TheRealReal, Inc.
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
REAL$12.87-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001573221-26-000053
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001573221-26-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 150 previous paragraphs and 157 current paragraphs.
94 unchanged; 46 reworded; 15 added; 8 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 30 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
(3) One time expenses for the three and nine months ended September 30, 2025 consist of employee severance costs associated with a departmental reorganization, including certain executives, recorded within Marketing and Selling, General and Administrative expenses on the condensed statements of operations.
Current report
Consignment revenue gross margin decreased by 6 basis points in the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Current report
Cost of shipping services revenue increased by $0.2 million, or 2%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to a 15% increase in the number of orders, partially offset by lower carrier costs.
Current report
Shipping services revenue gross margin increased by 1,183 basis points for the three months ended September 30, 2026, primarily due to an increase in buyer shipping fees and lower carrier costs.
Current report
Our total gross margin increased by 64 basis points in the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to higher shipping services revenue gross margin.
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
Consignment revenue gross margin decreased by 11 basis points in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Current report
Direct revenue gross margin decreased by 55 basis points for the nine months ended September 30, 2026, primarily due to category mix of products sold and increased inventory adjustments during the nine months ended September 30, 2026.
Current report
Cost of shipping services revenue increased by $2.4 million, or 7%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily due to a 10% increase in the number of orders.
Current report
The shipping services revenue gross margin increased by 648 basis points for the nine months ended September 30, 2026, primarily due to higher buyer shipping fees and lower carrier costs.
Current report
Gain on Extinguishment of Debt
Current report
On October 9, 2026, we entered into the Credit Agreement, providing for a $150.0 million Term Loan Facility and a $25.0 million Revolving Loan Facility (together, the “Facilities”). On October 19, 2026 (the “Funding Date”), we borrowed $150.0 million under the Term Loan Facility and used the proceeds, together with cash on hand, to redeem in full the outstanding 2029 Notes.
Current report
Loans under the Facilities initially bear interest at adjusted Term SOFR plus 5.75% per annum, subject to adjustment based on our first lien net leverage ratio, and interest is payable entirely in cash. The Term Loan Facility amortizes in equal quarterly installments of 0.25% of its initial principal amount, beginning on the last business day of the first full fiscal quarter ending after the Funding Date. The Facilities mature on October 19, 2033. However, they will mature on the date that is 91 days before the stated maturity of the 2031 Notes if $25.0 million or more in aggregate principal amount of the 2031 Notes is outstanding on that date. We must prepay the Term Loan Facility with a percentage of Excess Cash Flow (as defined in the Credit Agreement), with a percentage of net cash proceeds from certain asset sales and casualty events, and with the net cash proceeds of certain debt issuances. Voluntary prepayments of the Term Loan Facility are subject to a prepayment premium equal to (i) prior to the first anniversary of the Funding Date, 2.00% of the principal amount prepaid and (ii) after the first anniversary of the Funding Date but prior to the second anniversary of the Funding Date, 1.00% of the principal amount prepaid. On and after the second anniversary of the Funding Date, no prepayment premium applies. On or prior to the first anniversary, we may prepay up to $50.0 million with the proceeds of permitted equity issuances without a prepayment premium.
Current report
The Facilities are secured by a first priority lien on substantially all of our assets, subject to certain exceptions, and will be guaranteed by certain of our future subsidiaries, if any. Beginning with the first full fiscal quarter following October 9, 2026, the Credit Agreement requires us to maintain a first lien gross leverage ratio of no more than 4.75 to 1.00 through the fiscal quarter ending December 31, 2028 and 4.25 to 1.00 thereafter, and to maintain Liquidity (as defined in the Credit Agreement) of at least $25.0 million as of the last day of each fiscal quarter. The Credit Agreement also contains customary affirmative and negative covenants and events of default, including an event of default relating to a change of control.
Current report
On October 19, 2026, we redeemed all of the outstanding 2029 Notes at par, plus accrued and unpaid interest, using the proceeds of the Term Loan Facility together with cash on hand. Following the redemption, no 2029 Notes remain outstanding (see "—Liquidity and Capital Resources" above and Note 14 — Subsequent Events).
Removed paragraphs (8)
Previous report
Consignment revenue gross margin decreased by 15 basis points in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous report
Shipping services revenue gross margin increased by 255 basis points for the three months ended June 30, 2026, primarily due to an increase in shipping fees.
Previous report
Our total gross margin increased by 10 basis points in the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
Consignment revenue gross margin decreased by 13 basis points in the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Previous report
Direct revenue gross margin increased by 31 basis points for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Previous report
Cost of shipping services revenue increased by $2.2 million, or 9%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an 8% increase in the number of orders.
Previous report
The shipping services revenue gross margin increased by 365 basis points for the six months ended June 30, 2026, primarily due to higher shipping fees.
Reworded paragraphs (46)
Previous wording
•Consignment revenue. When we sell goods through our online marketplace or retail stores on behalf of our consignors, we retain a percentage of the proceeds, which we refer to as our take rate. Take rates vary depending on the total value of goods sold through our online marketplace on behalf of a particular consignor as well as the category and price point of the items. In the three months ended June 30, 2026 and 2025, our overall take rate on consigned goods was 35.9% and 37.9%, respectively. The decrease in our take rate was due to sales mix into higher value items. Additionally, we earn revenue from our subscription program, First Look, in which we offer buyers early access to the items we sell in exchange for a monthly fee.
Current wording
•Consignment revenue. When we sell goods through our online marketplace or retail stores on behalf of our consignors, we retain a percentage of the proceeds, which we refer to as our take rate. Take rates vary depending on the total value of goods sold through our online marketplace on behalf of a particular consignor as well as the category and price point of the items. In the three months ended September 30, 2026 and 2025, our overall take rate on consigned goods was 36.8% and 37.9%, respectively. The decrease in our take rate was due to sales mix into higher value items. Additionally, we earn revenue from our subscription program, First Look, in which we offer buyers early access to the items we sell in exchange for a monthly fee.
Previous wording
We generate revenue from orders processed through our website, mobile app and retail stores. Our omni-channel experience enables buyers to purchase anytime and anywhere. We have a global base of more than 40 million members as of June 30, 2026. A member is any user who has registered an email address on our website or downloaded our mobile app, thereby agreeing to our terms of service.
Current wording
We generate revenue from orders processed through our website, mobile app and retail stores. Our omni-channel experience enables buyers to purchase anytime and anywhere. We have a global base of more than 45 million members as of September 30, 2026. A member is any user who has registered an email address on our website or downloaded our mobile app, thereby agreeing to our terms of service.
Previous wording
The key operating and financial metrics that we use to assess the performance of our business are set forth below for the three and six months ended June 30, 2026 and 2025.
Current wording
The key operating and financial metrics that we use to assess the performance of our business are set forth below for the three and nine months ended September 30, 2026 and 2025.
Previous wording
(1) The gain on extinguishment of debt for the six months ended June 30, 2025 reflects the difference between the carrying value of the February 2025 Exchanged Notes and the fair value of the 2031 Notes.
Current wording
(1) The gain on extinguishment of debt for the three and nine months ended September 30, 2025 reflects the difference between the carrying value of the 2025 Exchanged Notes and the fair value of the 2031 Notes.
Previous wording
(2) The change in fair value of warrant liability for the three and six months ended June 30, 2026 and June 30, 2025 reflects the remeasurement of the Warrants issued by the Company in connection with the 2024 Note Exchange in February 2024.
Current wording
(2) The change in fair value of warrant liability for the three and nine months ended September 30, 2026 and September 30, 2025 reflects the remeasurement of the Warrants issued by the Company in connection with the 2024 Note Exchange in February 2024.
Previous wording
Consignment revenue increased by $19.6 million, or 15% in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase in revenue was driven primarily by an increase in consignment GMV offset by a decrease in our take rate during the three months ended June 30, 2026. GMV growth during the three months ended June 30, 2026 was driven by a 13% increase in our AOV and 8% increase in the number of orders.
Current wording
Consignment revenue increased by $24.7 million, or 18% in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in revenue was driven primarily by an increase in consignment GMV offset by a decrease in our take rate during the three months ended September 30, 2026. GMV growth during the three months ended September 30, 2026 was driven by an 8% increase in our AOV and a 15% increase in the number of orders.
Previous wording
Our take rate decreased to 35.9% from 37.9% during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to sales mix into higher value items.
Current wording
Our take rate decreased to 36.8% from 37.9% during the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to sales mix into higher value items.
Previous wording
Direct revenue increased by $5.3 million, or 26%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by higher sales of items acquired from businesses, individual sellers, and from out of policy returns. Increases in out of policy returns are consistent with the growth in our consignment business. We recognize direct revenue on a gross basis upon shipment of the purchased good to the buyer. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the growth of consignment revenue.
Current wording
Direct revenue increased by $4.5 million, or 19%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by higher sales of items acquired from businesses, individual sellers, and from out of policy returns. Increases in out of policy returns are consistent with the growth in our consignment business. We recognize direct revenue on a gross basis upon shipment of the purchased good to the buyer. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the growth of consignment revenue.
Previous wording
Shipping services revenue increased by $2.5 million, or 16%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to an 8% increase in the number of orders and an increase in shipping fees in the three months ended June 30, 2026.
Current wording
Shipping services revenue increased by $3.4 million, or 21%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025 primarily due to a 15% increase in the number of orders and an increase in buyer shipping fees compared to the prior year.
Previous wording
Cost of consignment revenue increased by $2.3 million, or 17%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, driven by higher consignment volume.
Current wording
Cost of consignment revenue increased by $2.7 million, or 19%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025, driven by higher consignment volume.
Previous wording
Cost of direct revenue increased by $3.2 million, or 19%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily attributable to the increase in direct revenue compared to the prior year.
Current wording
Cost of direct revenue increased by $4.1 million, or 23%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to the increase in direct revenue compared to the prior year.
Previous wording
Direct revenue gross margin increased by 471 basis points for the three months ended June 30, 2026, primarily due to decreased inventory adjustments during the three months ended June 30, 2026.
Current wording
Direct revenue gross margin decreased by 217 basis points for the three months ended September 30, 2026, primarily due to category mix of products sold and increased inventory adjustments during the three months ended September 30, 2026.
Previous wording
Marketing expense increased by $2.8 million, or 18%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to an increase in advertising costs due to increased advertising volumes and changes in the composition of marketing spend.
Current wording
Marketing expense increased by $4.1 million, or 29%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily due to an increase in advertising costs due to increased advertising volumes and changes in the composition of marketing spend.
Previous wording
As a percent of revenue, marketing expense increased to 10% from 9% in the three months ended June 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments.
Current wording
As a percent of revenue, marketing expense increased to 9% from 8% in the three months ended September 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments.
Previous wording
Operations and technology expense increased by $5.7 million, or 8%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was driven by higher employee costs due to increased volume, and an increase in software and service expenses. The increased employee costs were partially offset by realized efficiencies in our fulfillment processes that moderated the overall increase.
Current wording
Operations and technology expense increased by $7.8 million, or 11%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was driven by higher employee costs due to increased volume, and an increase in software expenses. The increased employee costs were partially offset by realized efficiencies in our fulfillment processes that moderated the overall increase.
Previous wording
As a percent of revenue, operations and technology expense decreased to 39% from 42% in the three months ended June 30, 2026 and 2025, respectively, due to improved operating efficiencies in our authentication centers. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.
Current wording
As a percent of revenue, operations and technology expense decreased to 38% from 41% in the three months ended September 30, 2026 and 2025, respectively, due to improved operating efficiencies in our authentication centers. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.
Previous wording
Selling, general and administrative expense increased by $4.4 million, or 9%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to higher employee costs and higher professional services fees.
Current wording
Selling, general and administrative expense increased by $4.6 million, or 9%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily due to higher employee costs and higher professional services fees, partially offset by employee severance costs that occurred in the prior year.
Previous wording
As a percent of revenue, selling, general and administrative expense decreased to 27% from 29% in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.
Current wording
As a percent of revenue, selling, general and administrative expense decreased to 27% from 30% in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.
Previous wording
The Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company's common stock as part of the Note Exchange in February 2024. The warrant liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the six months ended June 30, 2026, we incurred a gain of $28.8 million due to the decrease in the fair value of the warrants outstanding at June 30, 2026. The decrease in the fair value of the warrant liability was primarily driven by a decrease in the Company’s stock price during the period, which resulted in a lower valuation of the warrants.
Current wording
The Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company's common stock as part of the Note Exchange in February 2024. The warrant liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the three months ended September 30, 2026, we incurred a gain of $21.2 million due to the decrease in the fair value of the warrants outstanding at September 30, 2026. The decrease in the fair value of the warrant liability was primarily driven by a decrease in the Company’s stock price during the period, which resulted in a lower valuation of the warrants.
Previous wording
During the six months ended June 30, 2025, the Company recognized a gain on extinguishment of debt of $37.1 million due to the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2031 Notes during the six months ended June 30, 2025 (See Note 7 — Convertible Senior Notes, Net). No such transactions occurred in the six months ended June 30, 2026.
Current wording
During the three months ended September 30, 2025, the Company recognized a gain on extinguishment of debt of $3.7 million due to the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2031 Notes during the three months ended September 30, 2025 (See Note 7 — Convertible Senior Notes, Net). No such transactions occurred in the three months ended September 30, 2026.
Previous wording
Interest income decreased by $0.2 million, or 19%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 due to lower average cash balances.
Current wording
Interest income remained relatively flat for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.
Previous wording
Interest expense increased by $0.3 million, or 4% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to the interest expense related to the 2031 Notes issued in August 2025.
Current wording
Interest expense increased by $0.4 million, or 6% for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to the interest expense related to the 2031 Notes issued in August 2025.
Previous wording
Consignment revenue increased by $41.7 million, or 17%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in revenue was driven primarily by an increase in consignment GMV and offset by a decrease in take rate. GMV growth was driven by a 14% increase in our AOV and 8% increase in the number of orders during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current wording
Consignment revenue increased by $66.4 million, or 17%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase in revenue was driven primarily by an increase in consignment GMV and offset by a decrease in take rate. GMV growth was driven by a 12% increase in our AOV and 10% increase in the number of orders during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Previous wording
Our take rate decreased to 36.2% from 38.2% during the six months ended June 30, 2026 compared to the same period last year due to sales mix into higher value items.
Current wording
Our take rate decreased to 36.4% from 38.1% during the nine months ended September 30, 2026 compared to the same period last year due to sales mix into higher value items.
Previous wording
Direct revenue increased by $10.6 million, or 26%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by higher sales of items acquired from businesses, individual sellers, and from out of policy returns. Increases in out of policy returns are consistent with the growth in our consignment business. We recognize direct revenue upon shipment of the purchased good to the buyer. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the amount of consignment revenue.
Current wording
Direct revenue increased by $15.1 million, or 24%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by higher sales of items acquired from businesses, individual sellers, and from out of policy returns. Increases in out of policy returns are consistent with the growth in our consignment business. We recognize direct revenue upon shipment of the purchased good to the buyer. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the amount of consignment revenue.
Previous wording
Shipping services revenue increased by $4.7 million, or 15%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to an 8% increase in the number of orders in the six months ended June 30, 2026 and an increase in shipping fees.
Current wording
Shipping services revenue increased by $8.1 million, or 17%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to a 10% increase in the number of orders in the nine months ended September 30, 2026 and an increase in buyer shipping fees.
Previous wording
Cost of consignment revenue increased by $4.8 million, or 18%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, driven by higher consignment volume.
Current wording
Cost of consignment revenue increased by $7.5 million, or 18%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, driven by higher consignment volume.
Previous wording
Cost of direct revenue increased by $8.3 million, or 26%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to the increase in direct revenue compared to the prior year.
Current wording
Cost of direct revenue increased by $12.4 million, or 25%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to the increase in direct revenue compared to the prior year.
Previous wording
Our total gross margin decreased by 20 basis points for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Gross margin may vary from period to period.
Current wording
Our total gross margin increased by 9 basis points for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Gross margin may vary from period to period.
Previous wording
Marketing expense increased by $5.5 million, or 18%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to an increase in advertising costs due to increased advertising volumes and changes in the composition of marketing spend.
Current wording
Marketing expense increased by $9.6 million, or 21%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily due to an increase in advertising costs due to increased advertising volumes and changes in the composition of marketing spend.
Previous wording
As a percent of revenue, marketing expense remained flat at 10% in the six months ended June 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments.
Current wording
As a percent of revenue, marketing expense remained flat at 9% in the nine months ended September 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments.
Previous wording
Operations and technology expense increased by $11.5 million, or 8%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was driven by higher employee costs due to increased volume, and an increase in software and service expenses. The increased employee costs were partially offset by realized efficiencies in our fulfillment processes that moderated the overall increase.
Current wording
Operations and technology expense increased by $19.3 million, or 9%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was driven by higher employee costs due to increased volume, and an increase in software expenses. The increased employee costs were partially offset by realized efficiencies in our fulfillment processes that moderated the overall increase.
Previous wording
As a percent of revenue, operations and technology expense decreased to 39% from 42% in the six months ended June 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments. We expect these expenses to decrease as a percentage of revenue over the longer term.
Current wording
As a percent of revenue, operations and technology expense decreased to 39% from 41% in the nine months ended September 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments. We expect these expenses to decrease as a percentage of revenue over the longer term.
Previous wording
Selling, general and administrative expense increased by $6.7 million, or 7%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to higher employee costs and higher professional services fees.
Current wording
Selling, general and administrative expense increased by $11.3 million, or 8%, in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily due to higher employee costs and higher professional services fees, partially offset by severance charges incurred in the prior year.
Previous wording
As a percent of revenue, selling, general and administrative expense decreased to 27% from 30% in the six months ended June 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.
Current wording
As a percent of revenue, selling, general and administrative expense decreased to 28% from 30% in the nine months ended September 30, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.
Previous wording
The Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company's common stock as part of the Note Exchange in February 2024. The warrant liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the three months ended June 30, 2026, we incurred a loss of $18.6 million due to the increase in the fair value of the warrants outstanding at June 30, 2026. The increase in the fair value of the warrant liability was primarily driven by an increase in the Company’s stock price during the period, which resulted in a higher valuation of the warrants.
Current wording
The Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company's common stock as part of the Note Exchange in February 2024. The warrant liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the nine months ended September 30, 2026, we incurred a gain of $50.0 million due to the decrease in the fair value of the warrants outstanding at September 30, 2026. The decrease in the fair value of the warrant liability was primarily driven by a decrease in the Company’s stock price during the period, which resulted in a lower valuation of the warrants.
Previous wording
Interest income decreased by $0.6 million, or 23% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to lower average cash balances.
Current wording
Interest income decreased by $0.6 million, or 17% in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due to lower average cash balances.
Previous wording
Interest expense increased by $1.2 million, or 9% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to the full-period impact of the 2031 Notes during the six months ended June 30, 2026 compared to a partial period of interest expense during the six months ended June 30, 2025.
Current wording
Interest expense increased by $1.6 million, or 8% in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily due to the full-period impact of the 2031 Notes during the nine months ended September 30, 2026 compared to a partial period of interest expense during the nine months ended September 30, 2025.
Previous wording
As of June 30, 2026, we had cash and cash equivalents of $119.1 million and an accumulated deficit of $1,283.9 million. We had restricted cash of $14.8 million as of June 30, 2026, consisting of cash deposited with a financial institution as collateral for our letters of credit, facility leases and credit cards. Since inception, we have generated negative cash flows from operations and have primarily financed our operations through equity and convertible debt financings. However, during the years ended December 31, 2025 and 2024, we generated positive cash flow from operations.
Current wording
As of September 30, 2026, we had cash and cash equivalents of $130.4 million and an accumulated deficit of $1,267.9 million. We had restricted cash of $14.8 million as of September 30, 2026, consisting of cash deposited with a financial institution as collateral for our letters of credit, facility leases and credit cards. Since inception, we have generated negative cash flows from operations and have primarily financed our operations through equity and convertible debt financings. However, during the years ended December 31, 2025 and 2024, we generated positive cash flow from operations.
Previous wording
In July 2019, we received net proceeds of $315.5 million upon completion of our IPO on July 2, 2019. In June 2020, we received net proceeds of $143.3 million from the issuance of our 2025 Notes and the related capped call transactions. In March 2021, we received net proceeds of $244.5 million from our 2028 Notes and the related capped call transactions. In February 2024, we exchanged $145.8 million of our 2025 Notes and $6.5 million of our 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (see Note 6 — Non-convertible Notes, Net). In February 2025, we exchanged $183.3 million aggregate principal amount of the 2028 Notes for $146.7 million aggregate principal amount of our new 2031 Notes in the February 2025 Note Exchange (see Note 7 — Convertible Senior Notes, Net). In June 2025, the 2025 Notes matured, and the Company repaid the outstanding principal amount and accrued interest in full. The total cash payment upon maturity was $27.2 million, which included the outstanding principal amount and accrued interest through the maturity date. In August 2025, we exchanged $49.5 million aggregate principal amount of the 2028 Notes for $43.4 million aggregate principal amount of additional 2031 Notes (see Note 7 — Convertible Senior Notes, Net). As a result of the 2024 Note Exchange and 2025 Note Exchanges, we significantly extended the average maturity date of our outstanding indebtedness.
Current wording
In July 2019, we received net proceeds of $315.5 million upon completion of our IPO on July 2, 2019. In June 2020, we received net proceeds of $143.3 million from the issuance of our 2025 Notes and the related capped call transactions. In March 2021, we received net proceeds of $244.5 million from our 2028 Notes and the related capped call transactions. In February 2024, we exchanged $145.8 million of our 2025 Notes and $6.5 million of our 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (see Note 6 — Non-convertible Notes, Net). In February 2025, we exchanged $183.3 million aggregate principal amount of the 2028 Notes for $146.7 million aggregate principal amount of our new 2031 Notes in the February 2025 Note Exchange (see Note 7 — Convertible Senior Notes, Net). In June 2025, the 2025 Notes matured, and the Company repaid the outstanding principal amount and accrued interest in full. The total cash payment upon maturity was $27.2 million, which included the outstanding principal amount and accrued interest through the maturity date. In August 2025, we exchanged $49.5 million aggregate principal amount of the 2028 Notes for $43.4 million aggregate principal amount of additional 2031 Notes (see Note 7 — Convertible Senior Notes, Net). As a result of the 2024 Note Exchange and 2025 Note Exchanges, and the redemption of the 2029 Notes discussed below, we significantly extended the average maturity date of our outstanding indebtedness.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
During the nine months ended September 30, 2025, the Company recognized a gain on extinguishment of debt of $40.8 million due to the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2031 Notes during the nine months ended September 30, 2025 (See Note 7 — Convertible Senior Notes, Net). No such transactions occurred in the nine months ended September 30, 2026.
Current report — wording carried from elsewhere
Net Cash Provided by (Used in) Operating Activities
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Cost of shipping services revenue increased by $1.3 million, or 11%, in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to an 8% increase in the number of orders.
Previous report — wording carried elsewhere
Net Cash Used in Operating Activities