ThredUp(TDUP)2025-03-04 02:52Financial Data and Key Metrics Changes - For Q4 2024, revenue totaled 5 million, representing 7.4% of revenue, doubling from the previous year and showing a 330 basis point margin improvement [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 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 about new government policies affecting 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 [26] Company Strategy and Development Direction - The company aims to accelerate growth while maintaining adjusted EBITDA margins, focusing on customer acquisition 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 2024 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, focusing exclusively on its US operations [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, with Q4 showing growth but at a lower rate [50][52] Question: Marketing spend and stock-based compensation outlook - Marketing spend is projected to be about 19% of revenue quarterly, with a focus on improving returns on that spend [61] Question: Image search technology and its impact on conversion - Management highlighted that image search technology has significantly improved conversion rates by providing more relevant results based on visual shopping preferences [68][70] Question: Impact of tariffs on advertising costs and pricing algorithms - Management noted that tariffs could lead to lower advertising costs and potentially increase the attractiveness of secondhand goods, with dynamic pricing algorithms in place to adjust to market conditions [77][80]