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): November 6, 2023
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 November 6, 2023, ThredUp Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2023. 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 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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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: November 6, 2023
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Exhibit 99.1
•Quarterly revenue of $82.0 million, representing an increase of 21% year-over-year.
•U.S. business reached quarterly adjusted EBITDA breakeven for first time in company’s history.
•Third quarter gross margin of 69.0% and an increase in gross profit of 27% year-over-year.
•Record Active Buyers of 1.8 million and Orders of 1.8 million in Q3 2023, representing an increase of 4% and an increase of 11%, respectively, year-over-year.
•Continue to grow its Resale-as-a-Service (RaaS) client roster, launching new programs with Beyond Yoga, Smartwool, and Journeys.
•Recognized as one of TIME 100's Most Influential Companies of 2023 and Digiday's WorkLife 50 Awards.
Oakland, CA — November 6, 2023 — 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 third quarter ended September 30, 2023.
"We achieved another quarter of strong financial performance, in the face of a highly dynamic environment," said thredUP CEO and co-founder James Reinhart. "Despite this backdrop, thredUP is executing at a high level, and we plan to carry that momentum into 2024."
Third Quarter 2023 Financial Highlights
•Revenue: Total revenue of $82.0 million, an increase of 21% year-over-year.
•Gross Profit and Gross Margin: Gross profit totaled $56.6 million, representing an increase of 27% year-over-year. Gross margin was 69.0% as compared to 65.5% for the third quarter 2022.
•Net Loss: Net loss was $18.1 million, or a negative 22.0% of revenue, for the third quarter 2023, compared to a net loss of $23.7 million, or a negative 34.8% of revenue, for the third quarter 2022.
•Adjusted EBITDA Loss and EBITDA Loss Margin1: Adjusted EBITDA loss was $3.6 million, or a negative 4.4% of revenue, for the third quarter 2023, compared to an Adjusted EBITDA loss of $11.0 million, or a negative 16.2% of revenue, for the third quarter 2022.
•Active Buyers and Orders: Active Buyers of 1.8 million and Orders of 1.8 million, representing an increase of 4% and an increase of 11%, respectively, over the comparable quarter last year.
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 to the most directly comparable GAAP measure and “Non-GAAP Financial Measures” for a discussion of why we believe these non-GAAP measures are useful.
1
Recent Business Highlights
•Resale-as-a-Service® (“RaaS®”): thredUP continued to grow its RaaS client roster, launching new resale programs with Beyond Yoga, Smartwool, and Journeys.
•Thrift Promise Improves Retention: Thrift Promise envisions a customer journey that aims to achieve the highest levels of customer satisfaction on thredUP. As a result, we reduced our Q3 return rate and generated millions of dollars in logistics cost savings.
•Industry Honors and Recognition: thredUP was named to TIME100's Most Influential Companies of 2023 for its environmental impact and Digiday’s WorkLife50 Award for its exemplary workplace and company culture.
Financial Outlook
For the fourth quarter 2023, thredUP expects:
•Revenue in the range of $79.0 million to $81.0 million
•Gross margin in the range of 61.0% to 63.0%
•Adjusted EBITDA loss margin in the range of 2.0% to 0.0%
For the full fiscal year 2023, thredUP expects:
•Revenue in the range of $319.5 million to $321.5 million
•Gross margin in the range of 66.2% to 66.7%
•Adjusted EBITDA loss margin in the range of 5.3% to 4.7%
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.
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ThredUp Inc.
Condensed Consolidated Balance Sheets
(unaudited)
| September 30, 2023 | December 31, 2022 | |||||||||||||
| (in thousands) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 68,552 | $ | 38,029 | ||||||||||
| Marketable securities | 5,575 | 66,902 | ||||||||||||
| Accounts receivable, net | 5,993 | 4,669 | ||||||||||||
| Inventory | 18,173 | 17,519 | ||||||||||||
| Other current assets | 7,199 | 7,076 | ||||||||||||
| Total current assets | 105,492 | 134,195 | ||||||||||||
| Operating lease right-of-use assets | 43,090 | 46,153 | ||||||||||||
| Property and equipment, net | 90,270 | 92,482 | ||||||||||||
| Goodwill | 11,455 | 11,592 | ||||||||||||
| Intangible assets | 8,460 | 10,499 | ||||||||||||
| Other assets | 6,621 | 7,027 | ||||||||||||
| Total assets | $ | 265,388 | $ | 301,948 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 12,426 | $ | 7,800 | ||||||||||
| Accrued and other current liabilities | 40,225 | 50,155 | ||||||||||||
| Seller payable | 21,516 | 16,166 | ||||||||||||
| Operating lease liabilities, current | 6,383 | 6,413 | ||||||||||||
| Current portion of long-term debt | 3,834 | 3,879 | ||||||||||||
| Total current liabilities | 84,384 | 84,413 | ||||||||||||
| Operating lease liabilities, non-current | 45,257 | 48,727 | ||||||||||||
| Long-term debt, net of current portion | 22,968 | 25,788 | ||||||||||||
| Other non-current liabilities | 3,231 | 3,019 | ||||||||||||
| Total liabilities | 155,840 | 161,947 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Common stock | 11 | 10 | ||||||||||||
| Additional paid-in capital | 577,740 | 551,852 | ||||||||||||
| Accumulated other comprehensive loss | (3,941) | (4,234) | ||||||||||||
| Accumulated deficit | (464,262) | (407,627) | ||||||||||||
| Total stockholders’ equity | 109,548 | 140,001 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 265,388 | $ | 301,948 | ||||||||||
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ThredUp Inc.
Condensed Consolidated Statements of Operations
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||
| Consignment | $ | 57,838 | $ | 41,553 | $ | 157,732 | $ | 137,524 | ||||||||||||||||||
| Product | 24,211 | 26,392 | 82,897 | 79,537 | ||||||||||||||||||||||
| Total revenue | 82,049 | 67,945 | 240,629 | 217,061 | ||||||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||||||||
| Consignment | 10,131 | 9,087 | 28,931 | 29,354 | ||||||||||||||||||||||
| Product | 15,291 | 14,362 | 48,246 | 40,335 | ||||||||||||||||||||||
| Total cost of revenue | 25,422 | 23,449 | 77,177 | 69,689 | ||||||||||||||||||||||
| Gross profit | 56,627 | 44,496 | 163,452 | 147,372 | ||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Operations, product, and technology | 40,355 | 38,702 | 118,473 | 121,824 | ||||||||||||||||||||||
| Marketing | 19,406 | 14,752 | 54,919 | 51,370 | ||||||||||||||||||||||
| Sales, general, and administrative | 15,058 | 15,232 | 47,147 | 47,276 | ||||||||||||||||||||||
| Total operating expenses | 74,819 | 68,686 | 220,539 | 220,470 | ||||||||||||||||||||||
| Operating loss | (18,192) | (24,190) | (57,087) | (73,098) | ||||||||||||||||||||||
| Interest expense | 732 | 103 | 1,530 | 764 | ||||||||||||||||||||||
| Other income, net | (845) | (624) | (2,006) | (1,108) | ||||||||||||||||||||||
| Loss before provision for income taxes | (18,079) | (23,669) | (56,611) | (72,754) | ||||||||||||||||||||||
| Provision for income taxes | 3 | 9 | 24 | 31 | ||||||||||||||||||||||
| Net loss | $ | (18,082) | $ | (23,678) | $ | (56,635) | $ | (72,785) | ||||||||||||||||||
| Loss per share, basic and diluted | $ | (0.17) | $ | (0.24) | $ | (0.54) | $ | (0.73) | ||||||||||||||||||
| Weighted-average shares used in computing loss per share, basic and diluted | 105,898 | 100,253 | 103,918 | 99,409 | ||||||||||||||||||||||
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ThredUp Inc.
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Net loss | $ | (18,082) | $ | (23,678) | $ | (56,635) | $ | (72,785) | ||||||||||||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | (1,080) | (2,217) | (772) | (5,258) | ||||||||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities | 152 | (28) | 1,065 | (1,284) | ||||||||||||||||||||||
| Total other comprehensive income (loss) | (928) | (2,245) | 293 | (6,542) | ||||||||||||||||||||||
| Total comprehensive loss | $ | (19,010) | $ | (25,923) | $ | (56,342) | $ | (79,327) | ||||||||||||||||||
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ThredUp Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Nine Months Ended | ||||||||||||||
| September 30, 2023 | September 30, 2022 | |||||||||||||
| (in thousands) | ||||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | (56,635) | $ | (72,785) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
| Depreciation and amortization | 13,881 | 10,217 | ||||||||||||
| Stock-based compensation expense | 24,907 | 20,758 | ||||||||||||
| Reduction in carrying amount of right-of-use assets | 4,788 | 4,820 | ||||||||||||
| Other | 59 | 1,409 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Accounts receivable, net | (1,373) | 795 | ||||||||||||
| Inventory | (873) | (6,222) | ||||||||||||
| Other current and non-current assets | 1,055 | (1,732) | ||||||||||||
| Accounts payable | 4,049 | (3,000) | ||||||||||||
| Accrued and other current liabilities | (4,331) | 6,918 | ||||||||||||
| Seller payable | 5,358 | (380) | ||||||||||||
| Operating lease liabilities | (5,426) | 2,396 | ||||||||||||
| Other non-current liabilities | (75) | (133) | ||||||||||||
| Net cash used in operating activities | (14,616) | (36,939) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Purchases of marketable securities | (9,851) | (3,475) | ||||||||||||
| Maturities of marketable securities | 71,979 | 35,830 | ||||||||||||
| Purchases of property and equipment | (13,775) | (39,316) | ||||||||||||
| Net cash provided by (used in) investing activities | 48,353 | (6,961) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from debt, net of discount | — | 491 | ||||||||||||
| Repayment of debt | (3,000) | (5,333) | ||||||||||||
| Proceeds from issuance of stock-based awards | 3,761 | 3,878 | ||||||||||||
| Payment of withholding taxes on stock-based awards | (3,744) | (1,958) | ||||||||||||
| Net cash used in financing activities | (2,983) | (2,922) | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (230) | (918) | ||||||||||||
| Net change in cash, cash equivalents, and restricted cash | 30,524 | (47,740) | ||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 44,051 | 91,840 | ||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 74,575 | $ | 44,100 | ||||||||||
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ThredUp Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Net loss | $ | (18,082) | $ | (23,678) | $ | (56,635) | $ | (72,785) | ||||||||||||||||||
| Interest expense | 732 | 103 | 1,530 | 764 | ||||||||||||||||||||||
| Provision for income taxes | 3 | 9 | 24 | 31 | ||||||||||||||||||||||
| Depreciation and amortization | 5,364 | 3,539 | 13,881 | 10,217 | ||||||||||||||||||||||
| Stock-based compensation expense | 7,888 | 7,177 | 24,907 | 20,758 | ||||||||||||||||||||||
| Severance and other | 507 | 1,809 | 1,058 | 3,470 | ||||||||||||||||||||||
| Non-GAAP Adjusted EBITDA loss | $ | (3,588) | $ | (11,041) | $ | (15,235) | $ | (37,545) | ||||||||||||||||||
| Total revenue | 82,049 | 67,945 | 240,629 | 217,061 | ||||||||||||||||||||||
| Non-GAAP Adjusted EBITDA loss margin | (4.4) | % | (16.2) | % | (6.3) | % | (17.3) | % | ||||||||||||||||||
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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 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, 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 172 million unique secondhand items from 55,000 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 fourth quarter and full year of 2023; 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 inflationary pressures, increased interest rates, climate change and general global economic uncertainty 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 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 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.
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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 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.
Non-GAAP Financial Measures
This press release and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA loss and Adjusted EBITDA loss margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA loss and Adjusted EBITDA loss margin, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA loss and Adjusted EBITDA loss 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 loss and Adjusted EBITDA loss margin, 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. Adjusted EBITDA loss and Adjusted EBITDA loss margin 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 used by other companies.
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, interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, and severance and other.
Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA loss to net loss. thredUP is not providing a quantitative reconciliation of forward-looking guidance of 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, 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 loss in order to calculate forward-looking Adjusted EBITDA loss margin is not available without unreasonable effort. However, for the fourth quarter of 2023 and full year 2023, depreciation and amortization is expected to be $4.8 million and $18.7 million, respectively. In addition, for the fourth quarter of 2023 and full year 2023, stock-based compensation expense is expected to be $7.7 million and $32.6 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.
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Exhibit 99.2
ThredUp Inc.
Third Quarter 2023 Supplemental Financials
Key Financial Metrics for the Quarter
•Revenue of $82.0 million
◦vs. $67.9 million in 3Q22
◦Growth of 20.8% YoY
•Gross profit of $56.6 million
◦vs. $44.5 million in 3Q22
◦Growth of 27.3% YoY
•Gross margin of 69.0%
◦vs. 65.5% in 3Q22
•GAAP net loss of $18.1 million
◦vs. net loss of $23.7 million in 3Q22
•Adjusted EBITDA loss of $3.6 million
◦vs. loss of $11.0 million in 3Q22
•Adjusted EBITDA loss margin of 4.4%
◦vs. loss margin of 16.2% in 3Q22
•Cash, cash equivalents, restricted cash and short-term marketable securities were $80.2 million at the quarter end
•Total quarter Active Buyers of 1.763 million
◦vs. 1.694 million in 3Q22
◦A decrease of 4.1% YoY
•Total Orders of 1.803 million
◦vs. 1.618 million in 3Q22
◦An increase of 11.4% YoY
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.
Financial Outlook
For fourth quarter 2023, thredUP expects:
•Revenue in the range of $79 million to $81 million
•Gross margin in the range of 61.0% to 63.0%
•Adjusted EBITDA loss margin in the range of 2.0% to 0.0%
•Depreciation and amortization of approximately $4.8 million
•Stock-based compensation of approximately $7.7 million
•Weighted-average shares of approximately 108 million
For fiscal year 2023, thredUP expects:
•Revenue in the range of $319.5 million to $321.5 million
•Gross margin in the range of 66.2% to 66.7%
•Adjusted EBITDA loss margin in the range of 5.3% to 4.7%
•Depreciation and amortization of approximately $18.7 million
•Stock-based compensation of approximately $32.6 million
•Weighted-average shares of approximately 105 million
1
| ThredUp Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages, unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consignment | $ | 44,758 | $ | 47,435 | $ | 48,536 | $ | 41,553 | $ | 37,470 | $ | 46,479 | $ | 53,415 | $ | 57,838 | ||||||||||||||||||||||||||||||||||
| Product | 28,121 | 25,260 | 27,885 | 26,392 | 33,848 | 29,443 | 29,243 | 24,211 | ||||||||||||||||||||||||||||||||||||||||||
| Total revenue | 72,879 | 72,695 | 76,421 | 67,945 | 71,318 | 75,922 | 82,658 | 82,049 | ||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consignment | 10,257 | 10,049 | 10,218 | 9,087 | 7,661 | 9,220 | 9,580 | 10,131 | ||||||||||||||||||||||||||||||||||||||||||
| Product | 14,434 | 12,418 | 13,555 | 14,362 | 18,691 | 15,609 | 17,346 | 15,291 | ||||||||||||||||||||||||||||||||||||||||||
| Total cost of revenue | 24,691 | 22,467 | 23,773 | 23,449 | 26,352 | 24,829 | 26,926 | 25,422 | ||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 48,188 | 50,228 | 52,648 | 44,496 | 44,966 | 51,093 | 55,732 | 56,627 | ||||||||||||||||||||||||||||||||||||||||||
| Gross margin % of revenue | 66.1 | % | 69.1 | % | 68.9 | % | 65.5 | % | 63.1 | % | 67.3 | % | 67.4 | % | 69.0 | % | ||||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Operations, product and technology | 36,624 | 39,161 | 43,961 | 38,702 | 33,818 | 38,347 | 39,771 | 40,355 | ||||||||||||||||||||||||||||||||||||||||||
| Marketing | 15,281 | 16,978 | 19,640 | 14,752 | 12,999 | 16,870 | 18,643 | 19,406 | ||||||||||||||||||||||||||||||||||||||||||
| Sales, general and administrative | 14,608 | 14,664 | 17,380 | 15,232 | 14,538 | 16,059 | 16,030 | 15,058 | ||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 66,513 | 70,803 | 80,981 | 68,686 | 61,355 | 71,276 | 74,444 | 74,819 | ||||||||||||||||||||||||||||||||||||||||||
| Operating expenses % of revenue | 91.3 | % | 97.4 | % | 106.0 | % | 101.1 | % | 86.0 | % | 93.9 | % | 90.1 | % | 91.2 | % | ||||||||||||||||||||||||||||||||||
| Operating loss | (18,325) | (20,575) | (28,333) | (24,190) | (16,389) | (20,183) | (18,712) | (18,192) | ||||||||||||||||||||||||||||||||||||||||||
| Operating loss % of revenue | (25.1) | % | (28.3) | % | (37.1) | % | (35.6) | % | (23.0) | % | (26.6) | % | (22.6) | % | (22.6) | % | ||||||||||||||||||||||||||||||||||
| Interest expense | 524 | 423 | 238 | 103 | 41 | 77 | 721 | 732 | ||||||||||||||||||||||||||||||||||||||||||
| Other expense (income), net | (961) | (303) | (181) | (624) | 3,065 | (476) | (685) | (845) | ||||||||||||||||||||||||||||||||||||||||||
| Loss before provision for income taxes | (17,888) | (20,695) | (28,390) | (23,669) | (19,495) | (19,784) | (18,748) | (18,079) | ||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 23 | 13 | 9 | 9 | 4 | 9 | 12 | 3 | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | $ | (17,911) | $ | (20,708) | $ | (28,399) | $ | (23,678) | $ | (19,499) | $ | (19,793) | $ | (18,760) | $ | (18,082) | ||||||||||||||||||||||||||||||||||
| Net loss margin | (24.6) | % | (28.5) | % | (37.2) | % | (34.8) | % | (27.3) | % | (26.1) | % | (22.7) | % | (22.0) | % | ||||||||||||||||||||||||||||||||||
2
| ThredUp Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA Reconciliation | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages, unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | $ | (17,911) | $ | (20,708) | $ | (28,399) | $ | (23,678) | $ | (19,499) | $ | (19,793) | $ | (18,760) | $ | (18,082) | ||||||||||||||||||||||||||||||||||
| Interest expense | 524 | 423 | 238 | 103 | 41 | 77 | 721 | 732 | ||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 23 | 13 | 9 | 9 | 4 | 9 | 12 | 3 | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 3,008 | 3,271 | 3,407 | 3,539 | 3,816 | 3,681 | 4,836 | 5,364 | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 3,570 | 3,523 | 10,058 | 7,177 | 6,059 | 9,391 | 7,628 | 7,888 | ||||||||||||||||||||||||||||||||||||||||||
| Acquisition and offering-related expenses | 251 | 204 | 70 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Severance and other | — | 311 | 1,076 | 1,809 | (14) | — | 551 | 507 | ||||||||||||||||||||||||||||||||||||||||||
| Impairment of non-marketable equity investment | — | — | — | — | 3,750 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA loss | $ | (10,535) | $ | (12,963) | $ | (13,541) | $ | (11,041) | $ | (5,843) | $ | (6,635) | $ | (5,012) | $ | (3,588) | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA loss margin | (14.5) | % | (17.8) | % | (17.7) | % | (16.2) | % | (8.2) | % | (8.7) | % | (6.1) | % | (4.4) | % | ||||||||||||||||||||||||||||||||||
3
| ThredUp Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages, unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||
| Operations, product, and technology | $ | 36,624 | $ | 39,161 | $ | 43,961 | $ | 38,702 | $ | 33,818 | $ | 38,347 | $ | 39,771 | $ | 40,355 | ||||||||||||||||||||||||||||||||||
| Marketing | 15,281 | 16,978 | 19,640 | 14,752 | 12,999 | 16,870 | 18,643 | 19,406 | ||||||||||||||||||||||||||||||||||||||||||
| Sales, general, and administrative | 14,608 | 14,664 | 17,380 | 15,232 | 14,538 | 16,059 | 16,030 | 15,058 | ||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 66,513 | 70,803 | 80,981 | 68,686 | 61,355 | 71,276 | 74,444 | 74,819 | ||||||||||||||||||||||||||||||||||||||||||
| Less: Stock-based compensation expense | (3,570) | (3,523) | (10,058) | (7,177) | (6,059) | (9,391) | (7,628) | (7,888) | ||||||||||||||||||||||||||||||||||||||||||
| Total non-GAAP operating expenses | $ | 62,943 | $ | 67,280 | $ | 70,923 | $ | 61,509 | $ | 55,296 | $ | 61,885 | $ | 66,816 | $ | 66,931 | ||||||||||||||||||||||||||||||||||
| Non-GAAP operating expenses % of revenue | 86.4 | % | 92.6 | % | 92.8 | % | 90.5 | % | 77.5 | % | 81.5 | % | 80.8 | % | 81.6 | % | ||||||||||||||||||||||||||||||||||
| ThredUp Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation Expense Details | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||
| Operations, product, and technology | $ | 883 | $ | 1,392 | $ | 3,970 | $ | 2,480 | $ | 2,193 | $ | 3,671 | $ | 2,913 | $ | 2,858 | ||||||||||||||||||||||||||||||||||
| Marketing | 338 | 333 | 1,226 | 818 | 767 | 1,205 | 923 | 1,264 | ||||||||||||||||||||||||||||||||||||||||||
| Sales, general, and administrative | 2,349 | 1,798 | 4,862 | 3,879 | 3,099 | 4,515 | 3,792 | 3,766 | ||||||||||||||||||||||||||||||||||||||||||
| Total stock-based compensation expense | $ | 3,570 | $ | 3,523 | $ | 10,058 | $ | 7,177 | $ | 6,059 | $ | 9,391 | $ | 7,628 | $ | 7,888 | ||||||||||||||||||||||||||||||||||
4
| ThredUp Inc. | ||||||||||||||||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||||||||||||
| December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 38,029 | $ | 50,739 | $ | 51,073 | $ | 68,552 | ||||||||||||||||||
| Marketable securities | 66,902 | 42,733 | 25,856 | 5,575 | ||||||||||||||||||||||
| Accounts receivable, net | 4,669 | 4,232 | 3,782 | 5,993 | ||||||||||||||||||||||
| Inventory | 17,519 | 20,933 | 20,362 | 18,173 | ||||||||||||||||||||||
| Other current assets | 7,076 | 6,338 | 8,238 | 7,199 | ||||||||||||||||||||||
| Total current assets | 134,195 | 124,975 | 109,311 | 105,492 | ||||||||||||||||||||||
| Operating lease right-of-use assets | 46,153 | 45,180 | 45,265 | 43,090 | ||||||||||||||||||||||
| Property and equipment, net | 92,482 | 95,806 | 93,786 | 90,270 | ||||||||||||||||||||||
| Goodwill | 11,592 | 11,805 | 11,756 | 11,455 | ||||||||||||||||||||||
| Intangible assets | 10,499 | 10,044 | 9,346 | 8,460 | ||||||||||||||||||||||
| Other assets | 7,027 | 6,960 | 6,867 | 6,621 | ||||||||||||||||||||||
| Total assets | $ | 301,948 | $ | 294,770 | $ | 276,331 | $ | 265,388 | ||||||||||||||||||
| Liabilities and Stockholders’ Equity: | ||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||
| Accounts payable | $ | 7,800 | $ | 12,747 | $ | 8,780 | $ | 12,426 | ||||||||||||||||||
| Accrued and other current liabilities | 50,155 | 47,976 | 43,334 | 40,225 | ||||||||||||||||||||||
| Seller payable | 16,166 | 17,868 | 19,471 | 21,516 | ||||||||||||||||||||||
| Operating lease liabilities, current | 6,413 | 5,792 | 5,834 | 6,383 | ||||||||||||||||||||||
| Current portion of long-term debt | 3,879 | 3,882 | 3,830 | 3,834 | ||||||||||||||||||||||
| Total current liabilities | 84,413 | 88,265 | 81,249 | 84,384 | ||||||||||||||||||||||
| Operating lease liabilities, non-current | 48,727 | 47,521 | 47,356 | 45,257 | ||||||||||||||||||||||
| Long-term debt, net of current portion | 25,788 | 24,831 | 23,928 | 22,968 | ||||||||||||||||||||||
| Other non-current liabilities | 3,019 | 3,066 | 3,200 | 3,231 | ||||||||||||||||||||||
| Total liabilities | 161,947 | 163,683 | 155,733 | 155,840 | ||||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||||||||
| Common stock | 10 | 10 | 11 | 11 | ||||||||||||||||||||||
| Additional paid-in capital | 551,852 | 561,577 | 569,780 | 577,740 | ||||||||||||||||||||||
| Accumulated other comprehensive loss | (4,234) | (3,080) | (3,013) | (3,941) | ||||||||||||||||||||||
| Accumulated deficit | (407,627) | (427,420) | (446,180) | (464,262) | ||||||||||||||||||||||
| Total stockholders’ equity | 140,001 | 131,087 | 120,598 | 109,548 | ||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 301,948 | $ | 294,770 | $ | 276,331 | $ | 265,388 | ||||||||||||||||||
5
| ThredUp Inc. | ||||||||||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | ||||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||||||
| Net loss | $ | (19,499) | $ | (19,793) | $ | (18,760) | $ | (18,082) | ||||||||||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||||
| Depreciation and amortization | 3,816 | 3,681 | 4,836 | 5,364 | ||||||||||||||||||||||
| Stock-based compensation expense | 6,059 | 9,391 | 7,628 | 7,888 | ||||||||||||||||||||||
| Reduction in carrying amount of right-of-use assets | 1,653 | 1,207 | 1,970 | 1,611 | ||||||||||||||||||||||
| Other | 4,184 | 41 | 250 | (232) | ||||||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||||||||
| Accounts receivable, net | (1,325) | 1,010 | (94) | (2,289) | ||||||||||||||||||||||
| Inventory | (1,664) | (3,157) | 487 | 1,797 | ||||||||||||||||||||||
| Other current and non-current assets | 2,625 | 22 | (721) | 1,754 | ||||||||||||||||||||||
| Accounts payable | (985) | 4,102 | (3,925) | 3,872 | ||||||||||||||||||||||
| Accrued and other current liabilities | (5,166) | (1,851) | 101 | (2,581) | ||||||||||||||||||||||
| Seller payable | (2,565) | 1,696 | 1,605 | 2,057 | ||||||||||||||||||||||
| Operating lease liabilities | (1,472) | (2,062) | (2,178) | (1,186) | ||||||||||||||||||||||
| Other non-current liabilities | (827) | 1,255 | (1,580) | 250 | ||||||||||||||||||||||
| Net cash provided by (used in) operating activities | (15,166) | (4,458) | (10,381) | 223 | ||||||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||||||
| Purchases of marketable securities | — | — | (7,878) | (1,973) | ||||||||||||||||||||||
| Maturities of marketable securities | 19,820 | 24,579 | 24,900 | 22,500 | ||||||||||||||||||||||
| Purchases of property and equipment | (3,935) | (5,679) | (6,613) | (1,483) | ||||||||||||||||||||||
| Net cash provided by (used in) investing activities | 15,885 | 18,900 | 10,409 | 19,044 | ||||||||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||||||
| Proceeds from debt, net of discount | (100) | — | — | — | ||||||||||||||||||||||
| Repayment of debt | (1,000) | (1,000) | (1,000) | (1,000) | ||||||||||||||||||||||
| Proceeds from issuance of stock-based awards | 324 | 446 | 1,690 | 1,625 | ||||||||||||||||||||||
| Payment of withholding taxes on stock-based awards | (238) | (638) | (1,247) | (1,859) | ||||||||||||||||||||||
| Net cash used in financing activities | (1,014) | (1,192) | (557) | (1,234) | ||||||||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 246 | (540) | 864 | (554) | ||||||||||||||||||||||
| Net change in cash, cash equivalents, and restricted cash | (49) | 12,710 | 335 | 17,479 | ||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 44,100 | 44,051 | 56,761 | 57,096 | ||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 44,051 | $ | 56,761 | $ | 57,096 | $ | 74,575 | ||||||||||||||||||
6
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 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, 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 172 million unique secondhand items from 55,000 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 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 fourth quarter and full year of 2023; 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 inflationary pressures, increased interest rates, climate change and general global economic uncertainty 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 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.
7
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 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.
Non-GAAP Financial Measures
This financial supplement and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA loss, Adjusted EBITDA loss margin, and Non-GAAP operating expenses. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA loss, Adjusted EBITDA loss margin, and non-GAAP operating expenses, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA loss, Adjusted EBITDA loss margin, and Non-GAAP operating expenses 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 loss, Adjusted EBITDA loss margin, and Non-GAAP operating expenses, 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. Adjusted EBITDA loss, Adjusted EBITDA loss margin, and Non-GAAP operating expenses 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 used by other companies.
A reconciliation is provided above for Adjusted EBITDA loss to net loss and Non-GAAP operating expenses to reported 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, interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, and severance and other. Non-GAAP operating expenses are operating expenses adjusted to exclude stock-based compensation expense.
8
Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA loss to net loss. thredUP is not providing a quantitative reconciliation of forward-looking guidance of 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, 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 loss in order to calculate forward-looking Adjusted EBITDA loss margin is not available without unreasonable effort. However, for the fourth quarter of 2023 and full year 2023, depreciation and amortization is expected to be $4.8 million, and $18.7 million, respectively. In addition, for the fourth quarter of 2023 and full year 2023, stock-based compensation expense is expected to be $7.7 million, and $32.6 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.
9