ThredUp Inc.

Previous wording

ThredUp’s proprietary operating platform is the foundation for our managed marketplace, where we have bridged online and offline technology to make the buying and selling of tens of millions of unique items easy and fun. The marketplaces we have built enable buyers to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. 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. ThredUp’s sellers order a Clean Out Kit, fill it and return it to us using our prepaid label. We take it from there and do the work to make those items available for resale.

Current wording

ThredUp’s proprietary operating platform is the foundation for our managed marketplace, where we have bridged online and offline technology to make the buying and selling of tens of millions of unique items easy and fun. The marketplaces we have built enable buyers to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. 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. ThredUp’s sellers order a Clean Out Kit, fill it and return it to us using our prepaid label. We take it from there and do the work to make those items available for resale. In addition to our core marketplace, some of the world’s leading brands and retailers are taking advantage of our Resale-as-a-Service (“RaaS”) offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers. We believe that RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy.

Previous wording

On November 30, 2024, we divested 91% of our European business and Bulgarian subsidiary, Remix, which qualified for reporting as a discontinued operation. As a result, Remix’s results during 2024 are presented as a single line item, loss from discontinued operations, net of tax in the condensed consolidated statements of operations and excluded from continuing operations for the three months ended March 31, 2024. In the condensed consolidated statements of cash flows, cash flows attributable to Remix have been segregated and presented separately as net cash flow used in discontinued operating activities and net cash flow used in discontinued investing activities for the three months ended March 31, 2024. Accordingly, any discussion of historical information in the following sections reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.

Current wording

On November 30, 2024, we divested 91% of our European business and Bulgarian subsidiary, Remix, which qualified for reporting as a discontinued operation. As a result, Remix’s results during 2024 are presented as a single line item, loss from discontinued operations, net of tax in the condensed consolidated statements of operations and excluded from continuing operations for the three and six months ended June 30, 2024. In the condensed consolidated statements of cash flows, cash flows attributable to Remix have been segregated and presented separately as net cash flow used in discontinued operating activities and net cash flow used in discontinued investing activities for the six months ended June 30, 2024. Accordingly, any discussion of historical information in the following sections reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.

Previous wording

Revenue: Revenue totaled $71.3 million, representing an increase of 10.5% year over year.

Current wording

Revenue: Revenue totaled $77.7 million, representing an increase of 16.4% year over year.

Previous wording

Gross Profit and Margin: Gross profit totaled $56.4 million, representing an increase of 9.0% year over year. Gross margin was 79.1%, a decrease of 100 basis points from 80.1% in the comparable quarter last year.

Current wording

Gross Profit and Margin: Gross profit totaled $61.7 million, representing an increase of 17.5% year over year. Gross margin was 79.5%, an increase of 70 basis points from 78.8% in the comparable quarter last year.

Previous wording

Loss from continuing operations: Loss from continuing operations was $5.2 million, or a negative 7.3% of revenue, for the first quarter of 2025, compared to a loss of $12.2 million, or a negative 18.9% of revenue, for the first quarter of 2024.

Current wording

Loss from continuing operations: Loss from continuing operations was $5.2 million, or a negative 6.7% of revenue, for the second quarter of 2025, compared to a loss of $9.4 million, or a negative 14.1% of revenue, for the second quarter of 2024.

Previous wording

Non-GAAP Adjusted EBITDA from continuing operations(1): Non-GAAP Adjusted EBITDA from continuing operations was $3.8 million, or 5.3% of revenue, for the first quarter of 2025, compared to $1.9 million, or 2.9% of revenue, for the first quarter of 2024.

Current wording

Non-GAAP Adjusted EBITDA from continuing operations(1): Non-GAAP Adjusted EBITDA from continuing operations was $3.0 million, or 3.9% of revenue, for the second quarter of 2025, compared to $1.5 million, or 2.2% of revenue, for the second quarter of 2024.

Previous wording

Active Buyers and Orders: Active Buyers and Orders each totaled 1.4 million in the first quarter of 2025, representing increases of 5.7% and 16.1%, respectively, compared to the first quarter of 2024.

Current wording

Active Buyers and Orders: Active Buyers and Orders each totaled 1.5 million in the second quarter of 2025, representing increases of 16.5% and 20.8%, respectively, compared to the second quarter of 2024.

Previous wording

Non-GAAP Adjusted EBITDA from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, severance and other reorganization costs, interest expense, gain on sale of non-marketable equity investment, and provision for income taxes. Non-GAAP Adjusted EBITDA from continuing operations margin represents Non-GAAP Adjusted EBITDA from continuing operations divided by Revenue. We use these non-GAAP measures to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe 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.

Current wording

Non-GAAP Adjusted EBITDA from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, interest expense, provision for income taxes, gain on sale of non-marketable equity investment, and severance and other reorganization costs. Non-GAAP Adjusted EBITDA from continuing operations margin represents Non-GAAP Adjusted EBITDA from continuing operations divided by Revenue. We use these non-GAAP measures to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe 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.

Previous wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Current wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Previous wording

Revenue increased $6.8 million, or 10.5%, for the three months ended March 31, 2025 as compared to the same period in 2024. The growth in revenue was mainly driven by a 5.7% increase in Active Buyers, a 16.1% increase in Orders and a 4.3% increase in the average order value, reflecting continued strength in our core marketplace business and our ongoing focus on the higher-margin, capital-efficient consignment model.

Current wording

Revenue increased $10.9 million, or 16.4%, for the three months ended June 30, 2025 as compared to the same period in 2024. The growth in revenue was mainly driven by a 20.8% increase in Orders, partially offset by a 2.4% decrease in the average order value, reflecting continued strength in our core marketplace business and our ongoing focus on the higher-margin, capital-efficient consignment model.

Previous wording

Gross margin was 79.1% and 80.1% for the three months ended March 31, 2025 and 2024, respectively, or a decrease of 100 basis points. The decrease in gross margin for the three months ended March 31, 2025 as compared to the same period in 2024 was primarily driven by higher outbound shipping, labor, and packaging costs.

Current wording

Gross margin was 79.5% and 78.8% for the three months ended June 30, 2025 and 2024, respectively, or an increase of 70 basis points. The increase in gross margin for the three months ended June 30, 2025 as compared to the same period in 2024 was primarily driven by lower cost of goods as a percentage of revenue.

Previous wording

Operations, product, and technology expenses decreased $2.0 million, or 5.4% for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily due to a $1.2 million decrease in facilities, technology and other costs, a $1.1 million decrease in severance costs following the completion of our workforce reorganization in March 2024, and a $0.3 million decrease in inbound shipping related to consignment revenue. This decrease was partially offset by a $0.6 million increase in personnel costs, driven by higher headcount at our distribution center. The decrease in operations, product, and technology expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue and lower overall costs.

Current wording

Operations, product, and technology expenses increased $0.6 million, or 0.8%, for the six months ended June 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $3.6 million increase in personnel-related costs, primarily driven by higher headcount at our distribution centers to support greater supply availability for customers. This increase was partially offset by a $1.2 million decrease in inbound shipping costs, primarily driven by lower rates; a $1.0 million decrease in severance costs following the completion of our workforce reorganization in March 2024; and a $0.8 million decrease in facilities, technology and other costs. The decrease in operations, product, and technology expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue.

Previous wording

Marketing expenses increased $2.3 million, or 21.1%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to a $2.5 million increase in advertising costs and a $0.6 million increase in facilities, technology and other costs. This increase was partially offset by a $0.8 million decrease in personnel-related costs, including a $0.4 million decrease in severance costs following the completion of our workforce reorganization in March 2024 and a $0.4 million decrease driven by lower headcount. The increase in marketing expenses as a percentage of revenue reflected a higher rate of marketing spend relative to the growth in revenue, as we continue to invest in marketing initiatives to support future growth.

Current wording

Marketing expenses increased $5.2 million, or 21.7%, for the six months ended June 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $4.6 million increase in advertising costs and a $1.1 million increase in professional services. This increase was partially offset by a $0.6 million decrease in personnel-related costs as a result of the March 2024 workforce reorganization. The increase in marketing expenses as a percentage of revenue reflected a higher rate of marketing spend relative to the growth in revenue, as we continue to invest in marketing initiatives to support future growth.

Previous wording

Sales, general, and administrative expenses decreased $2.6 million, or 16.1%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily due to a $3.6 million decrease in personnel-related costs, including a $2.4 million decrease driven by lower headcount, of which $1.5 million related to a decrease in stock-based compensation expense, and a $1.2 million decrease in severance costs following the completion of our workforce reorganization in March 2024. This decrease was partially offset by a $0.6 million increase in facilities, technology and other costs and a $0.4 million increase in professional services. The decrease in sales, general, and administrative expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue and lower overall costs.

Current wording

Sales, general, and administrative expenses decreased $3.3 million, or 10.9%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily due to a $5.0 million decrease in personnel-related costs, including a $3.2 million decrease in stock-based compensation expense, and a $1.2 million decrease in severance costs following the completion of our workforce reorganization in March 2024. This decrease was partially offset by a $1.4 million increase in facilities, technology and other costs and a $0.4 million increase in professional services. The decrease in sales, general, and administrative expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue and lower overall costs.

Previous wording

Other income, net decreased $0.1 million for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to lower interest rates and a reduced average cash balance.

Current wording

Other income, net decreased $0.3 million for the three months ended June 30, 2025 as compared to the same period in 2024, primarily due to lower interest income resulting from both a decline in interest rates and a reduced average cash balance.

Previous wording

While we have a history of negative cash flows from operations, we generated positive cash flows from continuing operations of $5.7 million for the three months ended March 31, 2025. We have primarily financed our operations through private and public sales of equity securities and debt. As of March 31, 2025, we had cash, cash equivalents and short-term marketable securities of $55.4 million. Additionally, we have a term loan facility (“Term Loan”) under which $22.5 million remained available to be drawn as of March 31, 2025 for the purchase of certain equipment, and we were in full compliance with our debt covenants under the Term Loan as of that date. See Note 6. Long-Term Debt, to the condensed consolidated financial statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our Term Loan.

Current wording

While we have a history of negative cash flows from operations, we generated positive cash flows from continuing operations of $6.1 million for the six months ended June 30, 2025. We have primarily financed our operations through private and public sales of equity securities and debt. As of June 30, 2025, we had cash, cash equivalents, restricted cash and short-term marketable securities of $56.2 million. Additionally, we have a term loan facility (“Term Loan”) under which $22.5 million remained available to be drawn as of June 30, 2025 for the purchase of certain equipment, and we were in full compliance with our debt covenants under the Term Loan as of that date. See Note 6, Long-Term Debt, to the condensed consolidated financial statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our Term Loan.

Previous wording

We expect operating losses to continue in 2025 as we continue to invest in growing our business and our infrastructure. Our primary sources of liquidity are cash flows generated from operations, cash on hand and borrowings available under the Term Loan. Our primary use of cash includes seller payouts, operating costs such as distribution network spend, product and technology expenses, marketing expenses, personnel expenses and other expenditures necessary to support our operations and our growth. Additionally, our primary capital expenditures are related to the set-up, expansion and/or automation of our distribution network. Based upon our current operating plans, we believe that our existing cash, cash equivalents and short-term marketable securities will be sufficient for at least the next 12 months and beyond to meet our short- and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term. Our cash flow forecast is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Current wording

We expect operating losses to continue in 2025 as we continue to invest in growing our business and our infrastructure. Our primary sources of liquidity are cash flows generated from operations, cash on hand and borrowings available under the Term Loan. Our primary use of cash includes seller payouts, operating costs such as distribution network spend, product and technology, marketing, personnel-related expenses, and other expenditures necessary to support our operations and our growth. Additionally, our primary capital expenditures are related to the set-up, expansion and/or automation of our distribution network. Based upon our current operating plans, we believe that our existing cash, cash equivalents and short-term marketable securities will be sufficient for at least the next 12 months and beyond to meet our short and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term. Our cash flow forecast is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Previous wording

Our future capital requirements will depend on many factors, including but not limited to, the timing of any future distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings and new RaaS clients, the continuing growth of our marketplaces and overall economic conditions. However, we expect that our capital expenditures will remain modest for the remainder of 2025. See the section titled“Risk Factors—Risks Relating to Our Indebtedness and Liquidity—We may require additional capital to support business growth, and this capital might not be available or may be available only by diluting existing stockholders” within the 2024 10-K.

Current wording

Our future capital requirements will depend on many factors, including but not limited to, the timing of any future distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings, the continuing growth of our marketplaces and overall economic conditions. However, we expect that our capital expenditures will remain modest for the remainder of 2025. See the section titled“Risk Factors—Risks Relating to Our Indebtedness and Liquidity—We may require additional capital to support business growth, and this capital might not be available or may be available only by diluting existing stockholders” within the 2024 10-K.

Previous wording

Net cash provided by continuing operating activities was $5.7 million during the three months ended March 31, 2025, compared to $3.3 million during the three months ended March 31, 2024. The $2.5 million increase in continuing operating cash inflows was primarily due to a $7.0 million decrease in our loss from continuing operations, partially offset by a $2.4 million decrease in non-cash charges and a $2.1 million net use of cash from changes in operating assets and liabilities. The decrease in non-cash charges was primarily related to a $1.4 million reduction in stock-based compensation expense as a result of the March 2024 workforce reorganization, and a $0.6 million decrease in depreciation expense due to accelerated depreciation recorded in the fourth quarter of 2024. The change in operating assets and liabilities was primarily attributable to cash outflows of $4.3 million from lower accrued and other liabilities, primarily due to accrued severance in the first quarter of 2024 related to our March 2024 workforce reorganization, $1.4 million from higher accounts receivable reflecting the timing of cash receipts from payment processors and higher sales volume near the end of the quarter, and $1.3 million from higher other current assets primarily related to lower sales of owned inventory. These were partially offset by cash inflows of $3.5 million from higher accounts payable due to timing of vendor payments, and $1.2 million from higher seller payable, primarily reflecting the timing of seller credit cash-outs or redemptions and conversions to gift cards.

Current wording

Net cash provided by continuing operating activities was $6.1 million during the six months ended June 30, 2025, compared to $0.3 million during the six months ended June 30, 2024. The $5.8 million increase in continuing operating cash inflows was primarily due to a $11.2 million decrease in our loss from continuing operations, partially offset by a $4.2 million decrease in non-cash charges and a $1.1 million net use of cash from changes in operating assets and liabilities. The decrease in non-cash charges was primarily related to a $3.6 million reduction in stock-based compensation expense as a result of the March 2024 workforce reorganization, and a $1.0 million decrease in depreciation expense due to the accelerated depreciation recorded in the fourth quarter of 2024 for warehouse equipment we no longer plan to use. The $1.1 million net decrease in operating assets and liabilities was primarily attributable to cash outflows of $2.3 million from overall lower accounts payable and accrued and other liabilities, primarily reflecting the timing of vendor and bonus payments; $1.6 million from higher accounts receivable, reflecting the timing of cash receipts from payment processors; and $1.4 million from higher other current assets, primarily related to lower sales of owned inventory. These were partially offset by cash inflows of $3.6 million from higher seller payable, primarily reflecting the timing of seller credit cash-outs or redemptions and conversions to gift cards.

Previous wording

Net cash provided by continuing investing activities for the three months ended March 31, 2025 was $5.1 million as compared to net cash used in continuing investing activities of $5.3 million for the same period in 2024. The $10.4 million increase in cash inflows was primarily due to a $5.5 million decrease in purchases of marketable securities and a $5.6 million increase in sale and maturities of marketable securities, partially offset by a $0.7 million increase in purchases of property and equipment.

Current wording

Net cash provided by continuing investing activities for the six months ended June 30, 2025 was $1.0 million as compared to net cash used in continuing investing activities of $4.1 million for the same period in 2024. The $5.1 million increase in cash inflows was primarily due to a $6.1 million decrease in purchases of marketable securities and a $2.2 million increase in sale and maturities of marketable securities, partially offset by a $3.1 million increase in purchases of property and equipment.