151 | $1,022 | | Sublease income | $(699) | — | | Total lease expense, net | $733 | $1,298 | 8. Other Current Liabilities Other current liabilities increased to $3.952 million as of March 31, 2024, primarily including sales and other non-income tax contingencies and buyer deposits Other Current Liabilities (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Sales and other non-income tax contingencies | $2,741 | $2,462 | | Buyer deposits | $387 | $377 | | Other | $824 | $779 | | Total other current liabilities | $3,952 | $3,618 | 9. Equity As of March 31, 2024, 39,732,251 shares of common stock were outstanding, with $13.6 million remaining for future repurchases under the Stock Repurchase Program - As of March 31, 2024, 400,000,000 shares of common stock were authorized, with 41,108,619 shares issued and 39,732,251 shares outstanding[14][57] Shares Reserved for Issuance (as of March 31, 2024) | Category | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Options to purchase common stock | 3,652,141 | 3,831,710 | | Restricted stock units outstanding | 5,762,061 | 3,400,489 | | Shares available for future grant under the 2021 Plan | 2,435,051 | 3,119,122 | | Shares available for future grant under the ESPP | 1,971,655 | 1,572,504 | | Total | 13,820,908 | 11,923,825 | - As of March 31, 2024, the company held 1,376,368 shares of treasury stock at a cost of $6.4 million, with approximately $13.6 million remaining available for future purchases under the repurchase program[61][125] 10. Stock-based compensation Stock-based compensation expense for Q1 2024 was $3.090 million, with $34.6 million in unrecognized compensation expense remaining under various plans - On January 1, 2024, the number of shares available for issuance under the 2021 Plan automatically increased by 1,995,756 shares, totaling 2,435,051 shares available for future grants as of March 31, 2024[68][69] Stock Option Activity (Three Months Ended March 31, 2024) | Metric | Number of Options | Weighted-Average Exercise Price | | :-------------------------- | :---------------- | :------------------------------ | | Outstanding as of Dec 31, 2023 | 3,831,710 | $6.97 | | Exercised | (172,274) | $4.07 | | Cancelled/Forfeited | (7,295) | $6.90 | | Outstanding as of Mar 31, 2024 | 3,652,141 | $7.10 | | Options exercisable as of Mar 31, 2024 | 2,826,255 | $6.67 | Restricted Stock Units Activity (Three Months Ended March 31, 2024) | Metric | Outstanding Restricted Stock Units | Weighted-Average Grant Date Fair Value | | :------------------------------- | :------------------------------------- | :------------------------------------- | | Outstanding as of Dec 31, 2023 | 3,400,489 | $5.40 | | Granted | 2,717,052 | $5.90 | | Vested | (325,550) | $5.92 | | Cancelled | (29,930) | $5.76 | | Outstanding as of Mar 31, 2024 | 5,762,061 | $5.60 | Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $80 | $149 | | Sales and marketing | $731 | $707 | | Technology development | $737 | $1,051 | | General and administrative | $1,542 | $1,199 | | Total | $3,090 | $3,106 | 11. Income Taxes The income tax provision for Q1 2024 was immaterial due to the net loss incurred and a full valuation allowance against net deferred tax assets - Income tax provision was immaterial for Q1 2024 and Q1 2023 due to net loss and a full valuation allowance against net deferred tax assets[80] 12. Net Loss Per Share Basic and diluted net loss per share for Q1 2024 was $(0.08), an improvement from $(0.21) in the prior-year period Net Loss Per Share (Three Months Ended March 31) | Metric | 2024 | 2023 | | :------------------------------------------ | :----- | :----- | | Net loss (in thousands) | $(3,303) | $(8,133) | | Weighted average common shares outstanding | 39,745,095 | 39,330,542 | | Net loss per share—basic and diluted | $(0.08) | $(0.21) | - Potentially dilutive securities (stock options and restricted stock units) totaling 9,414,202 shares as of March 31, 2024, were excluded from diluted EPS calculation due to their anti-dilutive effect[81] 13. Commitments and Contingencies As of March 31, 2024, the company had $32.2 million in non-cancelable contractual commitments and is subject to routine legal proceedings Contractual Obligations (as of March 31, 2024, in thousands) | Fiscal Year Ending December 31, | Lease Obligations | Other Obligations | Total Obligations | | :------------------------------ | :---------------- | :---------------- | :---------------- | | 2024 (remaining) | $3,605 | $1,484 | $5,089 | | 2025 | $5,380 | $1,055 | $6,435 | | 2026 | $5,263 | $476 | $5,739 | | 2027 | $5,263 | $118 | $5,381 | | 2028 | $5,263 | $19 | $5,282 | | Thereafter | $4,292 | — | $4,292 | | Total | $29,066 | $3,152 | $32,218 | - The company does not believe it is party to any pending legal proceedings likely to have a material effect on its business, financial condition, or results of operations[85] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and results for Q1 2024, highlighting improved net loss and Adjusted EBITDA Company Overview 1stDibs is a leading online marketplace for luxury design products, operating an asset-light e-commerce model connecting buyers with vetted sellers - 1stDibs is a leading online marketplace for luxury design products, including furniture, home décor, jewelry, watches, art, and fashion[89] - The company operates an asset-light business model, enabling shipping and fulfillment logistics without taking physical possession of items[90] Key Operating and Financial Metrics GMV and Active Buyers decreased in Q1 2024, while Adjusted EBITDA significantly improved, indicating better operational efficiency Key Operating and Financial Metrics (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :-------------------------- | :----- | :----- | | GMV | $91,686 | $97,058 | | Number of Orders | 35,315 | 35,385 | | Active Buyers | 60,666 | 66,400 | | Adjusted EBITDA (unaudited) | $(1,794) | $(5,254) | - GMV is defined as the total dollar value from items sold by sellers through 1stDibs, minus cancellations, excluding shipping and sales taxes[94] - Active Buyers are defined as buyers who have made at least one purchase through the online marketplace during the 12 months ended on the last day of the period presented, net of cancellations[96] Components of Results of Operations Net revenue primarily consists of seller marketplace services and other services, while operating expenses are categorized into sales and marketing, technology development, general and administrative, and provision for transaction losses - Net revenue is primarily derived from seller marketplace services (marketplace transactions, subscriptions, and listing fees) and other services (advertising)[98] - Cost of revenue includes payment processor fees, hosting expenses, payroll for operations personnel, and amortization of capitalized internal-use software[99] - Operating expenses include sales and marketing, technology development, general and administrative, and provision for transaction losses, with detailed breakdowns of their components[102][103][104][105] Results of Operations The company's net loss significantly decreased from $8.133 million in Q1 2023 to $3.303 million in Q1 2024, driven by reduced operating expenses Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net revenue | $22,062 | $22,178 | | Gross profit | $15,986 | $14,871 | | Total operating expenses | $21,338 | $25,052 | | Loss from operations | $(5,352) | $(10,181) | | Net loss | $(3,303) | $(8,133) | Results of Operations as a Percentage of Net Revenue | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net revenue | 100 % | 100 % | | Cost of revenue | 28 % | 33 % | | Gross profit | 72 % | 67 % | | Total operating expenses | 97 % | 113 % | | Loss from operations | (25)% | (46)% | | Net loss | (15)% | (37)% | Comparison of the Three Months Ended March 31, 2024 and 2023 This section details period-over-period changes in net revenue, cost of revenue, gross profit, and operating expenses, showing a narrower net loss Net Revenue Net revenue remained relatively flat at $22.1 million for Q1 2024, a 1% decrease year-over-year, despite a 6% decline in GMV Net Revenue | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | Net revenue | $22,062 | $22,178 | $(116) | (1)% | - Net revenue declined by 1% despite a 6% decline in GMV, due to strategic initiatives to improve take rates, including commission re-tiering[108] Cost of Revenue Cost of revenue decreased by $1.2 million, or 17%, to $6.1 million in Q1 2024, primarily due to lower depreciation, salaries, and shipping expenses Cost of Revenue | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | Cost of revenue | $6,076 | $7,307 | $(1,231) | (17)% | - Key drivers for the decrease in cost of revenue include a $0.5 million decrease in depreciation (due to NFT platform discontinuation), a $0.4 million decrease in salaries and benefits (due to headcount reduction), and a $0.3 million decrease in shipping expenses[110] Gross Profit and Gross Margin Gross profit increased to $16.0 million, and gross margin improved to 72.5% in Q1 2024, driven by cost savings and take rate improvements - Gross profit increased to $16.0 million (from $14.9 million), and gross margin improved to 72.5% (from 67.1%) in Q1 2024[111] - The increase was primarily driven by cost savings initiatives in the second half of 2023 and initiatives to improve take rates and net revenue[111] Operating Expenses All categories of operating expenses saw decreases in Q1 2024 compared to Q1 2023, reflecting the company's cost-saving measures and headcount reductions Sales and Marketing Sales and marketing expense decreased by $0.6 million, or 6%, to $9.2 million in Q1 2024, primarily due to a reduction in salaries and benefits Sales and Marketing | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | Sales and marketing | $9,169 | $9,805 | $(636) | (6)% | - The decrease was primarily driven by a $0.7 million decrease in salaries and benefits due to headcount reductions in June 2023[112] Technology Development Technology development expense decreased by $1.1 million, or 18%, to $4.7 million in Q1 2024, mainly due to lower salaries and stock-based compensation Technology Development | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | Technology development | $4,745 | $5,795 | $(1,050) | (18)% | - The decrease was primarily driven by an $0.8 million decrease in salaries and benefits and a $0.3 million decrease in stock-based compensation expense, both due to headcount reductions in June 2023[113] General and Administrative General and administrative expense decreased by $1.1 million, or 13%, to $7.0 million in Q1 2024, mainly due to lower professional fees and sublease income General and Administrative | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | General and administrative | $7,010 | $8,088 | $(1,078) | (13)% | - Key drivers for the decrease include a $0.8 million decrease in professional fees, $0.7 million in sublease income, and a $0.5 million decrease from lower vendor rates[114] - These were partially offset by a $0.3 million increase in salaries and benefits and a $0.3 million increase in stock-based compensation[114][115] Provision for Transaction Losses Provision for transaction losses significantly decreased by $1.0 million, or 70%, to $0.4 million in Q1 2024, due to new policies and decreased GMV Provision for Transaction Losses | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | Provision for transaction losses | $414 | $1,364 | $(950) | (70)% | - The decrease was primarily driven by a reduction in damage claims due to new policies and a decrease in GMV[116] Other Income, Net Total other income, net, remained stable at approximately $2.0 million for both Q1 2024 and Q1 2023, primarily from interest income Other Income, Net | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | $ Change | % Change | | :-------------------------- | :----------------------------------- | :----------------------------------- | :------- | :------- | | Total other income, net | $2,049 | $2,048 | $1 | —% | - Other income, net, primarily relates to interest income on cash, cash equivalents, and short-term investments[117] Non-GAAP Financial Measures Adjusted EBITDA, a non-GAAP measure, improved significantly to $(1.794) million in Q1 2024 from $(5.254) million in Q1 2023, reflecting better operational efficiency - Adjusted EBITDA is defined as net loss excluding depreciation and amortization, stock-based compensation expense, other income, net, provision for income taxes, gain on sale of business, and strategic alternative expenses[97][121] Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(3,303) | $(8,133) | | Depreciation and amortization | $462 | $939 | | Stock-based compensation expense | $3,090 | $3,106 | | Other income, net | $(2,049) | $(2,048) | | Strategic alternative expenses | $6 | $882 | | Adjusted EBITDA | $(1,794) | $(5,254) | Liquidity and Capital Resources As of March 31, 2024, the company had $134.2 million in cash, cash equivalents, and short-term investments, sufficient to fund operations for at least 12 months - As of March 31, 2024, the company had $134.2 million in cash, cash equivalents, and short-term investments, and an accumulated deficit of $317.0 million[122] - Net cash used in operating activities was $3.1 million for the three months ended March 31, 2024[122] - Management believes existing cash, cash equivalents, and short-term investments will be sufficient to fund operations and capital expenditure requirements through at least the next 12 months[123] Stock Repurchase Program The Board of Directors authorized a $20.0 million Stock Repurchase Program in August 2023, with $13.6 million remaining after Q1 2024 repurchases - A Stock Repurchase Program of up to $20.0 million was authorized in August 2023[125] - During Q1 2024, 552,885 shares were purchased for a total cost of $2.9 million, leaving approximately $13.6 million available for future purchases[125] Cash Flows The company's cash flows showed a net decrease of $3.645 million in Q1 2024, with operating activities using $3.061 million Cash Flows from Operating Activities Net cash used in operating activities was $3.061 million in Q1 2024, primarily due to changes in accounts payable and accrued expenses - Net cash used in operating activities was $3.061 million in Q1 2024, primarily driven by a $2.9 million change in accounts payable and accrued expenses due to timing of payments, including annual bonuses[127] Cash Flows from Investing Activities Net cash provided by investing activities was $1.438 million in Q1 2024, a significant shift from the prior-year period, mainly due to short-term investment maturities - Net cash provided by investing activities was $1.438 million in Q1 2024, driven by $31.6 million maturities of short-term investments partially offset by $29.5 million purchases[129] Cash Flows from Financing Activities Net cash used in financing activities was $1.966 million in Q1 2024, primarily due to common stock repurchases, partially offset by stock option exercises - Net cash used in financing activities was $1.966 million in Q1 2024, primarily due to $2.7 million in common stock repurchases, partially offset by $0.7 million in proceeds from stock option exercises[130] Contractual Obligations There were no material changes in contractual obligations as of March 31, 2024, compared to those disclosed in the company's Form 10-K - No material changes in contractual obligations as of March 31, 2024, compared to the Form 10-K[131] Recent Accounting Pronouncements Information regarding recently issued accounting pronouncements that may impact the company's financial statements is detailed in Note 1 - Refer to Note 1, 'Basis of Presentation and Summary of Significant Accounting Policies,' for details on recently issued accounting pronouncements[132] Emerging Growth Company The company is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards - The company is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards[133] Critical Accounting Policies and Estimates There have been no significant changes to the company's critical accounting policies and estimates as disclosed in its Annual Report on Form 10-K - No significant changes to critical accounting policies and estimates from the Form 10-K[135] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the company's exposure to market risks, including interest rate, foreign currency, credit, and inflation risks Interest Rate Sensitivity As of March 31, 2024, the company held $134.2 million in cash, cash equivalents, and short-term investments, sensitive to interest rate changes - As of March 31, 2024, the company had $134.2 million in cash, cash equivalents, and short-term investments[137] - A hypothetical 100 basis point increase or decrease in interest rates would result in an approximate $0.8 million increase or decrease in cash, cash equivalents, and short-term investments[137] Foreign Currency Risk The company's revenue is denominated in U.S. dollars, Euros, and British pounds, with a hypothetical 10% adverse change potentially decreasing net revenue by $0.8 million - Net revenue is primarily denominated in U.S. dollars, Euros, and British pounds[139] - A hypothetical adverse 10% change in current exchange rates could result in no more than a $0.8 million decrease in net revenue for the three months ended March 31, 2024[139] Credit Risk The company's credit risk on accounts receivable is mitigated by upfront payment requirements and a diverse customer base - Credit risk on accounts receivable is mitigated by upfront payments and a diverse customer base[140] - No single customer accounted for more than 10% of net revenue for the three months ended March 31, 2024 and 2023[140] Inflation Risk Macroeconomic factors, including inflation, have negatively impacted GMV and net revenue, posing a risk to offsetting higher costs - Inflation and macroeconomic factors have negatively impacted GMV and net revenue[141] - There is a risk that the company may not be able to fully offset higher costs through net revenue and GMV increases if subject to inflationary pressures[141] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures The CEO and CFO evaluated the effectiveness of disclosure controls and procedures as of March 31, 2024, concluding they were effective - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2024, at the reasonable assurance level[142] Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting were identified during the three months ended March 31, 2024 - No material changes in internal control over financial reporting were identified during the three months ended March 31, 2024[145] Inherent Limitations on Effectiveness of Controls Management acknowledges that control systems provide reasonable, not absolute, assurance and are subject to inherent limitations - Control systems provide reasonable, not absolute, assurance and are subject to inherent limitations, including faulty judgments, simple errors, circumvention, or management override[146] Part II - Other Information This section provides information on legal proceedings, risk factors, equity security sales, and exhibits Item 1. Legal Proceedings The company is involved in routine legal proceedings and claims, none of which are expected to have a material adverse effect on its operations - The company is subject to routine litigation and claims, but does not believe any pending legal proceedings are likely to have a material adverse effect[148] Item 1A. Risk Factors There have been no material changes to the risk factors disclosed in the company's 2023 Annual Report on Form 10-K - No material changes to the risk factors disclosed in the 2023 Annual Report on Form 10-K[149] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities or proceeds, detailing the company's stock repurchase program Recent Sales of Unregistered Equity Securities There were no unregistered sales of equity securities during the period covered by this report - No unregistered sales of equity securities occurred during the reporting period[151] Use of Proceeds There were no proceeds to report in this section - No proceeds to report[152] Issuer Purchases of Equity Securities The company repurchased 552,885 shares of common stock for $2.9 million during Q1 2024 under its $20.0 million Stock Repurchase Program - The Board authorized a $20.0 million Stock Repurchase Program in August 2023[153] Monthly Share Repurchases (Three Months Ended March 31, 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value Remaining (in thousands) | | :-------------------------- | :------------------------------- | :--------------------------- | :---------------------------------------------- | | January 1 - January 31, 2024 | 169,840 | $4.91 | $15,670 | | February 1 - February 29, 2024 | 136,558 | $4.78 | $15,010 | | March 1 - March 31, 2024 | 246,487 | $5.79 | $13,580 | | Total | 552,885 | | | Item 6. Exhibits Index This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including organizational documents and certifications - The exhibit index includes the Restated Certificate of Incorporation, Amended and Restated Bylaws, Specimen Common Stock Certificate, Description of Capital Stock, various certifications (302 and 906), and Inline XBRL documents[159] Signatures The report is duly signed on behalf of 1STDIBS.COM, INC. by Thomas Etergino, Chief Financial Officer, on May 9, 2024 - The report was signed by Thomas Etergino, Chief Financial Officer, on May 9, 2024[162]