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 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 Bag, fill 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 RaaS offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers. We believe RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy and other services.

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, including the loss on divestiture, are presented as a single line item, loss from discontinued operations, net of tax in the consolidated statements of income and excluded from continuing operations for all periods presented. Accordingly, any discussion of historical information in Management’s Discussion and Analysis below 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 for 2024, reflecting the period from the beginning of the year through the transaction date, are presented as a single line item, loss from discontinued operations, net of tax, and excluded from continuing operations in the consolidated statements of operations for the year ended December 31, 2024. Cash flows attributable to Remix are segregated and presented separately as net cash flow used in discontinued operating activities and net cash flow used in discontinued investing activities for the period through the transaction date during the year ended December 31, 2024 in the consolidated statements of cash flows. 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

Gross Profit and Margin: Gross profit totaled $207.1 million, representing an increase of 4.4% year-over-year. Gross margin increased by 290 basis points to 79.7% from 76.8% year-over-year.

Current wording

Gross Profit and Margin: Gross profit totaled $246.8 million for the year ended December 31, 2025, compared to $207.1 million for the year ended December 31, 2024, representing an increase of 19.1% year over year. Gross margin was 79.4%, a decrease of 30 basis points from 79.7% for the same period in 2024.

Previous wording

Loss from continuing operations: Loss from continuing operations was $40.0 million, or a negative 15.4% of revenue, for the year ended December 31, 2024 as compared to a loss of $52.4 million, or a negative 20.3% of revenue, for the same period in 2023.

Current wording

Loss from continuing operations: Loss from continuing operations was $20.2 million, or a negative 6.5% of revenue, for the year ended December 31, 2025, compared to a loss of $40.0 million, or a negative 15.4% of revenue, for the same period in 2024, representing a decrease of 49.5% year over year.

Previous wording

Non-GAAP Adjusted EBITDA (loss) from continuing operations(1): Non-GAAP Adjusted EBITDA from continuing operations was $8.7 million, or 3.3% of revenue, for the year ended December 31, 2024 as compared to a non-GAAP Adjusted EBITDA (loss) from continuing operations of $(5.3) million, or (2.1)% of revenue, for the same period in 2023.

Current wording

Non-GAAP Adjusted EBITDA from continuing operations(1): Non-GAAP Adjusted EBITDA from continuing operations was $13.5 million, or 4.4% of revenue, for the year ended December 31, 2025, compared to $8.7 million, or 3.3% of revenue, for the same period in 2024, representing an increase of 55.8% year over year.

Previous wording

Active Buyers and Orders: Active Buyers totaled 1.3 million and Orders totaled 4.9 million in 2024, representing decreases of 6.1% and 0.6%, respectively, compared to the prior year.

Current wording

Active Buyers and Orders: Active Buyers totaled 1.7 million and Orders totaled 6.1 million in 2025, compared to 1.3 million and 4.9 million, respectively, in 2024, representing increases of 29.5% and 25.3%, respectively, year over year.

Previous wording

(1)Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies. See below for a reconciliation of Non-GAAP Adjusted EBITDA (loss) from continuing operations to its most directly comparable GAAP measure, loss from continuing operations.

Current wording

(1)Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies. See below for a reconciliation of Non-GAAP Adjusted EBITDA from continuing operations to its most directly comparable GAAP measure, loss from continuing operations.

Previous wording

Non-GAAP Adjusted EBITDA (loss) 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, and provision for income taxes. Non-GAAP Adjusted EBITDA (loss) from continuing operations margin represents Non-GAAP Adjusted EBITDA (loss) from continuing operations divided by Total revenue. We use Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, which are 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 that Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations 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.

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, impairment of long-lived assets, legal settlement and fees, provision for income taxes, severance and other reorganization costs, and gains related to non-marketable equity investment. Non-GAAP Adjusted EBITDA from continuing operations margin represents Non-GAAP Adjusted EBITDA from continuing operations divided by Revenue. We use Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin, which are 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 that Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations 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.

Previous wording

The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA (loss) from continuing operations:

Current wording

The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA from continuing operations:

Previous wording

We generate consignment revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers. We recognize consignment revenue, net of seller payouts, discounts, incentives and returns. We expect consignment revenue to continue to increase as we grow our Active Buyers and Orders. Additionally, consignment revenue includes bag fees charged to sellers for processing Clean Out Kits.

Current wording

We generate revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers. Revenue is recognized net of seller payouts, discounts, incentives and returns. Additionally, revenue includes sales of company-owned inventory and bag fees charged to sellers for processing Clean Out Bags. We expect revenue to continue to increase as we grow our Active Buyers and Orders.

Previous wording

Cost of consignment revenue consists of outbound shipping, outbound labor and packaging costs. We expect cost of consignment revenue to decrease and gross profit to increase as a percentage of consignment revenue as we continue to scale our business due to our ability to drive leverage in shipping, labor and packaging.

Current wording

Cost of revenue primarily consists of outbound shipping, outbound labor, and packaging costs. We expect cost of revenue and gross profit as a percentage of revenue to remain relatively stable.

Previous wording

Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses. Distribution center operating costs mainly include inbound shipping costs, other than those capitalized in inventory, as well as personnel costs, distribution center rent, maintenance and depreciation of equipment and leasehold improvements. Product and technology costs include personnel costs for the design and development of product and the related technology that is used to operate our distribution centers, merchandise science, website development and related expenses for these departments. Operations, product and technology expenses also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. We expect operations, product and technology expenses to increase in absolute dollars in future periods to support our growth, especially as costs to increase our supply (inbound costs) are generally incurred prior to the expected revenue growth. Additionally, we expect to continue investing in automation and other technology improvements to support and drive efficiency in our operations. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, including business acquisitions. We expect these expenses to increase in absolute dollars and decrease as a percentage of revenue over the longer term due to better leverage in our operations.

Current wording

Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses. Distribution center operating costs mainly include personnel costs, inbound shipping costs (excluding amounts capitalized to inventory), distribution center rent, equipment, maintenance, and depreciation. Product and technology costs include personnel costs for the design and development of product and the related technology that is used to operate our distribution centers, merchandise science, website development and related expenses for these departments. Operations, product and technology expenses also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. We expect operations, product and technology expenses to increase in absolute dollars in future periods to support our growth, especially as costs to increase our supply (inbound costs) are generally incurred prior to the expected revenue growth. Additionally, we expect to continue investing in automation and other technology improvements to support and drive efficiency in our operations. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, including business acquisitions. We expect these expenses to increase in absolute dollars and decrease as a percentage of revenue over the longer term due to better leverage in our operations.

Previous wording

Interest expense consists of interest and debt issuance costs relating to our term loan facility. Certain 2023 interest costs in conjunction with the build-out of our distribution centers were reclassified from interest expense and capitalized.

Current wording

Interest expense consists of interest and debt issuance costs relating to our term loan facility.

Previous wording

Other income (expense), net primarily consists of non-operating income and expenses such as interest income earned on our investments in marketable securities.

Current wording

Other income, net primarily consists of non-operating income and expenses, including interest income earned on our investments in marketable securities and gains related to our non-marketable equity investments.

Previous wording

We have historically generated negative cash flows from operations and have primarily financed our operations through private and public sales of equity securities and debt. As of December 31, 2024, we had cash, cash equivalents and short-term marketable securities of $44.2 million. Additionally, we have a term loan facility (“Term Loan”) under which $22.5 million remained available to be drawn as of December 31, 2024 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date. See Note 8, Long-Term Debt, to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a further discussion on our Term Loan.

Current wording

We generated positive cash flows from continuing operations of $10.7 million for the year ended December 31, 2025. We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”). As of December 31, 2025, we had cash, cash equivalents, restricted cash and short-term marketable securities of $53.1 million. Additionally, we have a Term Loan under which $22.5 million remained available to be drawn as of December 31, 2025 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date. See Note 7, Long-Term Debt, to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K 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 and product inventory costs, 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, short-term marketable securities, and remaining availability under the Term Loan will be sufficient for at least the next 12 months 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 2026 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, as well as repayments on our Term Loan. 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 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 our increased 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 in 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.”

Current wording

Our future capital requirements will depend on many factors, including but not limited to, the timing of our increased 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 in 2026. See Part I, Item 1A, Risk Factors, under “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” in this Annual Report on Form 10-K.

Previous wording

Net cash used in continuing investing activities was $10.3 million for the year ended December 31, 2024, compared to net cash provided of $46.6 million for the same period in 2023. The $56.8 million increase in continuing investing cash outflows was primarily driven by a $49.5 million decrease in maturities in marketable securities and a $13.9 million increase in purchases of marketable securities, partially offset by a $6.5 million decrease in purchases of property and equipment following the completion of the first phase of our Texas distribution center build-out.

Current wording

Net cash used in continuing investing activities was $7.2 million for the year ended December 31, 2025, compared to $10.3 million for the same period in 2024. The $3.1 million decrease in continuing investing cash outflows was primarily driven by an $11.1 million decrease in purchases of marketable securities, partially offset by a $4.1 million decrease in maturities in marketable securities and a $3.9 million increase in purchases of property and equipment.

Previous wording

Net cash used in continuing financing activities was $4.4 million for the year ended December 31, 2024, compared to net cash used of $3.6 million for the same period in 2023. The $0.8 million increase in continuing financing cash outflows was primarily driven by a $1.5 million decrease in proceeds from issuance of stock-based awards, partially offset by a $0.7 million increase in payroll taxes paid on stock-based award activity.

Current wording

Net cash used in continuing financing activities was $0.4 million for the year ended December 31, 2025, compared to $4.4 million for the same period in 2024. The $4.0 million decrease in continuing financing cash outflows was primarily driven by a $24.3 million increase in proceeds from issuance of stock-based awards, driven by a higher stock price, partially offset by a $20.3 million increase in payroll taxes paid on stock-based award activity.

Previous wording

Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2024, the value of our non-cancellable unconditional purchase obligations was $9.4 million. See Note 11, Commitments and Contingencies, to the consolidated financial statements included in Part I, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information regarding our purchase obligations.

Current wording

Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2025, the value of our non-cancellable unconditional purchase obligations was $3.5 million. See Note 10, Commitments and Contingencies, to the consolidated financial statements included in Part I, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information regarding our purchase obligations.

Previous wording

We generate revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers and partners. We retain a percentage of the proceeds received as payment for our consignment service. We report consignment revenue on a net basis as an agent and not the gross amount collected from the buyer. We recognize consignment revenue upon purchase of the seller’s secondhand item by the buyer.

Current wording

We generate revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers and partners. We retain a percentage of the proceeds received as payment for our consignment service. We report revenue on a net basis as an agent and not the gross amount collected from the buyer. We recognize revenue upon purchase of the seller’s secondhand item by the buyer. Revenue is recognized net of discounts, incentives and returns. Sales tax assessed by governmental authorities is excluded from revenue.

Previous wording

We recognize revenue from gift cards when the gift cards are redeemed by the customer. Additionally, we recognize 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 2024, with more historical data available, breakage revenue is estimated based upon historical customer redemption patterns. 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.

Current wording

We recognize revenue from gift cards when the gift cards are redeemed by the customer. Additionally, we recognize 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. 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.