ThredUp Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business

ThredUp Inc. (“ThredUp” or the “Company”) was formed as a corporation in the State of Delaware in January 2009. ThredUp operates a large resale platform that enables consumers to buy and sell primarily secondhand apparel, shoes, and accessories.

2. Significant Accounting Policies

Basis of Presentation and Use of Estimates

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany account balances and transactions have been eliminated upon consolidation. The unaudited condensed consolidated financial statements were prepared in accordance with the United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Quarterly Report on Form 10‑Q and Article 10 of Regulation S-X. As permitted under those rules, certain footnotes or other financial information may be condensed or omitted.

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and the related disclosures. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to: the useful lives of property and equipment, allowance for sales returns, breakage on gift cards, stock-based compensation, lease liabilities, and goodwill.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2025 and 2024, and the results of operations and cash flows for the interim periods presented.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”).

Reclassification

Certain prior period amounts have been reclassified to conform to the current period’s presentation. Beginning in the first quarter of 2025, the Company combined consignment revenue and product revenue into a single line item, revenue, on the condensed consolidated statements of operations, and similarly combined related cost of revenue line items, reflecting the immateriality of product revenue following the Company’s transition to a primarily consignment model. The Company also reclassified inventory to other current assets on the condensed consolidated balance sheets and statements of cash flows to align with the combined presentation. These reclassifications had no impact on previously reported total revenue, net loss, stockholders’ equity, or cash flows.

Discontinued Operations

In the fourth quarter of 2024, the Company divested 91% of its European business and Bulgarian subsidiary, Remix Global EAD (“Remix”), meeting the requirements for reporting Remix as a discontinued operation. Accordingly, Remix’s results during 2024 are presented as discontinued operations in the condensed consolidated statements of operations and excluded from continuing operations for the three and nine months ended September 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 three and nine months ended September 30, 2024. Unless otherwise noted, amounts and disclosures in these notes to condensed consolidated financial statements pertain to the Company’s continuing operations. See Note 12, Discontinued Operations, for further details on the transaction.

Recently Adopted Accounting Pronouncements

There were no accounting pronouncements adopted during the three and nine months ended September 30, 2025.

Accounting Pronouncements Not Yet Effective

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU”) 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes stage-based criteria and instead requires capitalization once a project is approved and it is probable that the project will be completed, unless significant development uncertainty exists. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. For the Company, the ASU will be effective for the annual period ending December 31, 2028. Early adoption is permitted. The Company is currently evaluating the potential impact on its consolidated financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient that permits entities to assume that conditions existing as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods. For the Company, the ASU will be effective for the annual period ending December 31, 2026. Early adoption is permitted. The Company is currently evaluating the potential impact of the ASU but does not expect its adoption to have a material impact on its consolidated financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about a public entity’s expenses, including inventory, employee compensation, depreciation, intangible asset amortization, selling expenses and other expense categories. ASU 2024-03 is effective for annual period beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, which will be the annual period ending December 31, 2027 and interim periods within the annual period ending December 31, 2028 for the Company. The Company is currently evaluating the potential impact on its consolidated financial statement disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional quantitative and qualitative income tax disclosures to enable financial statements users to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which will be the annual period ending December 31, 2025 for the Company. The Company expects the adoption to result in enhanced income tax disclosures in its annual consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company does not expect that the application of this standard will have an impact on its consolidated financial statements and disclosures.

Segment Reporting

The Company operates underone operating segment andone reportable segment as its chief operating decision maker (“CODM”), who is its Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. The Company does not have material intra-entity sales or transfers.

The key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company’s loss from continuing operations, as reported in the condensed consolidated statements of operations.

Significant expenses within operating loss, as well as within loss from continuing operations, include cost of revenue, operations, product and technology, marketing, and sales, general and administrative expenses, which are each separately presented in the condensed consolidated statements of operations. Other segment items within loss from continuing operations include interest expense, other income, net, and provision for income taxes. The CODM manages the business using consolidated expense information, as well as regularly provided budgeted or forecasted expense information. Assets provided to the CODM are consistent with those reported on the condensed consolidated balance sheets.

Revenue from Loyalty Reward Redemption and Expiration

The Company previously had a customer loyalty program, which allowed end-customers to earn and accumulate points with each qualifying purchase. Earned points could be redeemed for loyalty rewards, such as non-cashoutable shopping credit, free shipping, or waived restocking fee, which could be applied to future purchases or returns. Unredeemed points expired after one year from the date the points were earned. Reward coupons expiredsix months from the date the reward was claimed. Points earned on purchases were considered a material right, representing a separate performance obligation.

The allocated consideration for the points earned through qualifying purchase transactions was deferred based on the standalone selling price of the points, adjusted for expected breakage in proportion to the pattern of redemption, and recorded within deferred revenue under accrued and other current liabilities within the Company’s condensed consolidated balance sheets. Revenue was recognized for these performance obligations at a point in time when rewards were redeemed by the end customer or expired.

Effective October 1, 2024, customers were no longer able to earn loyalty points and after March 31, 2025, they could no longer redeem any previously accumulated points. As a result, as of September 30, 2025, the Company didnot have a deferred revenue liability related to its customer loyalty program. As of December 31, 2024, the Company had a deferred revenue liability of $1.5 million related to the program, which was included in accrued and other current liabilities within the Company’s condensed consolidated balance sheets. The Company recognized $0 and $2.8 million of revenue from loyalty reward redemptions and expirations for the three months ended September 30, 2025 and September 30, 2024, respectively, and $1.5 million and $10.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Gift Cards and Site Credits

The Company sells ThredUp gift cards on its e-commerce website and may also convert seller payables and site credits to ThredUp gift cardsone year after issuance at the discretion of the Company. ThredUp gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a gift card liability at the time a gift card is delivered to the customer. As of September 30, 2025 and December 31, 2024, gift card liabilities of $5.1 million and $8.5 million, respectively, were included in accrued and other current liabilities within the Company’s condensed consolidated balance sheets. Revenue from redemption of gift cards wasnot material for the three and nine months ended September 30, 2025 and 2024.

The Company recognizes breakage revenue for the portion of gift card values that are not expected to be redeemed. Previously, breakage revenue was estimated when gift card redemption was deemed remote. Beginning in the fourth quarter of 2024, with more historical data available, breakage revenue is estimated based upon historical customer redemption patterns. Breakage revenue primarily relates to gift cards converted from seller payables and site credits. Judgment is required in determining the appropriate grouping of gift cards for analyzing breakage rates, redemption patterns, and estimating the ultimate value of gift cards not expected to be redeemed. Breakage revenue was $2.6 million and $1.3 million for the three months ended September 30, 2025 and 2024, respectively, and $6.5 million and $3.9 million for the nine months ended September 30, 2025 and 2024, respectively.

The Company issues site credits for returns, which can be applied toward future charges but may not be converted into cash. Site credits may also be converted to ThredUp gift cards beginning afterone year at the discretion of the Company. These credits are recognized as revenue when used. As of September 30, 2025 and December 31, 2024, $4.1 million and $3.8 million, respectively, of such customer site credits were included in accrued and other current liabilities within the Company’s condensed consolidated balance sheets. Revenue recognized from the redemption of site credits was $13.2 million and $10.5 million for the three months ended September 30, 2025 and 2024, respectively, and $37.1 million and $32.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Seller Payable

Seller payable includes amounts owed to sellers upon the purchase of sellers’ goods by the Company or by buyers. Amounts are initially provided as a credit to sellers (“seller credits”). These credits may be applied towards purchases from the Company, converted to third-party retailer or ThredUp gift cards or redeemed for cash. As of September 30, 2025 and December 31, 2024, there was $17.9 million and $15.1 million, respectively, of seller payable within the Company’s condensed consolidated balance sheets. Revenue recognized from the redemption of seller credits was $8.2 million and $5.8 million for the three months ended September 30, 2025 and 2024, respectively, and $21.7 million and $17.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s condensed consolidated balance sheets, which sum to the total of the same such amounts shown in the Company’s condensed consolidated statements of cash flows:

3. Financial Instruments and Fair Value Measurements

The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

•Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•Level 3 inputs are unobservable inputs for the asset or liability.

Fair Value Measurements - Recurring Basis

The following tables provide information about the Company’s financial instruments that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such values as of September 30, 2025 and December 31, 2024:

As of September 30, 2025 and December 31, 2024, the Company’s cash equivalents and marketable securities approximated their estimated fair value. As such, the unrealized gains or losses related to the Company’s cash equivalents and marketable securities were not material.

For the Company’s marketable securities, which were all classified as available-for-sale, the Company utilizes third-party pricing services to obtain fair value. Third-party pricing methodologies incorporate bond terms and conditions, current performance data, proprietary pricing models, real-time quotes from contributing dealers, trade prices and other market data. The Company determined that the declines in the fair value of its marketable securities were not driven by credit-related factors. During the three and nine months ended September 30, 2025 and 2024, the Company did not recognize any losses on its marketable securities due to credit-related factors.

As of September 30, 2025, the Company’s money market funds were valued using Level 1 inputs because they were valued using quoted prices in active markets. The Company’s commercial paper and U.S. treasury securities were valued using Level 2 inputs because they were valued using quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

As of September 30, 2025 and December 31, 2024, the Company had no assets or liabilities classified within Level 3 of the fair value hierarchy. There were no transfers into or out of Level 3 during the three and nine months ended September 30, 2025. As of September 30, 2025, all of the $4.9 million carrying amount of marketable securities had a contractual maturity date of less than one year.

Fair Value Measurements - Nonrecurring Basis

The Company measures the fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. Such nonrecurring fair value measurements generally result from impairment charges. The Company did not have any assets resulting in nonrecurring fair value measurements as of September 30, 2025 and December 31, 2024 in the Company’s condensed consolidated balance sheets.

Other Fair Value Disclosures

As of September 30, 2025 and December 31, 2024, the carrying amounts of the Company’s accounts receivable, other current assets, other assets, accounts payable, seller payable and accrued and other current liabilities approximated their estimated fair values due to their relatively short maturities. Management believes the terms of its long-term variable-rate debt reflect current market conditions for an instrument with similar terms and maturity, and as such, the carrying value of the Company’s long-term debt approximated its fair value as of September 30, 2025 and December 31, 2024.

4. Property and Equipment, Net

Property and equipment, net consisted of the following:

Depreciation and amortization expense of property and equipment was $3.1 million and $3.5 million for the three months ended September 30, 2025 and 2024, respectively, and $9.5 million and $10.9 million for the nine months ended September 30, 2025 and 2024, respectively.

5. Balance Sheet Components

Accrued and other current liabilities consisted of the following:

6. Long-Term Debt

In February 2019, the Company entered into a loan and security agreement (“Term Loan”) with Western Alliance Bank for an aggregate amount of up to $40.0 million.

The Term Loan was subsequently amended several times, with the most recent amendment taking place in December 2023. As amended, the Term Loan matures on July 14, 2027 and provides for an aggregate borrowing amount of up to $48.8 million, of which $22.5 million remains available and is designated for the purchase of certain equipment. The Term Loan bears interest at the prime rate published in the Wall Street Journal plus a margin of 1.25%, with a floor of 4.75%.

The Term Loan requires the Company to comply with certain financial covenants, including, among other things, liquidity requirements, minimum cash deposits with Western Alliance Bank, performance metrics, and a debt service coverage ratio. The Term Loan also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, redeeming and repurchasing certain other indebtedness, loans and investments, additional indebtedness, liens, mergers, asset sales and transactions with affiliates. In addition, the Term Loan contains customary events of default. As of September 30, 2025, the Company was in compliance with its debt covenants under the Term Loan.

The Term Loan is payable in consecutive monthly installments. Interest is due monthly on amounts outstanding under the Term Loan. The Company is permitted to make voluntary prepayments without penalty or premium at any time.

As of September 30, 2025 and December 31, 2024, the effective interest rate for borrowings under the Term Loan was 9.45% and 9.71%, respectively.

During the nine months ended September 30, 2025 and 2024, the Company didnot make any borrowings under the Term Loan and repaid a total of $3.0 million in each of the periods on amounts outstanding under the Term Loan. As of September 30, 2025 and December 31, 2024, the amounts outstanding under the Term Loan were $19.3 million and $22.3 million, respectively.

The Company incurred interest expense related to the Term Loan of $0.5 million and $0.6 million for the three months ended September 30, 2025 and 2024, respectively, and $1.5 million and $2.0 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the future annual principal payments of the Term Loan were as follows:

7. Common Stock and Stockholders’ Equity

Each share of Class A common stock is entitled toone vote per share. Each share of Class B common stock is entitled toten votes per share and is convertible at any time intoone share of Class A common stock.

The table below summarizes the Class A common stock and Class B common stock authorized, issued and outstanding as of September 30, 2025 and December 31, 2024:

8. Stock-Based Compensation

The Company has stock-based compensation plans, which are more fully described in Note 10, Stock-Based Compensation Plans, to the Consolidated Financial Statements included in the 2024 10-K. During the nine months ended September 30, 2025, the Company granted restricted stock units subject to service conditions.

Stock-Based Compensation Expense

The following table provides information about stock-based compensation expense by financial statement line item:

Stock-based compensation expense capitalized in internal use software wasnot material for the three and nine months ended September 30, 2025 and 2024.

Stock Options

The following table summarizes the activities for all stock options under the Company’s stock-based compensation plans for the nine months ended September 30, 2025:

(1)The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards.

As of September 30, 2025, the total unrecognized compensation cost related to all nonvested stock options wasnot material.

Restricted Stock Units

The following table summarizes the activities for all restricted stock units (“RSUs”) under the Company’s stock-based compensation plans for the nine months ended September 30, 2025:

As of September 30, 2025, the total unrecognized compensation cost related to all nonvested RSUs was $21.1 million and the related weighted-average period over which it is expected to be recognized was approximatelytwo years.

9. Commitments and Contingencies

Legal Contingencies

The Company is subject to litigation claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Indemnifications

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for limited and customary indemnification obligations. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made.

10. Income Taxes

The quarterly income tax provision reflects an estimate of the corresponding quarter’s state taxes in the U.S. The provision for income tax expense for the three and nine months ended September 30, 2025 and 2024 was determined based upon estimates of the Company’s annual effective tax rate for the years ending December 31, 2025 and 2024, respectively. Since the Company is in a full valuation allowance position due to losses incurred since inception, the provision for taxes consists solely of certain state income taxes.

11. Loss Per Share

The following securities have been excluded from the computation of diluted loss per share for the periods presented because including them would have been anti-dilutive:

12. Discontinued Operations

On November 30, 2024, the Company completed the sale of its European subsidiary, Remix, to Remix’s management (the “Transaction”). The Transaction qualified for held-for-sale classification on November 30, 2024 and represented a strategic shift with a major effect on the Company’s operations and financial results. Following the divestiture, the Company did not have any significant continuing involvement in the operations of Remix. As a result, Remix met the criteria for reporting as a discontinued operation on the same date.

Remix’s financial results during 2024 are presented as loss from discontinued operations, net of tax in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024. The following table presents the major components of Remix’s financial results for the period presented: