Financial Data and Key Metrics Changes - Revenue for Q1 2025 totaled $71.3 million, representing a year-over-year increase of 10.5% [25] - Adjusted EBITDA was $3.8 million, or 5.3% of revenue, doubling the adjusted EBITDA dollars compared to the previous year [26] - Gross margin was 79.1%, a decrease of 100 basis points year-over-year due to higher incentives for new buyers [26] - Active buyers increased by 5.7% year-over-year, totaling 1.4 million for the trailing twelve months [25] Business Line Data and Key Metrics Changes - New buyer acquisition surged by 95% year-over-year, marking the strongest quarter for new buyer acquisition in the company's history [25] - Orders increased by 16.1% year-over-year, reaching 1.4 million [26] - Premium items processed contributed 60% higher margins compared to regular items [18] Market Data and Key Metrics Changes - The company noted that the closure of the de minimis loophole and potential tariff impacts could enhance the value proposition for used clothing [11][12] - The advertising market has become less competitive, allowing for potentially lower customer acquisition costs [12] Company Strategy and Development Direction - The company aims to maintain gross margin and bottom line efficiency while reinvesting in acquiring new buyers and sellers [9] - ThredUP is focusing on enhancing its AI-driven product experience and expanding its resale as a service (RAS) strategy [19][21] - The company is open-sourcing its technology to help brands build scalable circularity business models [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's momentum, citing strong new buyer acquisition and operational improvements [37] - The company remains cautious about the consumer environment but is optimistic about revenue growth for the remainder of the year [28] - Management highlighted that the business was accelerating before recent trade disruptions, indicating a fundamentally improving growth profile [12] Other Important Information - The company generated $2.6 million in cash during the quarter, ending with $55.4 million in cash and securities [27] - Free cash flow reached a record level of $3.9 million for the quarter [27] Q&A Session Summary Question: What is driving the buyer and revenue outperformance? - Management noted that the momentum seen in Q4 continued into Q1, driven by new buyer acquisition and supply-side improvements [36] Question: Are there expectations for Q3 to accelerate from Q2 in revenue? - Management confirmed expectations for revenue acceleration from Q2 to Q3, with Q3 projected to be the high point for EBITDA margin [40] Question: What demographics are being targeted for new customers? - Management indicated that new customers are primarily middle to upper-income individuals, consistent with trends observed post-pandemic [46] Question: How is the marketing spend expected to maintain momentum? - Management plans to continue spending on marketing as long as paybacks remain attractive, with recent trends indicating strong customer acquisition [47] Question: What trends are observed on the seller side of the business? - Management reported good momentum in the seller side, particularly in the consignment premium offering, which has better contribution margins [77] Question: Is there any pricing pressure observed? - Management clarified that the decline in average revenue per order is due to the mix of new buyers rather than pricing pressure [78]

Financial Data and Key Metrics Changes - For Q1 2025, revenue totaled $71.3 million, an increase of 10.5% year over year [23] - Adjusted EBITDA was $3.8 million, or 5.3% of revenue, doubling adjusted EBITDA dollars versus last year [25] - Gross margin was 79.1%, a 100 basis point decrease compared to the same quarter last year [25] - Active buyers grew to 1.4 million, up 5.7% year over year, with orders up 16.1% [24] Business Line Data and Key Metrics Changes - New buyer acquisition increased by 95% year over year, marking the strongest quarter for new buyer acquisition in the company's history [24] - Premium items sold contributed margins that are 60% higher than regular items sold, indicating a shift towards higher-value goods [17] Market Data and Key Metrics Changes - The company noted that the closure of the de minimis loophole and potential tariff impacts could enhance the value proposition for used clothing [9][10] - The advertising market is becoming less competitive, which may lead to lower customer acquisition costs [10] Company Strategy and Development Direction - The company aims to maintain gross margin and bottom line efficiency while reinvesting in acquiring new buyers and sellers [6] - The strategy includes expanding the seller experience and optimizing the marketplace to drive growth [16] - The company is focusing on AI-driven product experiences to enhance customer engagement and conversion rates [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's ability to sustain growth despite macroeconomic uncertainties [36] - The company is cautious but optimistic about the consumer environment, expecting continued positive trends [27] - Management highlighted that the business was accelerating before recent trade disruptions, indicating resilience [10] Other Important Information - The company generated $2.6 million in cash during Q1, with free cash flow reaching a record level of $3.9 million [26] - The company plans to raise its revenue guidance for the full year of 2025, reflecting positive trends observed in Q1 [27] Q&A Session Summary Question: What is driving the buyer and revenue outperformance? - Management noted that the momentum seen in Q4 continued into Q1, driven by new buyer acquisition and supply-side improvements [36] Question: Are there expectations for Q3 to accelerate from Q2 in revenue? - Management confirmed that they expect revenue to accelerate from Q2 to Q3, with Q3 projected to be the high point for EBITDA margin [39] Question: What demographics are being targeted for new customers? - The company is attracting slightly more middle to upper-income customers, consistent with trends observed post-pandemic [46] Question: How does the company plan to maintain marketing momentum? - Management indicated that they will continue to invest in marketing as long as paybacks remain attractive, benefiting from reduced competition in advertising [47] Question: What trends are seen on the seller side of the business? - The company is experiencing good momentum in the seller side, particularly in the consignment premium offering, which has better contribution margins [78] Question: Is there any pricing pressure observed? - Management clarified that the decline in average revenue per order is due to the mix of new buyers versus existing buyers, not due to pricing pressure [79]

Part I. Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 unaudited financial statements show revenue growth to **$71.3 million**, a reduced net loss of **$5.2 million**, and stable assets, following the late 2024 divestiture of its European business [Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $41,057 | $31,851 | | Total current assets | $60,460 | $56,922 | | Total assets | $172,500 | $171,225 | | Total current liabilities | $65,605 | $61,524 | | Total liabilities | $116,417 | $114,924 | | Total stockholders' equity | $56,083 | $56,301 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations (in thousands) | Statement of Operations (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $71,291 | $64,533 | | Gross profit | $56,371 | $51,713 | | Operating loss | $(5,434) | $(12,395) | | Loss from continuing operations | $(5,215) | $(12,190) | | Loss from discontinued operations, net of tax | — | $(4,364) | | Net loss | $(5,215) | $(16,554) | | Total loss per share, basic and diluted | $(0.04) | $(0.15) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by continuing operating activities | $5,743 | $3,288 | | Net cash provided by (used in) continuing investing activities | $5,075 | $(5,291) | | Net cash used in continuing financing activities | $(1,589) | $(1,480) | | Net change in cash, cash equivalents, and restricted cash | $9,229 | $(5,987) | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Remix divestiture as a discontinued operation, reclassification of revenue reporting, termination of the customer loyalty program, and compliance with debt covenants - In Q4 2024, the company divested its European business, **Remix**, now reported as a discontinued operation, with all continuing operations discussions excluding Remix results[36](index=36&type=chunk)[82](index=82&type=chunk)[88](index=88&type=chunk) - Beginning in Q1 2025, the company combined consignment and product revenue into a single 'revenue' line item due to the shift to a primarily consignment model[35](index=35&type=chunk)[97](index=97&type=chunk) - The customer loyalty program was discontinued as of **March 31, 2025**, with revenue from this program at **$1.5 million** in Q1 2025, down from **$3.7 million** in Q1 2024[46](index=46&type=chunk) - As of **March 31, 2025**, the company had **$21.3 million** outstanding under its Term Loan and was in compliance with all debt covenants[65](index=65&type=chunk)[67](index=67&type=chunk) [Management's Discussion and Analysis (MD&A)](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights Q1 revenue growth to **$71.3 million**, positive Non-GAAP Adjusted EBITDA of **$3.8 million**, improved operating leverage, and sufficient liquidity for the next 12 months [Key Financial and Operating Metrics](index=23&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Key Metrics (Q1 2025 vs Q1 2024) | Key Metrics (Q1 2025 vs Q1 2024) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Active Buyers (in thousands) | 1,370 | 1,296 | +5.7% | | Orders (in thousands) | 1,371 | 1,181 | +16.1% | | Revenue (in thousands) | $71,291 | $64,533 | +10.5% | | Gross Margin | 79.1% | 80.1% | -100 bps | | Loss from continuing operations (in thousands) | $(5,215) | $(12,190) | -57.2% | | Non-GAAP Adjusted EBITDA (in thousands) | $3,808 | $1,888 | +101.7% | [Results of Operations](index=24&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) Revenue increased **10.5%** to **$71.3 million** driven by buyer and order growth, while gross margin declined and operating expenses decreased due to cost efficiencies - Revenue growth was primarily driven by a **5.7% increase in Active Buyers** and a **16.1% increase in Orders**, reflecting strength in the core marketplace business[98](index=98&type=chunk) - Gross margin decreased to **79.1%** from **80.1%** year-over-year, mainly due to higher outbound shipping, labor, and packaging costs[99](index=99&type=chunk) - Operations, product, and technology expenses decreased by **$2.0 million**, primarily due to a **$1.1 million** decrease in severance costs from the March 2024 workforce reorganization[100](index=100&type=chunk) - Sales, general, and administrative expenses decreased by **$2.6 million**, mainly from a **$3.6 million** reduction in personnel-related costs, including a **$1.2 million** decrease in severance costs from the 2024 reorganization[102](index=102&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company generated **$5.7 million** in positive operating cash flow, holding **$55.4 million** in liquidity, deemed sufficient for at least the next 12 months - The company generated positive cash flows from continuing operations of **$5.7 million** for Q1 2025, an increase from **$3.3 million** in the prior year period[105](index=105&type=chunk)[109](index=109&type=chunk) - As of **March 31, 2025**, the company had cash, cash equivalents, and short-term marketable securities totaling **$55.4 million**[105](index=105&type=chunk) - Management believes existing cash and available credit will be sufficient for at least the next **12 months** and does not anticipate expanding its distribution network in the near term[106](index=106&type=chunk) [Market Risk Disclosures](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include immaterial interest rate exposure and significant inflation risk impacting operating costs and potentially customer spending - The company's Term Loan bears a variable interest rate, but a **1%** change in rates would not materially impact annual interest expense[117](index=117&type=chunk) - Inflation remains a key risk, contributing to rising costs for labor, freight, and other operational expenses, potentially affecting customer purchasing power and revenue growth[118](index=118&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of **March 31, 2025**, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of **March 31, 2025**[120](index=120&type=chunk) - There were no material changes in internal control over financial reporting during the quarter[121](index=121&type=chunk) Part II. Other Information [Legal Proceedings, Risk Factors, and Other Disclosures](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in material legal proceedings, and no material changes occurred to risk factors, unregistered equity sales, or senior security defaults - The company is not currently a party to any material pending legal proceedings[124](index=124&type=chunk) - There have been no material changes to the company's risk factors as disclosed in its Fiscal 2024 10-K[125](index=125&type=chunk)

Financial Performance - Q1 2025 revenue reached $71 million, showing a year-over-year growth of 10%[8] - Q1 2025 gross profit was $56 million, resulting in a gross profit margin of 79%[8] - Q1 2025 Adjusted EBITDA was $4 million, representing an Adjusted EBITDA margin of 5%[8] Operational Metrics - ThredUp had 14 million active buyers in Q1 2025, a year-over-year increase of 6%[8] - Q1 2025 orders totaled 14 million, reflecting a year-over-year growth of 16%[8] - The company saved 666 million pounds of carbon emissions, 13 billion kWh of energy, and 7 billion gallons of water[8] Strategic Initiatives - ThredUp's operating platform leverages multi-year infrastructure investments for single-SKU logistics at scale[10] - The company's AI-powered search tools, including image search and chat search, enhance the customer experience[27, 28] - The U S secondhand apparel market is expected to grow at a 9% CAGR from 2024 to 2029[37]

[Executive Summary & Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Outlook) [Q1 2025 Performance Highlights](index=1&type=section&id=Q1%202025%20Performance%20Highlights) 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](index=1&type=section&id=Financial%20Outlook) 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](index=1&type=section&id=Second%20Quarter%202025%20Outlook) 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](index=1&type=section&id=Fiscal%20Year%202025%20Outlook) 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](index=2&type=section&id=Financial%20Performance) [Condensed Consolidated Statements of Operations](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) 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](index=6&type=chunk) - Operating loss as a percentage of revenue improved from **(19.2)% in Q1 2024** to **(7.6)% in Q1 2025**[6](index=6&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) 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](index=10&type=chunk) - Marketable securities decreased from **$10,525 thousand** to **$5,719 thousand**[10](index=10&type=chunk) - Accounts payable increased from **$6,120 thousand** to **$13,000 thousand**[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) 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](index=11&type=chunk) - Net cash flow from investing activities was positive, primarily driven by the **sale and maturity of marketable securities**[11](index=11&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted EBITDA (Loss) Reconciliation](index=3&type=section&id=Adjusted%20EBITDA%20%28Loss%29%20Reconciliation) 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](index=7&type=chunk) [Non-GAAP Operating Expenses Reconciliation](index=4&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) 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](index=8&type=chunk) - Severance and other restructuring charges in Q1 2025 were **negligible** compared to Q1 2024[9](index=9&type=chunk) [Non-GAAP Free Cash Flow Reconciliation](index=8&type=section&id=Non-GAAP%20Free%20Cash%20Flow%20Reconciliation) 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](index=12&type=chunk) [Operational Metrics](index=3&type=section&id=Operational%20Metrics) [Active Buyers and Orders](index=3&type=section&id=Active%20Buyers%20and%20Orders) 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](index=7&type=chunk) [Additional Information](index=9&type=section&id=Additional%20Information) [About ThredUp](index=9&type=section&id=About%20ThredUp) 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](index=14&type=chunk) - 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](index=14&type=chunk) - 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](index=14&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) 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](index=15&type=chunk) - These statements are subject to **significant risks and uncertainties**, and actual results may differ from expectations[15](index=15&type=chunk)[16](index=16&type=chunk) - 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](index=16&type=chunk)[17](index=17&type=chunk) [Non-GAAP Financial Measures and Other Operating and Business Metrics Definitions](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Operating%20and%20Business%20Metrics%20Definitions) 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](index=18&type=chunk) - 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](index=18&type=chunk) - 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](index=23&type=chunk)

Core Insights - ThredUp Inc. reported strong financial results for Q1 2025, with a record quarter for new buyer acquisition and an optimistic outlook for the full year [2][3][5] Financial Highlights - Revenue for Q1 2025 was $71.3 million, a 10% increase year-over-year [6] - Gross profit reached $56.4 million, up 9% year-over-year, with a gross margin of 79.1% [6] - The company reported a loss from continuing operations of $5.2 million, improving from a loss of $12.2 million in Q1 2024 [6] - Adjusted EBITDA from continuing operations was $3.8 million, or 5.3% of revenue, compared to $1.9 million, or 2.9% of revenue, in the same quarter last year [6][21] Business Developments - ThredUp launched an AI-powered social commerce feature called Shop Social, currently in beta on the iOS app [6] - The company announced a next-generation branded resale platform, removing branded resale fees to enhance brand partnerships [6] - ThredUp's 2025 Resale Report indicated that the U.S. secondhand market grew five times faster than the broader retail clothing market in 2024, projected to reach $74 billion by 2029 [6] Future Outlook - For Q2 2025, ThredUp anticipates record revenue of $71.3 million, a gross margin of 79.1%, and an increase in active buyers to 1.37 million, reflecting a 6% year-over-year growth [5][11] - The full-year 2025 outlook has been revised upwards, with expected revenue between $281 million and $291 million, representing a 10% year-over-year increase [11]

Company Overview - ThredUp's stock experienced a rise ahead of its upcoming earnings report, reflecting positive momentum with an increase in active buyers and solid customer retention [1][2] - The company has issued mid-to-high single-digit revenue growth guidance for both Q1 and the full year, driven by new buyer acquisition and investments in AI [2] Financial Performance - ThredUp projected Q1 revenue between $67.5 million and $69.5 million, and annual revenue between $270 million and $280 million [5] - The company is expected to maintain flat year-over-year adjusted EBITDA margins despite revenue growth [2] Market Position - ThredUp's proprietary platform and logistics infrastructure provide a competitive edge in the fragmented secondhand clothing market [2] - The secondhand clothing sector is performing well, particularly during economic downturns, attracting younger consumers [4] Industry Trends - The secondhand market is benefiting from consumers seeking bargains and selling items for extra cash, while also being less affected by tariffs [3] - Analysts caution that inventory challenges may arise if consumers choose to hold onto existing items due to economic uncertainty [4]

Core Insights - Investors are optimistic about the impact of new U.S. tariffs on secondhand goods sellers, with shares of ThredUp and Savers Value Village rising by 31% and 22% respectively since the announcement, while the S&P retail select index has declined by 7% [1] Group 1: Market Dynamics - Secondhand sellers are expected to attract bargain-hunting consumers and those looking to sell items for extra cash, as their merchandise is immune from tariffs, allowing them to potentially raise prices in response to increased costs of new imported goods [2] - The secondhand sector typically performs well during economic downturns and has gained popularity among younger consumers [2] Group 2: Company Performance and Expectations - ThredUp projected revenue between $67.5 million and $69.5 million for Q1 and between $270 million and $280 million for the year prior to the tariff announcement [3] - ThredUp's CEO noted that the uncertain consumer environment and tariffs could make secondhand options more attractive [4] - In contrast, Savers Value Village expressed caution regarding the tariff impact, with its CEO stating that the tariff issue complicates the outlook [4][5] Group 3: Consumer Behavior Trends - A report indicated that millennials are increasingly turning to secondhand shopping, with 52% of those who purchased secondhand items in the past year reporting an increase in their resale shopping activities [5]

Financial Data and Key Metrics Changes - For Q4 2024, revenue totaled $67.3 million, an increase of 9.5% year over year, driven by marketing investments and AI upgrades [33] - Gross margin was 80.4%, a 290 basis point increase from the same quarter last year, attributed to a higher percentage of sales from consignment [34] - Adjusted EBITDA was $5 million, representing 7.4% of revenue, doubling the adjusted EBITDA dollars from the previous year [35] Business Line Data and Key Metrics Changes - Active buyers reached 1.3 million, a decline of 6% year over year, while order growth reaccelerated to 1.2 million, an increase of 2% year over year [33] - Fresh listings, defined as items under 14 days old, increased by 9% year over year, indicating a growing supply of high-quality apparel [13] Market Data and Key Metrics Changes - 51% of consumers indicated that inflation impacts their spending on apparel, while 62% expressed concern that tariffs would increase apparel prices [25][26] - The company noted that secondhand goods could become more attractive to consumers seeking affordable options due to rising prices in new apparel [25] Company Strategy and Development Direction - The company aims to accelerate growth while maintaining adjusted EBITDA margins, focusing on increasing active buyers through marketing and fresh listings [38] - Investments in generative AI are expected to enhance the secondhand shopping experience, with advancements in AI search functionality driving higher conversion rates [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum from Q4 continuing into Q1 2025, despite some uncertainty in consumer behavior [52] - The company plans to reach positive free cash flow on an annual basis in 2025, indicating a strong financial position [42] Other Important Information - The company completed the divestiture of Remix in November 2024, allowing a focus on its US business [6] - The company plans to reduce stock-based compensation by over 40% in 2025 to mitigate share dilution [43] Q&A Session Summary Question: Revenue, gross margin, and EBITDA pacing through the year - Management indicated that revenue growth is expected to accelerate from Q1 to Q2 and Q2 to Q3, with gross margin rates remaining consistent throughout the year [50][51] Question: Marketing spend and stock-based compensation outlook - Marketing is expected to be about 19% of revenue on a quarterly basis, with a conscious decision to use more cash and less stock to reduce dilution [61][60] Question: Image search technology and its impact on conversion - Image search has driven higher conversion rates as customers find relevant items more easily, leading to increased utilization of the product [68][70] Question: Impact of tariffs on advertising costs and pricing algorithms - Management noted that lower advertising costs could allow for increased spending on marketing, while dynamic pricing algorithms are in place to adjust to market conditions [76][80]

Core Insights - ThredUp has divested its European business to concentrate on its domestic U.S. market, following a management buyout led by Florin Filote, the new general manager for European operations [1][4][7] Company Overview - Founded in 2009, ThredUp specializes in secondhand clothing and accessories, raising over $300 million prior to its 2021 IPO. However, its market cap has significantly declined from $1.3 billion at IPO to a low of $60 million last month [2] Financial Performance - In Q2 2024, ThredUp reported an 18% year-on-year decline in European revenue to $13 million, with gross profit falling 25% to $3.6 million [3] - Following better-than-expected Q3 earnings, ThredUp's shares surged, bringing its market cap to nearly $200 million [4] Transaction Details - ThredUp confirmed a non-binding agreement for the buyout of Remix, with Filote acquiring 91% of the common stock for just €1, while ThredUp made a final cash investment of $2 million to support Remix as an independent entity [5] - The transaction includes a convertible promissory note issued to ThredUp by Remix for €61.6 million ($64.7 million), representing the investment made by ThredUp since acquiring Remix [6] Strategic Implications - The divestment allows ThredUp to focus on its core U.S. business, with confidence expressed in Remix's future under Filote's leadership [7]