SEC Filing | ThredUp Inc.

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tdup-20220815

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 15, 2022

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)	(I.R.S. 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

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 15, 2022, ThredUp Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2022. 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 15, 2022
99.2						Supplemental Financial Information dated August 15, 2022
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)

Dated: August 15, 2022

Document

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thredUP Announces Second Quarter 2022 Results

•Quarterly revenue of $76.4 million, representing 27% growth year-over-year.

•Second quarter gross margin of 68.9% and gross profit growth of 19% year-over-year. Record gross margins in our US business of 74.2%.

•Active Buyers of 1.7 million and Orders of 1.7 million in Q2 2022, representing growth of 29% and 40% year-over-year, respectively.

•Published the 10th Annual Resale Report in May, revealing that the U.S. secondhand market is projected to more than double by 2026, reaching $82 billion.

Oakland, CA – August 15, 2022 – ThredUp Inc. (Nasdaq: TDUP), one of the largest online resale platforms for women’s and kids’ apparel, shoes, and accessories, announced today its financial results for the second quarter ended June 30, 2022.

“Demonstrating the flexibility of our model to navigate a highly dynamic environment, we are extremely proud of our Q2 results," said thredUP CEO and co-founder James Reinhart. "As our consumer is faced with an uncertain economic environment and rising costs, we are focused on the variables within our control. We believe our model is uniquely positioned to weather macroeconomic volatility, and are confident that as we re-evaluate our cost base, we can make progress towards profitability and continue to strengthen our position in the growing resale market.”

Second Quarter 2022 Financial Highlights

•Revenue: Total revenue of $76.4 million, an increase of 27% year-over-year.

•Gross Profit and Gross Margin: Gross profit totaled $52.6 million, representing growth of 19% year-over-year. Gross margin was 68.9% as compared to 73.6% in the second quarter last year.

•Net Loss: GAAP net loss was $28.4 million, or 37.2% of revenue, for the second quarter 2022, compared to a GAAP net loss of $14.4 million, or 24.0% of revenue, for the second quarter 2021.

•Adjusted EBITDA and EBITDA Margin: Adjusted EBITDA loss was $13.5 million, or 17.7% of revenue, for the second quarter 2022, compared to the Adjusted EBITDA loss of $9.0 million, or 15.1% of revenue, for the second quarter 2021.

•Active Buyers and Orders: Active Buyers of 1.7 million and Orders of 1.7 million growing 29% and 40%, respectively, over the comparable quarter last year.

Recent Business Highlights

•Resale-as-a-Service® (“RaaS®”): thredUP continues to expand its RaaS program with new clients, including Tommy Hilfiger, PacSun, Bernardo, Ozma, and Oak + Fort.

•Published 10th Annual Resale Report: thredUP released the results of the 2022 Resale Report, showing that the U.S. secondhand market is projected to more than double by 2026, reaching $82 billion. The 10th annual study also includes global market sizing for the first time, a one-time section exploring inflation’s impact on the consumer, and a 10-year anniversary lookback on the last decade in resale.

•Bolstered executive leadership: Noelle Sadler joined as Chief Marketing Officer, bringing extensive ecommerce marketing and merchandising experience to thredUP.

•Founding member of American Circular Textiles (“ACT”) policy group: In partnership with 10 other members of the circular fashion industry, thredUP is a founding member of the ACT policy group, an organization intent on bringing together fashion’s circular community to develop policy around textile recovery and reuse.

Financial Outlook

For the third quarter 2022, thredUP expects:

•Revenue in the range of $64 million to $66 million

•Gross margin in the range of 65% to 67%

•Adjusted EBITDA margin loss in the range of 18% to 16%

For the fourth quarter 2022, thredUP expects:

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

•Gross margin in the range of 64% to 66%

•Adjusted EBITDA margin loss in the range of 10% to 8%

For the full fiscal year 2022, thredUP expects:

•Revenue in the range of $283 million to $287 million

•Gross margin in the range of 67% to 69%

•Adjusted EBITDA margin loss in the range of 16% to 15%

Conference Call and Webcast Information

•Conference Call: The live call is accessible in the U.S. and Canada at +1 888-394-8218 (code 5070223) and outside of the U.S. and Canada at +1 646-828-8193 (code 5070223).

•Webcast: The live and archived webcast and related earnings materials will be available at thredUP’s investor relations website: ir.thredup.com.

ThredUp Inc.

Condensed Consolidated Balance Sheets

(unaudited)


	June 30,		As of	December 31,
	2022			2021
	(in thousands, except par value amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	52,197		$	84,550
Marketable securities	96,326			121,277
Accounts receivable, net	3,368			4,136
Inventory, net	13,941			9,825
Other current assets	11,862			8,625
Total current assets	177,694			228,413
Operating lease right-of-use assets	49,420			39,340
Property and equipment, net	84,045			55,466
Goodwill	11,312			12,238
Intangible assets	11,522			13,854
Other assets	11,905			11,515
Total assets	$	345,898		$	360,826
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,183		$	13,336
Accrued and other current liabilities	48,590			45,253
Seller payable	22,564			19,125
Operating lease liabilities, current	5,014			3,931
Current portion of long-term debt	7,791			7,768
Total current liabilities	100,142			89,413
Operating lease liabilities, non-current	51,497			36,997
Long-term debt, net of current portion	23,705			27,559
Other non-current liabilities	2,625			1,123
Total liabilities	177,969			155,092
Commitments and contingencies
Stockholders’ equity:
Common stock	10			10
Additional paid-in capital	537,760			522,161
Accumulated other comprehensive loss	(5,391)			(1,094)
Accumulated deficit	(364,450)			(315,343)
Total stockholders’ equity	167,929			205,734
Total liabilities and stockholders’ equity	$	345,898		$	360,826

ThredUp Inc.

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands, except per share amounts)
Revenue:
Consignment	$	48,536	$	48,597	$	95,971	$	93,285
Product	27,885		11,362		53,145		22,354
Total revenue	76,421		59,959		149,116		115,639
Cost of revenue:
Consignment	10,218		10,687		20,267		21,519
Product	13,555		5,140		25,973		10,270
Total cost of revenue	23,773		15,827		46,240		31,789
Gross profit	52,648		44,132		102,876		83,850
Operating expenses:
Operations, product and technology	43,961		31,062		83,122		59,374
Marketing	19,640		15,957		36,618		31,403
Sales, general and administrative	17,380		10,999		32,044		21,637
Total operating expenses	80,981		58,018		151,784		112,414
Operating loss	(28,333)		(13,886)		(48,908)		(28,564)
Interest expense	(238)		(573)		(661)		(1,132)
Other income (expense), net	181		93		484		(814)
Loss before provision for income taxes	(28,390)		(14,366)		(49,085)		(30,510)
Provision for income taxes	9		13		22		40
Net loss	$	(28,399)	$	(14,379)	$	(49,107)	$	(30,550)
Net loss per share, basic and diluted	$	(0.29)	$	(0.15)	$	(0.50)	$	(0.54)
Weighted-average shares used in computing net loss per share, basic and diluted	99,331		94,435		98,979		56,777

ThredUp Inc.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands)
Net loss	$	(28,399)	$	(14,379)	$	(49,107)	$	(30,550)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(2,333)		—		(3,041)		—
Unrealized loss on available-for-sale debt securities	(254)		(36)		(1,256)		(36)
Total comprehensive loss	$	(30,986)	$	(14,415)	$	(53,404)	$	(30,586)

ThredUp Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Six Months Ended
	June 30,
	2022		2021
	(in thousands)
Cash flows from operating activities:
Net loss	$	(49,107)	$	(30,550)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6,678		3,899
Stock-based compensation expense	13,581		6,394
Reduction in the carrying amount of right-of-use assets	2,905		2,384
Changes in fair value of convertible preferred stock warrants and others	1,138		1,179
Changes in operating assets and liabilities:
Accounts receivable, net	682		278
Inventory, net	(4,703)		(843)
Other current and non-current assets	(4,799)		(3,364)
Accounts payable	1,954		2,716
Accrued and other current liabilities	749		8,171
Seller payable	3,465		2,985
Operating lease liabilities	2,602		(2,343)
Other non-current liabilities	20		4
Net cash used in operating activities	(24,835)		(9,090)
Cash flows from investing activities:
Purchase of marketable securities	(3,475)		(57,418)
Maturities of marketable securities	26,294		—
Purchase of property and equipment	(27,583)		(8,999)
Net cash used in investing activities	(4,764)		(66,417)
Cash flows from financing activities:
Proceeds from debt issuance	—		4,625
Repayment of debt	(4,000)		—
Proceeds from issuance of Class A common stock, net of underwriting discounts and commissions	—		180,284
Proceeds from stock issued under incentive and purchase plans, net of forfeitures	1,668		2,805
Payment of costs for the initial public offering	—		(3,633)
Net cash provided by (used in) financing activities	(2,332)		184,081
Effect of exchange rate changes on cash and cash equivalents	(521)		—
Net (decrease) increase in cash, cash equivalents and restricted cash	(32,452)		108,574
Cash, cash equivalents and restricted cash:
Beginning of period	91,840		67,539
End of period	$	59,388	$	176,113

ThredUp Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages)

(unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
	(in thousands)
Adjusted EBITDA Reconciliation:
GAAP net loss	$	(28,399)		$	(14,379)		$	(49,107)		$	(30,550)
Depreciation and amortization	3,407			1,861			6,678			3,899
Stock-based compensation expense	10,058			2,896			13,581			6,394
Interest expense	238			573			661			1,132
Acquisition-related expenses	70			—			274			—
Restructuring charges	1,076			—			1,387			—
Change in fair value of convertible preferred stock warrant liability	—			—			—			930
Provision for income taxes	9			13			22			40
Non-GAAP Adjusted EBITDA	$	(13,541)		$	(9,036)		$	(26,504)		$	(18,155)
Adjusted EBITDA margin %	(17.7)		%	(15.1)		%	(17.8)		%	(15.7)		%

Investors

ir@thredup.com

Media

media@thredup.com

About thredUP

thredUP is transforming resale with technology and a mission to inspire a new generation of consumers 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 women's and kids' apparel, shoes and accessories. Sellers love 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 love 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Ⓡ (“RaaSⓇ”), 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 125 million unique secondhand items from 35,000 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” 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 quarter and full year of 2022; statements about future operating results and our long term growth; the momentum of our business; the growth rates in the markets in which we compete; the impact of the COVID-19 pandemic and inflation on consumer behavior and our business; our investments in technology and infrastructure; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions, investments or restructuring activities; the success of our RaaSⓇ model and the timing and plans for future RaaSⓇ clients; and our ability to attract new Active Buyers.

The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2021 and in our Quarterly Report on Form 10-Q that will be filed following this earnings release. 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.

Operating Metrics

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 in our marketplace. A thredUP buyer is identified by a unique email address and 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 marketplace, including through our RaaSⓇ partners, in a given period, net of cancellations.

Non-GAAP Financial Measures

This press release and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe that Adjusted EBITDA and Adjusted EBITDA margin, when taken collectively with our GAAP results, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Adjusted EBITDA and Adjusted EBITDA margin is 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 a similarly-titled non-GAAP measure used by other companies.

A reconciliation is provided above for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. We calculate Adjusted EBITDA as net loss adjusted to exclude, where applicable in a given period, depreciation and amortization, stock-based compensation expense, interest expense, acquisition-related expenses, restructuring charges, change in fair value of convertible preferred stock warrant liability and provision for income taxes.

Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA to net loss. thredUP is not providing a quantitative reconciliation of forward-looking guidance of Adjusted EBITDA 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, depreciation and amortization, stock-based compensation expense, change in fair value of convertible preferred stock warrant liability and provision for income taxes. Accordingly, a reconciliation for Adjusted EBITDA in order to calculate forward-looking Adjusted EBITDA margin is not available without unreasonable effort. However, for the third quarter of 2022 and full year 2022, depreciation and amortization is expected to be $3.9 million and $14.9 million, respectively. In addition, for the third quarter of 2022 and full year 2022, stock-based compensation expense is expected to be $7.7 million and $28.9 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 margin.

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ThredUp Inc.

Second Quarter 2022 Supplemental Financials

Key Financial Metrics for the Quarter

•Revenue of $76.4 million

•vs. $60.0 million in Q2’FY 2021

•Growth of 27.5% Y/Y

•Record gross profit of $52.6 million

•vs. $44.1 million in Q2’FY 2021

•Growth of 19.3% Y/Y

•Gross margin of 68.9%

•vs. 73.6% in Q2’FY 2021

•GAAP net loss of $28.4 million

•vs. net loss $14.4 million in Q2’FY 2021

•Adjusted EBITDA loss of $13.5 million

•vs. loss of $9.0 million in Q2’FY 2021

•Adjusted EBITDA margin loss of 17.7%

•vs. loss of 15.1% in Q2’FY 2021

•Cash, cash equivalents, restricted cash and short-term marketable securities were $155.7 million at the quarter end

•Total quarter Active Buyers of 1.724 million

•vs. 1.341 million in Q2’FY 2021

•An increase of 28.6% Y/Y

•Total Orders of 1.704 million

•vs. 1.218 million in Q2’FY 2021

•An increase of 39.9% Y/Y

Conference Call and Webcast

•The live call is accessible in the U.S. and Canada at +1 888-394-8218 (code 5070223) and outside of the U.S. and Canada at +1 646-828-8193 (code 5070223).

•The live and archived webcast and all related earnings materials will be available at thredUP’s investor relations website: ir.thredup.com

Financial Outlook

For third quarter 2022, thredUP expects:

•Revenue in the range of $64 million to $66 million

•Gross margin in the range of 65% to 67%

•An adjusted EBITDA margin loss in the range of 18% to 16%

•Depreciation and amortization of approximately $3.9 million

•Stock-based compensation of approximately $7.7 million

•Weighted-average shares of approximately 100.4 million

For fourth quarter 2022, thredUP expects:

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

•Gross margin in the range of 64% to 66%

•An adjusted EBITDA margin loss in the range of 10% to 8%

•Depreciation and amortization of approximately $4.3 million

•Stock-based compensation of approximately $7.7 million

•Weighted-average shares of approximately 101.3 million

For fiscal year 2022, thredUP expects:

•Revenue in the range of $283 million to $287 million

•Gross margin in the range of 67% to 69%

•An adjusted EBITDA margin loss in the range of 16% to 15%

•Depreciation and amortization of approximately $14.9 million

•Stock-based compensation of approximately $28.9 million

•Weighted-average shares of approximately 100.0 million


ThredUp Inc.
Condensed Consolidated Income Statements
(in thousands, except percentages, unaudited)
Three Months Ended	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022
Revenue:
Consignment revenue	$	34,914		$	33,657		$	34,211		$	44,688		$	48,597		$	48,071		$	44,758		$	47,435		$	48,536
Product revenue	12,421			13,275			9,222			10,992			11,362			15,203			28,121			25,260			27,885
Total revenue	47,335			46,932			43,433			55,680			59,959			63,274			72,879			72,695			76,421
Cost of revenue:
Cost of consignment revenue	8,297			7,984			9,087			10,832			10,687			10,080			10,257			10,049			10,218
Cost of product revenue	6,027			6,172			4,611			5,130			5,140			7,100			14,434			12,418			13,555
Total cost of revenue	14,324			14,156			13,698			15,962			15,827			17,180			24,691			22,467			23,773
Gross profit	33,011			32,776			29,735			39,718			44,132			46,094			48,188			50,228			52,648
Gross margin % of revenue	69.7		%	69.8		%	68.5		%	71.3		%	73.6		%	72.8		%	66.1		%	69.1		%	68.9		%
Operating expenses:
Operations, product and technology	22,149			25,856			27,928			28,312			31,062			32,081			36,624			39,161			43,961
Marketing	10,898			10,614			10,252			15,446			15,957			16,941			15,281			16,978			19,640
Sales, general and administrative	6,438			6,891			7,802			10,638			10,999			12,569			14,608			14,664			17,380
Total operating expenses	39,485			43,361			45,982			54,396			58,018			61,591			66,513			70,803			80,981
Operating expenses % of revenue	83.4		%	92.4		%	105.9		%	97.7		%	96.8		%	97.3		%	91.3		%	97.4		%	106.0		%
Operating loss	(6,474)			(10,585)			(16,247)			(14,678)			(13,886)			(15,497)			(18,325)			(20,575)			(28,333)
Operating loss % of revenue	(13.7)		%	(22.6)		%	(37.4)		%	(26.4)		%	(23.2)		%	(24.5)		%	(25.1)		%	(28.3)		%	(37.1)		%
Interest and other (expense) income, net	(183)			(419)			(698)			(1,466)			(480)			799			437			(120)			(57)
Loss before provision for income taxes	(6,657)			(11,004)			(16,945)			(16,144)			(14,366)			(14,698)			(17,888)			(20,695)			(28,390)
Provision for income taxes	—			—			56			27			13			17			23			13			9
Net loss	$	(6,657)		$	(11,004)		$	(17,001)		$	(16,171)		$	(14,379)		$	(14,715)		$	(17,911)		$	(20,708)		$	(28,399)
Net loss margin %	(14.1)		%	(23.4)		%	(39.1)		%	(29.0)		%	(24.0)		%	(23.3)		%	(24.6)		%	(28.5)		%	(37.2)		%


ThredUp Inc.
Adjusted EBITDA Reconciliation
(in thousands, except percentages, unaudited)
Three Months Ended	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022
Adjusted EBITDA reconciliation:
GAAP net loss	$	(6,657)		$	(11,004)		$	(17,001)		$	(16,171)		$	(14,379)		$	(14,715)		$	(17,911)		$	(20,708)		$	(28,399)
Add (deduct):
Depreciation and amortization	1,198			1,425			1,713			2,038			1,861			2,248			3,008			3,271			3,407
Stock-based compensation expense	1,966			1,649			2,279			3,498			2,896			2,995			3,570			3,523			10,058
Interest expense	224			368			440			559			573			619			524			423			238
Acquisition and offering related expenses	—			—			—			—			—			1,020			251			204			70
Restructuring charges	—			—			—			—			—			—			—			311			1,076
Change in value of preferred stock warrant	(1)			89			285			930			—			—			—			—			—
Provision for income taxes	—			—			56			27			13			17			23			13			9
Non-GAAP Adjusted EBITDA	$	(3,270)		$	(7,473)		$	(12,228)		$	(9,119)		$	(9,036)		$	(7,816)		$	(10,535)		$	(12,963)		$	(13,541)
Adjusted EBITDA margin %	(6.9)		%	(15.9)		%	(28.2)		%	(16.4)		%	(15.1)		%	(12.4)		%	(14.5)		%	(17.8)		%	(17.7)		%


ThredUp Inc.
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses
(in thousands, except percentages, unaudited)
Three Months Ended	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022
Operations, product and technology	$	22,149		$	25,856		$	27,928		$	28,312		$	31,062		$	32,081		$	36,624		$	39,161		$	43,961
Marketing	10,898			10,614			10,252			15,446			15,957			16,941			15,281			16,978			19,640
Sales, general and administrative	6,438			6,891			7,802			10,638			10,999			12,569			14,608			14,664			17,380
Total operating expenses	39,485			43,361			45,982			54,396			58,018			61,591			66,513			70,803			80,981
Less: Total stock-based compensation	1,966			1,649			2,279			3,498			2,896			2,995			3,570			3,523			10,058
Total non-GAAP operating expenses	$	37,519		$	41,712		$	43,703		$	50,898		$	55,122		$	58,596		$	62,943		$	67,280		$	70,923
Non-GAAP operating expenses as a % of revenue	79.3		%	88.9		%	100.6		%	91.4		%	91.9		%	92.6		%	86.4		%	92.6		%	92.8		%


ThredUp Inc.
Stock-Based Compensation Details
(in thousands, unaudited)
Three Months Ended	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022
Stock-based compensation
Operations, product and technology	$	870	$	987	$	1,167	$	1,350	$	984	$	1,024	$	883	$	1,392	$	3,970
Marketing	283		278		332		437		289		341		338		333		1,226
Sales, general and administrative	813		384		780		1,711		1,623		1,630		2,349		1,798		4,862
Total	$	1,966	$	1,649	$	2,279	$	3,498	$	2,896	$	2,995	$	3,570	$	3,523	$	10,058


ThredUp Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
	June 30, 2021		September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022
Assets:
Current assets:
Cash and cash equivalents	$	173,058	$	160,912	$	84,550	$	68,597	$	52,197
Marketable securities	57,382		100,762		121,277		115,189		96,326
Accounts receivable, net	1,545		1,895		4,136		2,971		3,368
Inventory, net	4,362		4,106		9,825		12,025		13,941
Other current assets	6,425		7,773		8,625		9,634		11,862
Total current assets	242,772		275,448		228,413		208,416		177,694
Operating lease right-of-use assets	21,272		20,455		39,340		42,937		49,420
Property and equipment, net	45,490		49,451		55,466		73,132		84,045
Goodwill	—		—		12,238		12,043		11,312
Intangible assets	—		—		13,854		12,942		11,522
Other assets	2,837		4,864		11,515		11,558		11,905
Total assets	$	312,371	$	350,218	$	360,826	$	361,028	$	345,898
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	11,359	$	8,407	$	13,336	$	19,529	$	16,183
Accrued and other current liabilities	39,515		46,427		45,253		50,970		48,590
Seller payable	16,709		18,306		19,125		20,640		22,564
Operating lease liabilities, current	2,845		2,757		3,931		4,433		5,014
Current portion of long-term debt	7,746		7,757		7,768		7,780		7,791
Total current liabilities	78,174		83,654		89,413		103,352		100,142
Operating lease liabilities, non-current	20,029		19,225		36,997		42,030		51,497
Long-term debt, net of current portion	31,393		29,478		27,559		25,634		23,705
Other non-current liabilities	1,937		2,187		1,123		2,324		2,625
Total liabilities	131,533		134,544		155,092		173,340		177,969
Stockholders’ equity:
Common stock	9		10		10		10		10
Additional paid-in capital	463,582		513,124		522,161		526,533		537,760
Accumulated other comprehensive loss	(36)		(28)		(1,094)		(2,804)		(5,391)
Accumulated deficit	(282,717)		(297,432)		(315,343)		(336,051)		(364,450)
Total stockholder's equity	180,838		215,674		205,734		187,688		167,929
Total liabilities and stockholders’ equity	$	312,371	$	350,218	$	360,826	$	361,028	$	345,898


ThredUp Inc.
Condensed Consolidated Cash Flows
(in thousands, unaudited)
Three Months Ended	June 30, 2021		September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022
Cash flows from operating activities:
Net loss	$	(14,379)	$	(14,715)	$	(17,911)	$	(20,708)	$	(28,399)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,861		2,248		3,008		3,271		3,407
Stock-based compensation expense	2,896		2,995		3,570		3,523		10,058
Reduction of the carrying amount of right-of-use assets	1,066		817		784		1,398		1,507
Changes in fair value of convertible preferred stock warrants and others	131		589		574		481		657
Changes in operating assets and liabilities:
Accounts receivable, net	181		(350)		(1,117)		1,143		(461)
Inventory, net	(880)		256		(2,154)		(2,313)		(2,390)
Other current and non-current assets	(2,907)		(1,356)		(1,606)		(2,162)		(2,637)
Accounts payable	(2,006)		(2,142)		297		1,601		353
Accrued and other current liabilities	3,387		5,911		(4,831)		4,912		(4,163)
Seller payable	1,515		1,597		490		1,521		1,944
Operating lease liabilities	(1,032)		(892)		(729)		539		2,063
Other non-current liabilities	—		—		(1,262)		115		(95)
Net cash used in operating activities	(10,167)		(5,042)		(20,887)		(6,679)		(18,156)
Cash flows from investing activities:
Purchases of marketable securities	(57,418)		(45,297)		(22,502)		—		(3,475)
Purchases of non-marketable equity investment	—		—		(3,750)		—		—
Acquisition of business, net of cash acquired	—		—		(23,581)		—		—
Purchase of property and equipment	(4,900)		(6,208)		(4,621)		(12,638)		(14,945)
Maturities of marketable securities	—		1,600		1,200		4,726		21,568
Net cash (used in) provided by investing activities	(62,318)		(49,905)		(53,254)		(7,912)		3,148
Cash flows from financing activities:
Proceeds from debt issuances	—		—		—		—		—
Repayment of debt	—		(2,000)		(2,000)		(2,000)		(2,000)
Proceeds from issuance of Class A common stock upon initial public offering and the follow-on offering, net of underwriting discounts and commissions	—		46,621		—		—		—
Stock issued under incentive and purchase plans, net of forfeitures	930		948		2,406		809		859
Payment of costs for the initial public offering and follow-on offering	(1,900)		(618)		(478)		—		—
Net cash (used in) provided by financing activities	(970)		44,951		(72)		(1,191)		(1,141)
Effect of exchange rate changes on cash and cash equivalents	—		—		(64)		(172)		(349)
Net decrease in cash, cash equivalents and restricted cash	(73,455)		(9,996)		(74,277)		(15,954)		(16,498)
Cash, cash equivalents and restricted cash:
Beginning of period	249,568		176,113		166,117		91,840		75,886
End of period	$	176,113	$	166,117	$	91,840	$	75,886	$	59,388

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” 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 quarter and full year of 2022; statements about future operating results and our long term growth; the momentum of our business; the growth rates in the markets in which we compete; the impact of the COVID-19 pandemic and inflation on consumer behavior and our business; our investments in technology and infrastructure; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions, investments or restructuring activities; the success of our RaaSⓇ model and the timing and plans for future RaaSⓇ clients; and our ability to attract new Active Buyers.

The forward-looking statements contained in this financial supplement are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q that will be filed following this financial supplement. 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.

Operating Metrics

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

Non-GAAP Financial Measures

This financial supplement contains non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe that Adjusted EBITDA and Adjusted EBITDA margin, when taken collectively with our GAAP results, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Adjusted EBITDA and Adjusted EBITDA margin is 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 a similarly-titled non-GAAP measure used by other companies.

A reconciliation is provided above for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. We calculate Adjusted EBITDA as net loss adjusted to exclude, where applicable in a given period, depreciation and amortization, stock-based compensation expense, interest expense, acquisition and offering related expenses, restructuring charges, change in fair value of convertible preferred stock warrant liability and provision for income taxes.