Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2024

ThredUp Inc.

(Exact name of registrant as specified in its charter)


Delaware	001-40249	26-4009181
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


969 Broadway, Suite 200 Oakland, California			94607
(Address of principal executive offices)			(Zip Code)

(415) 402-5202

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

TDUP

The Nasdaq Stock Market LLC

Long-Term Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On August 5, 2024, ThredUp Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of the supplemental financial information is attached hereto as Exhibit 99.2. The press release and supplemental financial information are incorporated herein by reference.

The information in this Current Report on Form 8-K and the exhibits attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits

(d)Exhibits.


Exhibit Number						Description
99.1						Press Release dated August 5, 2024
99.2						Supplemental Financial Information dated August 5, 2024
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			THREDUP INC.

			By:			/s/ SEAN SOBERS
						Sean Sobers
						Chief Financial Officer
						(Principal Financial and Accounting Officer)

Date: August 5, 2024

Exhibit 99.1

ThredUp Announces Second Quarter 2024 Results

•Second quarter revenue of $79.8 million, representing a decrease of 4% year-over-year.

•Second quarter gross margin of 70.4% and an increase in gross profit of 1% year-over-year.

•Active Buyers of 1.7 million and Orders of 1.7 million in Q2 2024, representing a decrease of 3% and a decrease of 6%, respectively, year-over-year.

•Evaluating strategic alternatives for its European business; providing Q3, Q4, and updated FY 2024 guidance for both consolidated and U.S. only operations.

Oakland, CA — August 5, 2024 — ThredUp Inc. (Nasdaq: TDUP, LTSE: TDUP), one of the largest online resale platforms for apparel, shoes, and accessories, announced today its financial results for the second quarter ended June 30, 2024 and updated full year 2024 financial outlook.

“While this quarter presented challenges in both the U.S. and Europe, we have emerged with a renewed focus,” said ThredUp CEO and co-founder James Reinhart. “Looking ahead, we are intent on enhancing our product experience through gen-AI, improving our unit economics and driving process improvements throughout our operations. As we become a US only business again, we expect to grow faster, with structurally higher gross margins, positive adjusted EBITDA, and free cash flow."

Second Quarter 2024 Financial Highlights

•Revenue: Total revenue of $79.8 million, a decrease of 4% year-over-year.

◦U.S. revenue of $66.7 million, flat year-over-year.

◦Europe revenue of $13.0 million, a decrease of 18% year-over-year.

•Gross Profit and Gross Margin: Gross profit totaled $56.1 million, an increase of 1% year-over-year. Gross margin was 70.4% as compared to 67.4% for the second quarter 2023.

◦U.S. gross profit of $52.6 million, an increase of 3% year-over-year. Gross margin was 78.8% as compared to 76.4% for the second quarter 2023.

◦Europe gross profit of $3.6 million, a decrease of 25% year-over-year. Gross margin was 27.3% as compared to 29.8% for the second quarter 2023.

•Net Loss: Net loss was $14.0 million, or a negative 17.5% of revenue, for the second quarter 2024, compared to a net loss of $18.8 million, or a negative 22.7% of revenue, for the second quarter 2023.

•Adjusted EBITDA Loss and Adjusted EBITDA Loss Margin1: Adjusted EBITDA loss was $1.5 million, or a negative 1.9% of revenue, for the second quarter 2024, compared to an Adjusted EBITDA loss of $5.0 million, or a negative 6.1% of revenue, for the second quarter 2023.

•Active Buyers and Orders: Active Buyers of 1.666 million and Orders of 1.686 million, representing a decrease of 3% and a decrease of 6%, respectively, over the second quarter 2023.

Recent Business Highlights

•Evaluating Strategic Alternatives for its European Business: Following a review of its European operations, ThredUp intends to exit the European market and is evaluating strategic alternatives for its Remix business. In 2023, Remix generated net revenue of $63.5 million and gross margin of 24.2%.

•Launched AI-powered Search Features: ThredUp launched a new suite of AI-enabled search features to personalize the shopping experience, including improved search, image search, and style chat. These features are designed to enable ThredUp customers to easily discover and shop the company inventory of over 4 million single-SKU items. These algorithms continuously learn and improve, providing customers with relevant and personalized results.

•Published Third Annual Impact Report: ThredUp released its third annual Impact Report in August 2024. Through transparent reporting and disclosures, the report provides a comprehensive view of ThredUp’s environmental, social, and governance (ESG) profile, outlining the company’s business and brand-aligned ESG strategy and detailing the progress the company made across ESG initiatives in 2023. Read the report here https://ir.thredup.com/impact-at-thredUp.

Financial Outlook

For the third quarter 2024, ThredUp expects:

•Consolidated Revenue in the range of $69 million to $71 million.

◦U.S. Revenue in the range of $59 million to $61 million.

•Consolidated Gross margin in the range of 69.8% to 71.8%.

◦U.S. Gross margin in the range of 77.5% to 79.5%.

•Consolidated Adjusted EBITDA margin in the range of (6.0)% to (4.0)%.

◦U.S. Adjusted EBITDA margin in the range of (1.0)% to 1.0%.

For the fourth quarter 2024, ThredUp expects:

•Consolidated Revenue in the range of $70 million to $72 million.

◦U.S. Revenue in the range of $57 million to $59 million.

•Consolidated Gross margin in the range of 68.8% to 70.8%.

1 Adjusted EBITDA loss and Adjusted EBITDA loss margin are non-GAAP measures. See “Reconciliation of GAAP to Non-GAAP Financial Measures” for a detailed reconciliation of Adjusted EBITDA loss and Adjusted EBITDA loss margin to the most directly comparable GAAP measures and “Non-GAAP Financial Measures” for a discussion of why we believe these non-GAAP measures are useful.

◦U.S. Gross margin in the range of 77.5% to 79.5%.

•Consolidated Adjusted EBITDA margin in the range of (4.5)% to (2.5)%.

◦U.S. Adjusted EBITDA margin in the range of 0.0% to 2.0%.

For the full fiscal year 2024, ThredUp expects:

•Consolidated Revenue in the range of $298 million to $302 million.

◦U.S. Revenue in the range of $247 million to $251 million.

•Consolidated Gross margin in the range of 69.6% to 70.6%.

◦U.S. Gross margin in the range of 78.5% to 79.5%.

•Consolidated Adjusted EBITDA margin in the range of (3.3)% to (2.3)%.

◦U.S. Adjusted EBITDA margin in the range of 1.0% to 2.0%.

ThredUp is not providing a quantitative reconciliation of forward-looking guidance of the Non-GAAP measure Adjusted EBITDA loss to net loss because certain items are out of ThredUp’s control or cannot be reasonably predicted. Historically, these items have included, but are not limited to, stock-based compensation expense, depreciation and amortization, severance and other reorganization costs, interest expense, provision (benefit) for income taxes, acquisition and offering-related expenses, and impairment of non-marketable equity investment. Accordingly, a reconciliation for Adjusted EBITDA loss in order to calculate forward-looking Adjusted EBITDA loss margin is not available without unreasonable effort. However, for the third and the fourth quarters of 2024 and full year 2024, depreciation and amortization is expected to be $4.8 million, $4.8 million and $19.4 million, respectively. In addition, for the third and the fourth quarters of 2024 and full year 2024, stock-based compensation expense is expected to be $6.9 million, $6.8 million and $28.0 million, respectively. These items are uncertain, depend on various factors, and could result in projected net loss being materially less than is indicated by the currently estimated Adjusted EBITDA loss margin.

ThredUp is not providing a quantitative reconciliation for free cash flow estimates on a forward-looking basis because it is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of net cash provided by (used in) operating activities and certain reconciling items on a forward-looking basis, which could be significant to the Company's results.

Conference Call and Webcast Information

•The live and archived webcast and all related earnings materials will be available at ThredUp’s investor relations website: ir.thredup.com/news-events/events-and-presentations.

ThredUp Inc.

Condensed Consolidated Balance Sheets

(unaudited)


	June 30, 2024		December 31, 2023
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	44,755	$	56,084
Marketable securities	10,525		8,100
Accounts receivable, net	5,888		7,813
Inventory	10,313		15,687
Other current assets	6,698		6,204
Total current assets	78,179		93,888
Operating lease right-of-use assets	45,624		42,118
Property and equipment, net	82,839		87,672
Goodwill	11,608		11,957
Intangible assets	6,628		8,156
Other assets	6,333		6,176
Total assets	$	231,211	$	249,967
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,897	$	9,457
Accrued and other current liabilities	34,210		35,934
Seller payable	19,182		21,495
Operating lease liabilities, current	5,513		5,949
Current portion of long-term debt	3,847		3,838
Total current liabilities	73,649		76,673
Operating lease liabilities, non-current	48,068		44,621
Long-term debt, net of current portion	20,080		22,006
Other non-current liabilities	2,925		2,750
Total liabilities	144,722		146,050
Commitments and contingencies
Stockholders’ equity:
Class A and B common stock, $0.0001 par value; 1,120,000 shares authorized as of June 30, 2024 and December 31, 2023; 112,386 and 108,784 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	11		11
Additional paid-in capital	599,333		585,156
Accumulated other comprehensive loss	(3,472)		(2,375)
Accumulated deficit	(509,383)		(478,875)
Total stockholders’ equity	86,489		103,917
Total liabilities and stockholders’ equity	$	231,211	$	249,967

ThredUp Inc.

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands, except per share amounts)
Revenue:
Consignment	$	63,855	$	53,415	$	125,080	$	99,894
Product	15,900		29,243		34,263		58,686
Total revenue	79,755		82,658		159,343		158,580
Cost of revenue:
Consignment	12,266		9,580		22,768		18,800
Product	11,369		17,346		25,129		32,955
Total cost of revenue	23,635		26,926		47,897		51,755
Gross profit	56,120		55,732		111,446		106,825
Operating expenses:
Operations, product, and technology	38,921		39,771		79,972		78,118
Marketing	16,053		18,643		29,466		35,513
Sales, general, and administrative	15,440		16,030		33,013		32,089
Total operating expenses	70,414		74,444		142,451		145,720
Operating loss	(14,294)		(18,712)		(31,005)		(38,895)
Interest expense	(652)		(721)		(1,329)		(798)
Other income, net	998		685		1,843		1,161
Loss before provision for income taxes	(13,948)		(18,748)		(30,491)		(38,532)
Provision for income taxes	6		12		17		21
Net loss	$	(13,954)	$	(18,760)	$	(30,508)	$	(38,553)
Loss per share, basic and diluted	$	(0.13)	$	(0.18)	$	(0.28)	$	(0.37)
Weighted-average shares used in computing loss per share, basic and diluted	110,997		103,905		110,145		102,911

ThredUp Inc.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)
Net loss	$	(13,954)	$	(18,760)	$	(30,508)	$	(38,553)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(231)		(236)		(1,095)		308
Unrealized gain (loss) on available-for-sale securities	4		303		(2)		913
Total other comprehensive income (loss)	(227)		67		(1,097)		1,221
Total comprehensive loss	$	(14,181)	$	(18,693)	$	(31,605)	$	(37,332)

ThredUp Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Six Months Ended
	June 30, 2024		June 30, 2023
	(in thousands)
Cash flows from operating activities:
Net loss	$	(30,508)	$	(38,553)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,798		8,517
Stock-based compensation expense	14,220		17,019
Reduction in carrying amount of right-of-use assets	3,093		3,177
Other	(691)		291
Changes in operating assets and liabilities:
Accounts receivable, net	1,842		916
Inventory	5,029		(2,670)
Other current and non-current assets	(10)		(699)
Accounts payable	1,105		177
Accrued and other current liabilities	(1,635)		(1,750)
Seller payable	(2,293)		3,301
Operating lease liabilities	(3,585)		(4,240)
Other non-current liabilities	56		(325)
Net cash used in operating activities	(3,579)		(14,839)
Cash flows from investing activities:
Purchases of marketable securities	(15,153)		(7,878)
Maturities of marketable securities	13,000		49,479
Purchases of property and equipment	(2,790)		(12,292)
Net cash provided by (used in) investing activities	(4,943)		29,309
Cash flows from financing activities:

Repayment of debt	(2,000)		(2,000)
Proceeds from issuance of stock-based awards	1,788		2,136
Payments of withholding taxes on stock-based awards	(2,450)		(1,885)
Net cash used in financing activities	(2,662)		(1,749)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(160)		324
Net change in cash, cash equivalents, and restricted cash	(11,344)		13,045
Cash, cash equivalents, and restricted cash, beginning of period	61,469		44,051
Cash, cash equivalents, and restricted cash, end of period	$	50,125	$	57,096

ThredUp Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited)


Adjusted EBITDA Reconciliation
	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
	(in thousands)
Net loss	$	(13,954)		$	(18,760)		$	(30,508)		$	(38,553)
Stock-based compensation expense	7,009			7,628			14,220			17,019
Depreciation and amortization	4,865			4,836			9,798			8,517
Severance and other reorganization costs	(122)			551			2,864			551
Interest expense	652			721			1,329			798

Provision for income taxes	6			12			17			21

Non-GAAP Adjusted EBITDA loss	$	(1,544)		$	(5,012)		$	(2,280)		$	(11,647)
Total revenue	$	79,755		$	82,658		$	159,343		$	158,580
Non-GAAP Adjusted EBITDA loss margin	(1.9)		%	(6.1)		%	(1.4)		%	(7.3)		%


Free Cash Flow Reconciliation
	Six Months Ended
	June 30, 2024		June 30, 2023
	(in thousands)
Net cash used in operating activities	$	(3,579)	$	(14,839)
Less: Purchases of property and equipment	(2,790)		(12,292)
Non-GAAP free cash flow	$	(6,369)	$	(27,131)

Investors

ir@thredup.com

Media

media@thredup.com

About ThredUp

ThredUp is transforming resale with technology and a mission to inspire the world to think secondhand first. By making it easy to buy and sell secondhand, ThredUp has become one of the world's largest online resale platforms for apparel, shoes and accessories. Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. Our proprietary operating platform is the foundation for our managed marketplace and consists of distributed processing infrastructure, proprietary software and systems and data science expertise. With ThredUp’s Resale-as-a-Service, some of the world's leading brands and retailers are leveraging our platform to deliver customizable, scalable resale experiences to their customers. ThredUp has processed over 200 million unique secondhand items from 60,000 brands across 100 categories. By extending the life cycle of clothing, ThredUp is changing the way consumers shop and ushering in a more sustainable future for the fashion industry.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential”, “looking ahead”, “seeking” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this release include, but are not limited to, guidance on financial results for the third and the fourth quarters and full year of 2024; the Company’s intention to exit the European market and to seek strategic alternatives for its European business; statements about future operating results, capital expenditures and other developments in our business, our long term growth and the focus of the Company’s resources and attention in the United States; trends, consumer demand and growth in the global and U.S. online resale markets; the momentum of our business; our investments in technology and infrastructure, including with respect to AI technologies such as AI enabled search features; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions, investments or reorganization activities, including our intention to reshape ThredUp into an AI-powered resale company; the impact, including on an annualized basis, of our reduction in corporate expenses and headcount; the success and expansion of our RaaS® model and the timing and plans for future RaaS® clients; and our ability to attract new Active Buyers.

Forward-looking statements are neither historical facts nor assurances of future performance. Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include, but are not limited to: our ability to exit our European business and identify and execute a strategic alternative for our European business; our ability to attract new users and convert users into buyers and Active Buyers; our ability to achieve profitability; the sufficiency of our cash, cash equivalents and capital resources to meet our liquidity needs; our ability to effectively manage or sustain our growth and to effectively expand our operations; our ability to continue to generate revenue from new RaaS® offerings as sources of revenue; risks from an intensely competitive market; our ability to effectively deploy new and evolving technologies, such as artificial intelligence and machine learning, in our offerings; risks arising from economic and industry trends, including the effects of foreign currency exchange rate fluctuations, inflationary pressures, increased interest rates, changing consumer habits, climate change and general global economic uncertainty; our ability to comply with applicable laws and regulations; and our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments. More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The forward-looking statements in this release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing ThredUp’s views as of any date subsequent to the date of this press release.

Additional information regarding these and other factors that could affect ThredUp's results is included in ThredUp’s SEC filings, which may be obtained by visiting our Investor Relations website at ir.thredup.com or the SEC's website at www.sec.gov.

Channels for Disclosure of Information

ThredUp intends to announce material information to the public through the ThredUp Investor Relations website ir.thredup.com, SEC filings, press releases, public conference calls, and public webcasts. ThredUp uses these channels, as well as social media, to communicate with its investors, customers, and the public about the company, its offerings, and other issues. It is possible that the information ThredUp posts on social media could be deemed to be material information. As such, ThredUp encourages investors, the media, and others to follow the channels listed above, including the social media channels listed on ThredUp’s investor relations website, and to review the information disclosed through such channels.

Non-GAAP Financial Measures and Other Operating and Business Metrics

This press release and the accompanying tables contain non-GAAP financial measures, including: Adjusted EBITDA loss and Adjusted EBITDA loss margin, free cash flow and other operating and business metrics. In addition to our results determined in accordance with GAAP, we believe that these non-GAAP measures and other operating and business metrics, are useful in evaluating our operating performance and enhancing an overall understanding of our financial position. We use these measures and metrics to evaluate and assess our operating performance, and for internal planning and forecasting purposes. We believe that these non-GAAP measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Our non-GAAP measures and other operating and business metrics are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP measures and other operating and business metrics used by other companies.

We encourage investors to review our results determined in accordance with GAAP and the accompanying reconciliations for more information.

A reconciliation is provided above for Adjusted EBITDA loss to net loss, the most directly comparable financial measure stated in accordance with GAAP. We calculate Adjusted EBITDA loss as net loss adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, severance and other reorganization costs, interest expense, and provision for income taxes. Non-GAAP Adjusted EBITDA loss margin represents Non-GAAP Adjusted EBITDA loss divided by total revenue for the same period.

A reconciliation is provided above for free cash flow to cash flows from operations, the most directly comparable financial measure stated in accordance with GAAP. We calculate free cash flow as Net cash used in operating activities adjusted to exclude Purchases of property and equipment.

An Active Buyer is a ThredUp buyer who has made at least one purchase in the last twelve months. A ThredUp buyer is a customer who has created an account and purchased in our marketplaces, including through our RaaS® clients, and is identified by a unique email address. A single person could have multiple ThredUp accounts and count as multiple Active Buyers.

Orders are defined as the total number of orders placed by buyers across our marketplaces, including through our RaaS® clients, in a given period, net of cancellations.

Exhibit 99.2

ThredUp Inc.

Second Quarter 2024 Supplemental Financials

Key Financial Metrics for the Quarter

•Revenue of $79.8 million

◦vs. $82.7 million in 2Q23

◦Decline of 3.5% YoY

•Gross profit of $56.1 million

◦vs. $55.7 million in 2Q23

◦Growth of 0.7% YoY

•Gross margin of 70.4%

◦vs. 67.4% in 2Q23

•GAAP net loss of $14.0 million

◦vs. net loss of $18.8 million in 2Q23

•Adjusted EBITDA loss of $1.5 million

◦vs. loss of $5.0 million in 2Q23

•Adjusted EBITDA loss margin of 1.9%

◦vs. loss margin of 6.1% in 2Q23

•Cash, cash equivalents, restricted cash and short-term marketable securities were $60.7 million at the quarter end

•Total quarter Active Buyers of 1.666 million

◦vs. 1.710 million in 2Q23

◦A decrease of 2.6% YoY

•Total Orders of 1.686 million

◦vs. 1.789 million in 2Q23

◦A decrease of 5.8% YoY

Financial Outlook

For third quarter 2024, ThredUp expects:

•Consolidated Revenue in the range of $69 million to $71 million

◦U.S. Revenue in the range of $59 million to $61 million

•Consolidated Gross margin in the range of 69.8% to 71.8%

◦U.S. Gross margin in the range of 77.5% to 79.5%

•Consolidated Adjusted EBITDA margin in the range of (6.0)% to (4.0)%

◦U.S. Adjusted EBITDA margin in the range of (1.0)% to 1.0%

•Consolidated Depreciation and amortization of approximately $4.8 million

•Consolidated Stock-based compensation of approximately $6.9 million

•Weighted-average shares of approximately 113 million

For fourth quarter 2024, ThredUp expects:

•Consolidated Revenue in the range of $70 million to $72 million

◦U.S. Revenue in the range of $57 million to $59 million

•Consolidated Gross margin in the range of 68.8% to 70.8%

◦U.S. Gross margin in the range of 77.5% to 79.5%

•Consolidated Adjusted EBITDA margin in the range of (4.5)% to (2.5)%

◦U.S. Adjusted EBITDA margin in the range of 0.0% to 2.0%

•Consolidated Depreciation and amortization of approximately $4.8 million

•Consolidated Stock-based compensation of approximately $6.8 million

•Weighted-average shares of approximately 115 million

For fiscal year 2024, ThredUp expects:

•Consolidated Revenue in the range of $298 million to $302 million

◦U.S. Revenue in the range of $247 million to $251 million

•Consolidated Gross margin in the range of 69.6% to 70.6%

◦U.S. Gross margin in the range of 78.5% to 79.5%

•Consolidated Adjusted EBITDA margin in the range of (3.3)% to (2.3)%

◦U.S. Adjusted EBITDA margin in the range of 1.0% to 2.0%

•Depreciation and amortization of approximately $19.4 million

•Stock-based compensation of approximately $28.0 million

•Weighted-average shares of approximately 114 million

Conference Call and Webcast

•The live and archived webcast and all related earnings materials will be available at ThredUp’s investor relations website: ir.thredup.com/news-events/events-and-presentations.


ThredUp Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages, unaudited)
Three Months Ended	September 30, 2022			December 31, 2022			March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			March 31, 2024			June 30, 2024
Revenue:
Consignment	$	41,553		$	37,470		$	46,479		$	53,415		$	57,838		$	55,877		$	61,225		$	63,855
Product	26,392			33,848			29,443			29,243			24,211			25,516			18,363			15,900
Total revenue	67,945			71,318			75,922			82,658			82,049			81,393			79,588			79,755
Cost of revenue:
Consignment	9,087			7,661			9,220			9,580			10,131			10,801			10,502			12,266
Product	14,362			18,691			15,609			17,346			15,291			20,239			13,760			11,369
Total cost of revenue	23,449			26,352			24,829			26,926			25,422			31,040			24,262			23,635
Gross profit	44,496			44,966			51,093			55,732			56,627			50,353			55,326			56,120
Gross margin % of revenue	65.5		%	63.1		%	67.3		%	67.4		%	69.0		%	61.9		%	69.5		%	70.4		%
Operating expenses:
Operations, product and technology	38,702			33,818			38,347			39,771			40,355			38,239			41,051			38,921
Marketing	14,752			12,999			16,870			18,643			19,406			11,354			13,413			16,053
Sales, general and administrative	15,232			14,538			16,059			16,030			15,058			15,510			17,573			15,440
Total operating expenses	68,686			61,355			71,276			74,444			74,819			65,103			72,037			70,414
Operating expenses % of revenue	101.1		%	86.0		%	93.9		%	90.1		%	91.2		%	80.0		%	90.5		%	88.3		%
Operating loss	(24,190)			(16,389)			(20,183)			(18,712)			(18,192)			(14,750)			(16,711)			(14,294)
Operating loss % of revenue	(35.6)		%	(23.0)		%	(26.6)		%	(22.6)		%	(22.6)		%	(18.1)		%	(21.0)		%	(17.9)		%
Interest expense	(103)			(41)			(77)			(721)			(732)			(709)			(677)			(652)
Other income (expense), net	624			(3,065)			476			685			845			841			845			998
Loss before income taxes	(23,669)			(19,495)			(19,784)			(18,748)			(18,079)			(14,618)			(16,543)			(13,948)
Provision (benefit) for income taxes	9			4			9			12			3			(5)			11			6
Net loss	$	(23,678)		$	(19,499)		$	(19,793)		$	(18,760)		$	(18,082)		$	(14,613)		$	(16,554)		$	(13,954)
Net loss margin	(34.8)		%	(27.3)		%	(26.1)		%	(22.7)		%	(22.0)		%	(18.0)		%	(20.8)		%	(17.5)		%


ThredUp Inc.
Reconciliation of Net Loss to Adjusted EBITDA
(in thousands, except percentages, unaudited)
Three Months Ended	September 30, 2022			December 31, 2022			March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			March 31, 2024			June 30, 2024
Net loss	$	(23,678)		$	(19,499)		$	(19,793)		$	(18,760)		$	(18,082)		$	(14,613)		$	(16,554)		$	(13,954)
Stock-based compensation expense	7,177			6,059			9,391			7,628			7,888			6,775			7,211			7,009
Depreciation and amortization	3,539			3,816			3,681			4,836			5,364			4,851			4,933			4,865
Severance and other reorganization costs	1,809			(14)			—			551			507			138			2,986			(122)
Interest expense	103			41			77			721			732			709			677			652
Provision (benefit) for income taxes	9			4			9			12			3			(5)			11			6

Impairment of non-marketable equity investment	—			3,750			—			—			—			—			—			—
Adjusted EBITDA loss	$	(11,041)		$	(5,843)		$	(6,635)		$	(5,012)		$	(3,588)		$	(2,145)		$	(736)		$	(1,544)
Adjusted EBITDA loss margin	(16.2)		%	(8.2)		%	(8.7)		%	(6.1)		%	(4.4)		%	(2.6)		%	(0.9)		%	(1.9)		%


ThredUp Inc.
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses
(in thousands, except percentages, unaudited)
Three Months Ended	September 30, 2022			December 31, 2022			March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			March 31, 2024			June 30, 2024
Operations, product, and technology	$	38,702		$	33,818		$	38,347		$	39,771		$	40,355		$	38,239		$	41,051		$	38,921
Marketing	14,752			12,999			16,870			18,643			19,406			11,354			13,413			16,053
Sales, general, and administrative	15,232			14,538			16,059			16,030			15,058			15,510			17,573			15,440
Total operating expenses	68,686			61,355			71,276			74,444			74,819			65,103			72,037			70,414
Less: Stock-based compensation expense	(7,177)			(6,059)			(9,391)			(7,628)			(7,888)			(6,775)			(7,211)			(7,009)
Less: Severance and other	(1,809)			14			—			(551)			(507)			(138)			(2,986)			122
Total non-GAAP operating expenses	$	59,700		$	55,310		$	61,885		$	66,265		$	66,424		$	58,190		$	61,840		$	63,527
Non-GAAP operating expenses % of revenue	87.9		%	77.6		%	81.5		%	80.2		%	81.0		%	71.5		%	77.7		%	79.7		%


ThredUp Inc.
Stock-Based Compensation Expense Details
(in thousands, unaudited)
Three Months Ended	September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024
Operations, product, and technology	$	2,480	$	2,193	$	3,671	$	2,913	$	2,858	$	2,625	$	2,571	$	2,867
Marketing	818		767		1,205		923		1,264		392		202		161
Sales, general, and administrative	3,879		3,099		4,515		3,792		3,766		3,758		4,438		3,981
Total stock-based compensation expense	$	7,177	$	6,059	$	9,391	$	7,628	$	7,888	$	6,775	$	7,211	$	7,009


ThredUp Inc.
Severance and Other Reorganization Costs Details
(in thousands, unaudited)
Three Months Ended	September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024
Operations, product, and technology	$	1,260	$	(22)	$	—	$	115	$	148	$	78	$	1,197	$	(94)
Marketing	99		—		—		255		243		59		537		(2)
Sales, general, and administrative	450		8		—		181		116		1		1,252		(26)
Total severance and other reorganization costs	$	1,809	$	(14)	$	—	$	551	$	507	$	138	$	2,986	$	(122)


ThredUp Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
	September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024
Assets:
Current assets:
Cash and cash equivalents	$	68,552	$	56,084	$	50,112	$	44,755
Marketable securities	5,575		8,100		12,399		10,525
Accounts receivable, net	5,993		7,813		6,929		5,888
Inventory	18,173		15,687		11,582		10,313
Other current assets	7,199		6,204		5,834		6,698
Total current assets	105,492		93,888		86,856		78,179
Operating lease right-of-use assets	43,090		42,118		47,138		45,624
Property and equipment, net	90,270		87,672		85,083		82,839
Goodwill	11,455		11,957		11,677		11,608
Intangible assets	8,460		8,156		7,329		6,628
Other assets	6,621		6,176		6,196		6,333
Total assets	$	265,388	$	249,967	$	244,279	$	231,211
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	12,426	$	9,457	$	9,133	$	10,897
Accrued and other current liabilities	40,225		35,934		37,541		34,210
Seller payable	21,516		21,495		21,037		19,182
Operating lease liabilities, current	6,383		5,949		5,517		5,513
Current portion of long-term debt	3,834		3,838		3,843		3,847
Total current liabilities	84,384		76,673		77,071		73,649
Operating lease liabilities, non-current	45,257		44,621		49,750		48,068
Long-term debt, net of current portion	22,968		22,006		21,044		20,080
Other non-current liabilities	3,231		2,750		2,884		2,925
Total liabilities	155,840		146,050		150,749		144,722
Commitments and contingencies
Stockholders’ equity:
Common stock	11		11		11		11
Additional paid-in capital	577,740		585,156		592,193		599,333
Accumulated other comprehensive loss	(3,941)		(2,375)		(3,245)		(3,472)
Accumulated deficit	(464,262)		(478,875)		(495,429)		(509,383)
Total stockholders’ equity	109,548		103,917		93,530		86,489
Total liabilities and stockholders’ equity	$	265,388	$	249,967	$	244,279	$	231,211


ThredUp Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended	September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024
Cash flows from operating activities:
Net loss	$	(18,082)	$	(14,613)	$	(16,554)	$	(13,954)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	5,364		4,851		4,933		4,865
Stock-based compensation expense	7,888		6,775		7,211		7,009
Reduction in carrying amount of right-of-use assets	1,611		1,567		1,667		1,426
Other	(232)		798		28		(719)
Changes in operating assets and liabilities:
Accounts receivable, net	(2,289)		(1,753)		815		1,027
Inventory	1,797		3,082		3,825		1,204
Other current and non-current assets	1,754		125		312		(322)
Accounts payable	3,872		(2,352)		(223)		1,328
Accrued and other current liabilities	(2,581)		(4,761)		1,742		(3,377)
Seller payable	2,057		(46)		(442)		(1,851)
Operating lease liabilities	(1,186)		(1,669)		(1,986)		(1,599)
Other non-current liabilities	250		21		65		(9)
Net cash provided by (used in) operating activities	223		(7,975)		1,393		(4,972)
Cash flows from investing activities:
Purchases of marketable securities	(1,973)		(8,064)		(8,665)		(6,488)
Maturities of marketable securities	22,500		5,600		4,500		8,500
Purchases of property and equipment	(1,483)		(2,209)		(1,620)		(1,170)
Net cash provided by (used in) investing activities	19,044		(4,673)		(5,785)		842
Cash flows from financing activities:

Repayment of debt	(1,000)		(1,000)		(1,000)		(1,000)
Proceeds from issuance of stock-based awards	1,625		1,401		727		1,061
Payment of withholding taxes on stock-based awards	(1,859)		(1,021)		(1,207)		(1,243)
Net cash used in financing activities	(1,234)		(620)		(1,480)		(1,182)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(554)		162		(115)		(45)
Net change in cash, cash equivalents, and restricted cash	17,479		(13,106)		(5,987)		(5,357)
Cash, cash equivalents, and restricted cash, beginning of period	57,096		74,575		61,469		55,482
Cash, cash equivalents, and restricted cash, end of period	$	74,575	$	61,469	$	55,482	$	50,125


ThredUp Inc.
Reconciliation of GAAP Net Cash Provided By (Used In) Operating Activities to Non-GAAP Free Cash Flow
(in thousands, unaudited)
Three Months Ended	September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024
Net cash provided by (used in) operating activities	$	223	$	(7,975)	$	1,393	$	(4,972)
Less: Purchases of property and equipment	(1,483)		(2,209)		(1,620)		(1,170)
Non-GAAP free cash flow	$	(1,260)	$	(10,184)	$	(227)	$	(6,142)


ThredUp Inc.
Geographic Information for Revenue, Gross Profit and Gross Margin
(in thousands, except percentages, unaudited)
Three Months Ended	March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			March 31, 2024			June 30, 2024
Revenue:
U.S.	$	62,244		$	66,720		$	68,084		$	61,447		$	64,533		$	66,717
Europe	13,678			15,938			13,965			19,946			15,055			13,038
Total	$	75,922		$	82,658		$	82,049		$	81,393		$	79,588		$	79,755
Gross Profit:
U.S.	$	46,400		$	50,986		$	53,454		$	47,622		$	51,713		$	52,558
Europe	4,693			4,746			3,173			2,731			3,613			3,562
Total	$	51,093		$	55,732		$	56,627		$	50,353		$	55,326		$	56,120
Gross Margin:
U.S.	74.5		%	76.4		%	78.5		%	77.5		%	80.1		%	78.8		%
Europe	34.3		%	29.8		%	22.7		%	13.7		%	24.0		%	27.3		%

ThredUp Inc.

U.S. Active Buyers

(in millions, unaudited)

Three Months Ended

March 31,
2023

June 30,
2023

September 30,
2023

December 31,
2023

March 31,
2024

June 30,
2024

U.S. Active Buyers

1.330

1.332

1.346

1.357

1.296

1.257

Investors

ir@thredup.com

Media

media@thredup.com

About ThredUp

Forward-Looking Statements

This financial supplement contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “looking ahead,” seeking or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this financial supplement include, but are not limited to, guidance on financial results for the third and the fourth quarters and full year of 2024; statements about the Company’s intention to exit the European market and to seek strategic alternatives for its Remix business; statements about future operating results and our long term growth and the focus of the Company’s resources and attention in the United States; trends, consumer demand and growth in the global and U.S. online resale markets; the momentum of our business; our investments in technology and infrastructure, including with respect to AI technologies; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions, investments or reorganization activities, including our intention to reshape ThredUp into an AI-powered resale company; the impact, including on an annualized basis, of our reduction in corporate expenses and headcount; the success and expansion of our RaaS® model and the timing and plans for future RaaS® clients; and our ability to attract new Active Buyers.

More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The forward-looking statements in this financial supplement are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing ThredUp’s views as of any date subsequent to the date of this financial supplement.

Non-GAAP Financial Measures and Other Operating and Business Metrics

This financial supplement and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA loss, Adjusted EBITDA loss margin, free cash flow, Non-GAAP operating expenses, and other operating and business metrics. In addition to our results determined in accordance with GAAP, we believe that these non-GAAP financial measures and other operating and business metrics are useful in evaluating our operating performance and enhancing an overall understanding of our financial position. We use these measures and metrics to evaluate and assess our operating performance, and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Our non-GAAP financial measures and other operating and business metrics are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP measures and other operating and business metrics used by other companies.

A reconciliation is provided above for Adjusted EBITDA loss to net loss and Non-GAAP operating expenses to total operating expenses, the most directly comparable financial measures stated in accordance with GAAP. We calculate Adjusted EBITDA loss as net loss adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, severance and other reorganization costs, interest expense, provision (benefit) for income taxes, and impairment of non-marketable equity investment. Non-GAAP Adjusted EBITDA loss margin represents Non-GAAP Adjusted EBITDA loss divided by total revenue for the same period. Non-GAAP operating expenses are operating expenses adjusted to exclude stock-based compensation expense and severance and other reorganization costs.

A reconciliation is provided above for Non-GAAP free cash flow to Net cash provided by (used in) operating activities, the most directly comparable financial measure stated in accordance with GAAP. We calculate free cash flow as Net cash provided by (used in) operating activities adjusted to exclude Purchases of property and equipment.

We encourage investors to review our results determined in accordance with GAAP and the accompanying reconciliations for more information.

Orders are defined as the total number of orders placed by buyers across our marketplaces, including through our RaaS® clients, in a given period, net of cancellations.

Cover	Aug. 05, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 05, 2024
Entity Registrant Name	ThredUp Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40249
Entity Tax Identification Number	26-4009181
Entity Address, Address Line One	969 Broadway
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Oakland
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94607
City Area Code	415
Local Phone Number	402-5202
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	TDUP
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Amendment Flag	false
Entity Central Index Key	0001484778
Security Exchange Name	NASDAQ