ThredUp Inc.

Previous wording

ThredUp operates one of the world’s largest online resale platforms for apparel, shoes and accessories. Our mission is to inspire the world to think secondhand first. We believe in a sustainable fashion future and we are proud that our business model creates a positive impact to the benefit of our buyers, sellers, clients, employees, investors and the environment. Our custom-built operating platform consists of distributed processing infrastructure, proprietary software and systems and data science expertise. This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in April 2026.

Current wording

ThredUp operates one of the world’s largest online resale platforms for apparel, shoes and accessories. Our mission is to inspire the world to think secondhand first. We believe in a sustainable fashion future and we are proud that our business model creates a positive impact to the benefit of our buyers, sellers, clients, employees, investors and the environment. Our custom-built operating platform consists of distributed processing infrastructure, proprietary software and systems, and data science and artificial intelligence expertise. This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in April 2026.

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 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.

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, enhanced by artificial intelligence-powered search and personalization tools, 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 leverages our generative artificial intelligence technology to allow 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 $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.

Current wording

Gross Profit and Margin: Gross profit totaled $72.5 million for the second quarter of 2026, compared to $61.7 million for the second quarter of 2025, representing an increase of 17.5% year over year. Gross margin was 79.9%, an increase of 40 basis points from 79.5% in the comparable quarter last year.

Previous 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.

Current wording

Net Loss was $5.9 million, or a negative 6.5% of revenue, for the second quarter of 2026, compared to $5.2 million, or a negative 6.7% of revenue, for the second quarter of 2025, representing an increase of 14.7% year over year.

Previous wording

Non-GAAP Adjusted EBITDA(1)was $2.7 million, or 3.4% of revenue, for the first quarter of 2026, compared to $3.8 million, or 5.3% of revenue, for the first quarter of 2025, representing a decrease of 27.9% year over year.

Current wording

Non-GAAP Adjusted EBITDA(1)was $4.8 million, or 5.3% of revenue, for the second quarter of 2026, compared to $3.0 million, or 3.9% of revenue, for the second quarter of 2025, representing an increase of 58.4% year over year.

Previous 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.

Current wording

Active Buyers and Orders: Active Buyers totaled 1.8 million and Orders totaled 1.9 million in the second quarter of 2026, compared to 1.5 million and 1.5 million, respectively, in the second quarter of 2025, representing increases of 20.9% and 21.9%, respectively, year over year.

Previous wording

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

Current wording

Comparison of Financial Results for the Three and Six Months Ended June 30, 2026 and 2025

Previous 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.

Current wording

Revenue increased $13.1 million, or 16.9%, for the three months ended June 30, 2026 as compared to the same period in 2025. The growth in revenue was mainly driven by a 21.9% increase in Orders, supported by higher engagement from both new and returning buyers, partially offset by a 2.9% decrease in the average order value, primarily driven by a higher mix of smaller orders. These trends reflect the continued strength in our core marketplace business and our ongoing focus on driving platform growth.

Previous wording

Gross margin was 79.2% 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.

Current wording

Gross margin was 79.9% for the three months ended June 30, 2026, compared to 79.5% in the same period in 2025, an increase of 40 basis points. Overall, gross margin remained relatively stable across the periods.

Previous 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.

Current wording

Operations, product, and technology expenses increased $7.6 million, or 20.2%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $4.2 million increase in personnel-related costs, mainly reflecting distribution center headcount, a $2.0 million increase in inbound shipping costs driven by higher supply volume, and a $1.4 million increase in facilities, technology and other distribution center-related costs. The increase in operations, product, and technology expenses as a percentage of revenue for the three months ended June 30, 2026 as compared to the same period in 2025 reflects higher labor and inbound shipping costs associated with increased processing volume.

Previous 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.

Current wording

Marketing expenses increased $1.6 million, or 9.6%, for the three months ended June 30, 2026 as compared to the same period in 2025, which was primarily due to an 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 for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily due to increased operating leverage resulting from higher revenue.

Previous 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.

Current wording

Sales, general, and administrative expenses increased $2.5 million, or 19.0%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $1.5 million increase in personnel-related costs, of which $1.0 million was attributable to stock-based compensation, a $0.4 million increase in professional services, a $0.3 million increase in payment processing fees driven by higher gross sales volume during the period, and a $0.3 million increase in facilities, technology and other costs. The sales, general, and administrative expenses as a percentage of revenue remained consistent across the periods.

Previous 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.

Current wording

Interest expense decreased $0.2 million for the three months ended June 30, 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

Other income, net decreased $0.3 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to a gain recognized on a non-marketable equity investment in the first quarter of 2025.

Current wording

Other income, net, decreased $0.4 million for the six months ended June 30, 2026 as compared to the same period in 2025, primarily due to a gain recognized on a non-marketable equity investment in the first quarter of 2025.

Previous 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.

Current wording

We generated positive cash flows from operating activities of $9.2 million for the six months ended June 30, 2026. We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”). As of June 30, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $57.4 million, an increase of $4.3 million from December 31, 2025. Additionally, we have a Term Loan under which $10.0 million remained available to be drawn as of June 30, 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

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.

Current wording

Net cash provided by operating activities was $9.2 million during the six months ended June 30, 2026, compared to $6.1 million for the same period in 2025. The $3.1 million increase in operating cash inflows was primarily due to a $0.8 million improvement in net loss, adjusted for non-cash items, as well as a $2.3 million increase in the net cash provided by changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by $3.3 million in higher cash inflows from accounts payable and accrued and other liabilities, primarily reflecting the timing of vendor payments and compensation, partially offset by $0.9 million in higher cash outflows from operating liabilities reflecting higher lease payments.

Previous 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.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 was $7.5 million as compared to net cash provided by investing activities of $1.0 million for the same period in 2025. The $8.4 million increase in cash outflows was primarily due to a $5.6 million decrease in sale and maturities of marketable securities, a $1.7 million increase in purchases of property and equipment, and a $1.1 million increase in purchases of marketable securities.

Previous 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.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026 was $1.8 million as compared to $2.1 million for the same period in 2025. The $0.3 million decrease in cash inflows was primarily due to a $6.5 million decrease in proceeds from issuance of stock-based awards, partially offset by a $4.7 million decrease in withholding taxes paid on stock-based award activity and a $1.5 million decrease in payments on debt resulting from our debt amendment in the first quarter of 2026.