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. 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.

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 or a prepaid shipping label, fill a bag or a box and return it to us. 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 and other services.

Previous wording

Gross Profit and Margin: Gross profit totaled $65.2 million for the third quarter of 2025, compared to $48.8 million for the third quarter of 2024, representing an increase of 33.8% year over year. Gross margin was 79.4%, an increase of 10 basis points from 79.3% in the comparable quarter last year.

Current wording

Gross Profit and Margin: Gross profit totaled $64.7 million for the first quarter of 2026, compared to $56.4 million for the first quarter of 2025, representing an increase of 14.7% year over year. Gross margin was 79.2%, an increase of 10 basis points from 79.1% in the comparable quarter last year.

Previous wording

Loss from continuing operations: Loss from continuing operations was $4.2 million, or a negative 5.2% of revenue, for the third quarter of 2025, compared to $10.4 million, or a negative 16.8% of revenue, for the third quarter of 2024, representing a decrease of 59.0% year over year .

Current wording

Net Loss was $6.5 million, or a negative 7.9% of revenue, for the first quarter of 2026, compared to $5.2 million, or a negative 7.3% of revenue, for the first quarter of 2025, representing an increase of 24.1% year over year.

Previous wording

Active Buyers and Orders: Active Buyers totaled 1.568 million and Orders totaled 1.608 million, in the third quarter of 2025, compared to 1.248 million and 1.172 million, respectively, in the third quarter of 2024, representing increases of 25.6% and 37.2%, respectively, year over year.

Current wording

Active Buyers and Orders: Active Buyers totaled 1.7 million and Orders totaled 1.6 million, in the first quarter of 2026, compared to 1.4 million and 1.4 million, respectively, in the first quarter of 2025, representing increases of 25.0% and 19.3%, respectively, year over year.

Previous 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.

Current wording

(1)Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted EBITDA 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 to its most directly comparable GAAP measure, Net loss.

Previous wording

Non-GAAP Financial Measures from Continuing Operations

Current wording

Non-GAAP Financial Measures

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, interest expense, provision (benefit) for income taxes, severance and other reorganization costs, and gain on sale of 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 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 means Net loss adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, interest expense, provision for income taxes, severance and other reorganization costs, and gains related to non-marketable equity investments. Non-GAAP Adjusted EBITDA margin represents Non-GAAP Adjusted EBITDA 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

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

Current wording

The following table provides a reconciliation of Net loss to Non-GAAP Adjusted EBITDA:

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Current wording

Comparison of Financial Results for the Three Months Ended March 31, 2026 and 2025

Previous wording

Revenue increased $20.6 million, or 33.6%, for the three months ended September 30, 2025 as compared to the same period in 2024. The growth in revenue was mainly driven by a 37.2% increase in Orders, supported by higher engagement from new buyers acquired during the third quarter and repeat purchases from customers acquired earlier in the year, partially offset by a 4.2% decrease in the average order value, primarily due to a higher mix of orders from new buyers, who tend to place smaller orders. These trends reflect the continued strength in our core marketplace business and our ongoing focus on driving platform growth.

Current wording

Revenue increased $10.4 million, or 14.6%, for the three months ended March 31, 2026 as compared to the same period in 2025. The growth in revenue was mainly driven by a 19.3% increase in Orders, supported by higher engagement from both new and returning buyers, partially offset by a 1.6% decrease in the average order value, primarily driven by a higher mix of orders from newer buyer cohorts who tend to place smaller orders, all largely attributable to a lower free shipping threshold. These trends reflect the continued strength in our core marketplace business and our ongoing focus on driving platform growth.

Previous wording

Gross margin was 79.4% for the three months ended September 30, 2025, compared to 79.3% in the same period in 2024, a slight increase of 10 basis points. Gross margin was 79.3% for the nine months ended September 30, 2025, compared to 79.4% in the same period in 2024, a slight decline of 10 basis points. Overall, gross margin remained relatively stable across both periods.

Current wording

Gross margin was 79.2% for the three months ended March 31, 2026, compared to 79.1% in the same period in 2025, an increase of 10 basis points. Overall, gross margin remained relatively stable between periods.

Previous wording

Operations, product, and technology expenses increased $5.2 million, or 15.8%, for the three months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $3.0 million increase in personnel-related costs, primarily driven by distribution center-related labor costs to support greater supply availability for customers, a $1.2 million increase in inbound shipping costs, primarily driven by higher supply volume, and a $1.0 million increase in facilities, technology and other distribution center-related 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.

Current wording

Operations, product, and technology expenses increased $5.9 million, or 16.9%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to a $3.6 million increase in personnel-related costs, mainly reflecting distribution center headcount, a $1.7 million increase in inbound shipping costs driven by higher supply volume, and a $0.7 million increase in facilities, technology and other distribution center-related costs. We expect shipping rates to increase in the near term driven by fuel surcharges. The increase in operations, product, and technology expenses as a percentage of revenue reflects higher labor and inbound shipping costs associated with increased order volume.

Previous wording

Marketing expenses increased $3.3 million, or 25.4%, for the three months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $3.4 million increase in advertising costs related to our marketing initiatives aimed at driving customer engagement and platform growth. The decrease in marketing expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue.

Current wording

Marketing expenses increased $1.8 million, or 13.7%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to a $1.9 million increase in advertising costs related to our marketing initiatives aimed at driving customer engagement and platform growth. The marketing expenses as a percentage of revenue remained relatively consistent between periods.

Previous wording

Sales, general, and administrative expenses increased $1.9 million, or 14.3%, for the three months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $0.8 increase in payment processing fees associated with increased order volume, and a $0.8 million increase in personnel-related costs, mainly driven by higher headcount and executive bonus program. The decrease in sales, general, and administrative expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue.

Current wording

Sales, general, and administrative expenses increased $1.7 million, or 12.5%, for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to a $1.0 million increase in personnel-related costs, a $0.5 million increase in facilities, technology and other costs, and a $0.4 million increase in payment processing fees driven by higher order volume during the period. This increase was partially offset by a $0.3 million decrease 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.

Previous wording

Interest expense decreased $0.2 million for the three months ended September 30, 2025 as compared to the same period in 2024, primarily due to a lower interest rate environment and reduced outstanding debt balances.

Current wording

Interest expense decreased $0.1 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to a lower interest rate resulting from our recent debt amendment and reduced outstanding debt balances.

Previous wording

We generated positive cash flows from continuing operations of $12.1 million for the nine months ended September 30, 2025. We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”). As of September 30, 2025, we had cash, cash equivalents, restricted cash and short-term marketable securities of $56.1 million. Additionally, we have a Term Loan under which $22.5 million remained available to be drawn as of September 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.

Current wording

We generated positive cash flows from operating activities of $4.8 million for the three months ended March 31, 2026. We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”). As of March 31, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $54.4 million, an increase of $1.3 million from December 31, 2025. Additionally, we have a Term Loan under which $10.0 million remained available to be drawn as of March 31, 2026 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 uses of cash include 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 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

Our primary sources of liquidity are cash flows generated from operations, cash on hand and borrowings available under the Term Loan. Our primary uses of cash include 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 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

Net cash provided by continuing operating activities was $12.1 million during the nine months ended September 30, 2025, compared to $4.2 million for the same period in 2024. The $7.9 million increase in continuing operating cash inflows was primarily due to a $17.3 million decrease in our loss from continuing operations, partially offset by a $6.2 million decrease in non-cash charges and a $3.3 million net use of cash from changes in operating assets and liabilities. The decrease in non-cash charges was primarily related to a $5.3 million reduction in stock-based compensation expense as a result of the March 2024 workforce reorganization, and a $1.4 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 $3.3 million net decrease in operating assets and liabilities was primarily attributable to cash outflows of $3.9 million from accounts payable, accrued and other liabilities, primarily reflecting the timing of vendor payments and executive bonus program for 2025; $3.6 million from other assets, primarily related to lower sales of owned inventory and the timing of payments and receipts related to prepaid expenses and other receivables; and $1.1 million from accounts receivable, reflecting the timing of cash receipts and higher sales volume near the end of the quarter. These were partially offset by cash inflows of $4.8 million from seller payable, primarily reflecting an increase in seller credit issuance.

Current wording

Net cash provided by operating activities was $4.7 million during the three months ended March 31, 2026, compared to $5.7 million for the same period in 2025. The $1.0 million decrease in operating cash inflows was primarily due to a $0.9 million increase in net loss, adjusted for non-cash items, reflecting higher operating losses, as well as a $0.1 million decrease in the net cash provided by changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by $1.2 million in higher cash outflows from accounts receivable reflecting the timing of cash receipts and higher sales volume near the end of the quarter and $0.6 million in higher cash outflows from operating liabilities reflecting higher lease payments. These were partially offset by $2.0 million in higher cash inflows from accounts payable and accrued and other liabilities, primarily reflecting the timing of vendor payments, compensation and taxes.

Previous wording

Net cash used in continuing investing activities for the nine months ended September 30, 2025 was $0.9 million as compared to $7.2 million for the same period in 2024. The $6.3 million increase in cash inflows was primarily due to a $11.7 million decrease in purchases of marketable securities, partially offset by a $4.6 million increase in purchases of property and equipment and a $0.8 million decrease in sale and maturities of marketable securities.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 was $5.0 million as compared to net cash provided by investing activities of $5.1 million for the same period in 2025. The $10.1 million increase in cash outflows was primarily due to a $6.4 million decrease in sale and maturities of marketable securities, a $2.3 million increase in purchases of property and equipment, and a $1.4 million increase in purchases of marketable securities.

Previous wording

Net cash used in continuing financing activities for the nine months ended September 30, 2025 was $0.4 million as compared to $3.9 million for the same period in 2024. The $3.5 million increase in cash inflows was primarily due to a $19.7 million increase in proceeds from issuance of stock-based awards, driven by a higher stock price, partially offset by a $16.2 million increase in payroll taxes paid on stock-based award activity.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $0.6 million as compared to net cash used in financing activities of $1.6 million for the same period in 2025. The $2.2 million increase in cash inflows was primarily due to a $3.3 million increase in proceeds from issuance of stock-based awards and a $0.6 million decrease in payments on debt resulting from our recent debt amendment in the first quarter of 2026, partially offset by a $1.6 million increase in payroll taxes paid on stock-based award activity.

Previous wording

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. Accordingly, our condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Current wording

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. Accordingly, our condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. However, we will cease to qualify as an emerging growth company as of December 31, 2026, the last day of the fiscal year in which the fifth anniversary of our initial public offering occurs. Upon losing emerging growth company status, we will be required to adopt any accounting standards for which we have been using private company effective dates beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2026.