ThredUp(US:TDUP)2023-11-07 01:43Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $82 million, representing a 21% year-over-year increase [9][32] - Consolidated gross margin was 69%, a 350 basis point increase compared to the same quarter last year [34] - Adjusted EBITDA loss was $3.6 million, showing a significant improvement of 1,180 basis points year-over-year [36] - GAAP net loss was $18.1 million, compared to a loss of $23.7 million in the same quarter last year [36] - Cash and marketable securities decreased from $82.6 million to $80.2 million, with only $2.5 million used in Q3 [37] Business Line Data and Key Metrics Changes - Consignment revenue grew by 39% year-over-year, while product revenue decreased by 8% [32] - Active buyer count reached 1.8 million, up 4% year-over-year, marking the first growth in active buyers this year [9][33] - Orders increased by 11% year-over-year to 1.8 million [33] Market Data and Key Metrics Changes - The U.S. business achieved adjusted EBITDA breakeven and generated free cash flow for the first time in company history [10] - The European business is facing headwinds due to its non-consignment model, impacting consolidated margins [11] Company Strategy and Development Direction - The company aims to achieve full-year EBITDA breakeven in 2024 while focusing on long-term growth rather than short-term gains [12][20] - Strategic initiatives include enhancing customer satisfaction through the Thrift Promise and improving logistics efficiency [21][22] - The transition to a consignment model is expected to improve gross margins and expand the selection of high-quality supply in the long term [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing consumer uncertainty and a competitive retail environment but expressed confidence in the company's ability to navigate these challenges [13][20] - The company plans to maintain a promotional strategy to drive active buyer growth into 2024 [18][67] - Management expects the promotional environment to persist into 2024, impacting margins but prioritizing active buyer engagement [67][68] Other Important Information - ThredUp was recognized as one of TIME's 100 Most Influential Companies of 2023, highlighting its social impact and workplace culture [27] - The company is leveraging artificial intelligence to enhance its distribution network and product experience [26] Q&A Session Summary Question: What is the outlook for 2024 considering the headwinds? - Management indicated that the Q4 revenue guidance serves as a baseline for 2024, with expectations for increased consignment revenue [46][50] Question: How is the promotional environment affecting margins? - Management acknowledged a more promotional strategy in Q4 to maintain active buyer growth, which may impact margins [57][68] Question: What is the impact of new competitors in the resale market? - Management noted no significant incremental pressure from new resale players, focusing instead on maintaining active buyer engagement [67] Question: What are the expectations for return rates and their impact on EBITDA? - Management reported a 700 basis point improvement in return rates, contributing positively to EBITDA [94][95] Question: How is the company addressing the budget versus premium consumer segments? - Management confirmed a successful strategy in attracting more premium buyers, with no significant changes in budget shopper behavior [107][108]