1stdibscom Inc
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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, 2024 · Filed Nov 8, 2024
DIBS$6.02-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001600641-24-000154
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001600641-24-000194
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 95 previous paragraphs and 97 current paragraphs.
68 unchanged; 21 reworded; 7 added; 5 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 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 (7)
Current report
Cost of revenue was $6.2 million for the three months ended September 30, 2024, as compared to $5.5 million for the three months ended September 30, 2023. The increase of $0.6 million, or 12%, was primarily driven by a $0.4 million increase in net shipping expenses and a $0.2 million increase in credit card processing fees.
Current report
Sales and marketing expense was $9.1 million for the three months ended September 30, 2024, as compared to $8.4 million for the three months ended September 30, 2023. The increase of $0.7 million, or 9%, was primarily driven by a $0.2 million increase in salaries and benefits and a $0.2 million increase in stock-based compensation expense resulting from our annual compensation increases in March. There was also a $0.2 million increase in general marketing spend, including performance marketing.
Current report
Provision for transaction losses was $0.9 million for the three months ended September 30, 2024, as compared to $0.7 million for the three months ended September 30, 2023. The increase of $0.3 million, or 38%, was primarily driven by an increase in bad debt.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
Technology development expense was $15.7 million for the nine months ended September 30, 2024, as compared to $17.2 million for the nine months ended September 30, 2023. The decrease of $1.5 million, or 9%, was primarily driven by a $1.9 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023, which were partially offset by annual compensation increases in March and minor increases in the normal course.
Current report
During the three months ended September 30, 2024, 191,935 shares of our common stock were purchased under the 2024 Stock Repurchase Program for a total cost of $0.9 million. During the nine months ended September 30, 2024, 4.3 million shares of our common stock were purchased for a total cost of $22.8 million and includes purchases under both the 2023 and the 2024 Stock Repurchase Programs.
Current report
Net cash used in financing activities for the nine months ended September 30, 2023 was $1.2 million and was driven primarily by $1.3 million of purchases of our common stock as part of our 2023 Stock Repurchase Program.
Removed paragraphs (5)
Previous report
Cost of revenue was generally flat with $6.3 million for the three months ended June 30, 2024 and 2023. There was a $0.3 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023, which was partially offset by increases of $0.2 million in credit card processing fees and $0.1 million in consulting expenses.
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Previous report
Sales and marketing expense was $18.4 million for the six months ended June 30, 2024, as compared to $19.6 million for the six months ended June 30, 2023. The decrease of $1.2 million, or 6%, was primarily driven by a $2.1 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023. These decreases were partially offset by a $1.2 million increase in performance-based marketing spend which contributed to an increase in GMV.
Previous report
Technology development expense was $10.2 million for the six months ended June 30, 2024, as compared to $12.7 million for the six months ended June 30, 2023. The decrease of $2.5 million, or 19%, was primarily driven by a $2.3 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023.
Previous report
Net cash provided by financing activities for the six months ended June 30, 2023, was less than $0.1 million and related to proceeds from the exercise of stock options.
Reworded paragraphs (21)
Previous wording
Net revenue was $44.3 million for the six months ended June 30, 2024, as compared to $43.1 million for the six months ended June 30, 2023. The increase of $1.2 million, or 3%, was primarily driven by various strategic initiatives we actioned to improve our take rates, including commission re-tiering.
Current wording
Net revenue was $21.2 million for the three months ended September 30, 2024, as compared to $20.7 million for the three months ended September 30, 2023. The increase of $0.5 million, or 3%, was primarily driven by various strategic initiatives we actioned to improve our take rates, including commission re-tiering.
Previous wording
Our marketplace transaction fees represent the majority of our net revenue and accounted for 75% and 71% of our net revenue for the three months ended June 30, 2024 and 2023, respectively. Subscription fees accounted for 21% and 24% of our net revenue for the three months ended June 30, 2024 and 2023, respectively.
Current wording
Our marketplace transaction fees represent the majority of our net revenue and accounted for 74% and 71% of our net revenue for the three months ended September 30, 2024 and 2023, respectively. Subscription fees accounted for 22% and 24% of our net revenue for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Gross profit was $31.9 million and gross margin was 72.1% for the six months ended June 30, 2024, as compared to gross profit of $29.5 million and gross margin of 68.4% for the six months ended June 30, 2023. The increase in gross profit and gross margin for the six months ended June 30, 2024 was primarily driven by our cost savings initiatives in the second half of 2023 which contributed to a decrease in our cost of revenue, as well as our initiatives to improve our take rates and net revenue, as outlined above.
Current wording
Gross profit was $15.0 million and gross margin was 71.0% for the three months ended September 30, 2024, as compared to gross profit of $15.2 million and gross margin of 73.3% for the three months ended September 30, 2023. The decrease in gross profit and gross margin for the three months ended September 30, 2024 was primarily driven by cost of revenue increasing more than the increase in net revenue as outlined above.
Previous wording
Technology development expense was $5.5 million for the three months ended June 30, 2024, as compared to $6.9 million for the three months ended June 30, 2023. The decrease of $1.4 million, or 21%, was primarily driven by a $1.5 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023.
Current wording
Technology development expense was $5.5 million for the three months ended September 30, 2024, as compared to $4.5 million for the three months ended September 30, 2023. The increase of $1.0 million, or 21%, was primarily driven by a $0.5 million increase in salaries and benefits and a $0.3 million increase in stock-based compensation expense resulting from our annual compensation increases in March.
Previous wording
General and administrative expense was $6.9 million for the three months ended June 30, 2024, as compared to $7.5 million for the three months ended June 30, 2023. The decrease of $0.6 million, or 8%, was primarily driven by a $0.9 million decrease in lease expense, net, primarily due to sublease income related to our sublease for our old corporate headquarters signed in August 2023 and a $0.4 million decrease related to lower rates negotiated with vendors, including lower liability insurance expense. These decreases were partially offset by a $0.5 million increase in salaries and benefits and a $0.4 million increase in stock-based compensation expense, primarily due to our annual compensation increases and equity grants which occur annually in March.
Current wording
General and administrative expense was generally flat with $6.9 million for the three months ended September 30, 2024, as compared to $6.8 million for the three months ended September 30, 2023. There was a $0.4 million increase in stock based compensation expense relating to our annual compensation increases in March, and a $0.4 million increase in professional fees relating to additional consulting projects. These were partially offset by a $0.5 million decrease in lease expense, net, primarily due to sublease income related to our August 2023 sublease for our former New York City corporate headquarters.
Previous wording
Other income, net was $2.1 million for each of the three months ended June 30, 2024 and 2023 and was primarily due to interest income on our cash, cash equivalents, and short-term investments.
Current wording
Other income, net was $1.7 million for the three months ended September 30, 2024, as compared to $1.9 million for the three months ended September 30, 2023 and was primarily due to interest income on our cash, cash equivalents, and short-term investments. The decrease of $0.2 million, or 11%, was primarily driven by lower cash, cash equivalents, and short-term investments for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous wording
Net revenue was $22.2 million for the three months ended June 30, 2024, as compared to $20.9 million for the three months ended June 30, 2023. The increase of $1.3 million, or 6%, was primarily driven by an increase to GMV and various strategic initiatives we actioned to improve our take rates, including commission re-tiering.
Current wording
Net revenue was $65.5 million for the nine months ended September 30, 2024, as compared to $63.8 million for the nine months ended September 30, 2023. The increase of $1.7 million, or 3%, was primarily driven by various strategic initiatives we actioned to improve our take rates, including commission re-tiering.
Previous wording
Our marketplace transaction fees represent the majority of our net revenue and accounted for 75% and 71% of our net revenue for the six months ended June 30, 2024 and 2023, respectively. Subscription fees accounted for 22% and 24% of our net revenue for the six months ended June 30, 2024 and 2023, respectively.
Current wording
Our marketplace transaction fees represent the majority of our net revenue and accounted for 74% and 71% of our net revenue for the nine months ended September 30, 2024 and 2023, respectively. Subscription fees accounted for 22% and 24% of our net revenue for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Cost of revenue was $12.4 million for the six months ended June 30, 2024, as compared to $13.6 million for the six months ended June 30, 2023. The decrease of $1.3 million, or 9%, was primarily driven by a $0.7 million decrease in salaries and benefits resulting from decreases in headcount from the prior period, primarily related to our reduction in workforce in June 2023, and a $0.4 million decrease in depreciation expense.
Current wording
Cost of revenue was $18.5 million for the nine months ended September 30, 2024, as compared to $19.1 million for the nine months ended September 30, 2023. The decrease of $0.6 million, or 3%, was primarily driven by a $0.7 million decrease in salaries and benefits resulting from decreases in average headcount from the prior period, primarily related to our reduction in workforce in June 2023, partially offset by annual compensation increases in March.
Previous wording
Gross profit was $15.9 million and gross margin was 71.7% for the three months ended June 30, 2024, as compared to gross profit of $14.6 million and gross margin of 69.8% for the three months ended June 30, 2023. The increase in gross profit and gross margin for the three months ended June 30, 2024 was primarily driven by our cost savings initiatives in the second half of 2023 which contributed to a decrease in our cost of revenue, as well as our initiatives to improve our take rates and net revenue, as outlined above.
Current wording
Gross profit was $47.0 million and gross margin was 71.7% for the nine months ended September 30, 2024, as compared to gross profit of $44.6 million and gross margin of 70.0% for the nine months ended September 30, 2023. The increase in gross profit and gross margin for the nine months ended September 30, 2024 was primarily driven by our initiatives to improve our take rates and net revenue, as well as our cost savings initiatives in the second half of 2023 which contributed to a decrease in our cost of revenue, as outlined above.
Previous wording
Sales and marketing expense was $9.3 million for the three months ended June 30, 2024, as compared to $9.8 million for the three months ended June 30, 2023. The decrease of $0.5 million, or 5%, was primarily driven by a $1.4 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023. These decreases were partially offset by a $1.0 million increase in performance-based marketing spend which contributed to an increase in GMV.
Current wording
Sales and marketing expense was $27.6 million for the nine months ended September 30, 2024, as compared to $28.0 million for the nine months ended September 30, 2023. The decrease of $0.4 million, or 2%, was primarily driven by a $1.9 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023, partially offset by annual compensation increases in March, and a $1.8 million increase in performance-based marketing spend which contributed to an increase in GMV during the first half of 2024.
Previous wording
General and administrative expense was $13.9 million for the six months ended June 30, 2024, as compared to $15.6 million for the six months ended June 30, 2023. The decrease of $1.7 million, or 11%, was primarily driven by a $1.4 million decrease in lease expense, net, primarily due to sublease income related to our sublease for our old corporate headquarters signed in August 2023, a $1.0 million decrease related to lower rates negotiated with vendors, including lower liability insurance expense, and a $0.9 million decrease in professional fees due to expenses incurred in the six months ended June 30, 2023 related to strategic alternative expenses. These decreases were partially offset by a $0.8 million increase in stock-based compensation expense and a $0.8 million increase in salaries and benefits, primarily due to our annual compensation increases and equity grants which occur annually in March.
Current wording
General and administrative expense was $20.8 million for the nine months ended September 30, 2024, as compared to $22.3 million for the nine months ended September 30, 2023. The decrease of $1.6 million, or 7%, was primarily driven by a $1.8 million decrease in lease expense, net, primarily due to sublease income related to our August 2023 sublease for our former New York City corporate headquarters, a $1.1 million decrease related to lower rates negotiated with vendors, including lower insurance expense, and a $0.5 million decrease in professional fees due to expenses incurred in the nine months ended September 30, 2023 related to strategic alternative expenses. These decreases were partially offset by a $1.2 million increase in stock-based compensation expense and a $0.6 million increase in salaries and benefits, primarily due to our annual compensation increases and equity grants which occur annually in March.
Previous wording
Provision for transaction losses was $0.8 million for the three months ended June 30, 2024, as compared to $0.9 million for the three months ended June 30, 2023. The decrease of $0.1 million, or 7%, was primarily driven by a decrease in damage claims as a result of new policies implemented by us and in partnership with our carriers.
Current wording
Provision for transaction losses was $2.2 million for the nine months ended September 30, 2024, as compared to $2.9 million for the nine months ended September 30, 2023. The decrease of $0.8 million, or 26%, was primarily driven by a decrease in damage claims as a result of new policies implemented by us and in partnership with our carriers.
Previous wording
Other income, net was $4.1 million for the six months ended June 30, 2024, as compared to $4.2 million for the six months ended June 30, 2023 and was due primarily to interest income on our cash, cash equivalents, and short-term investments.
Current wording
Other income, net was $5.8 million for the nine months ended September 30, 2024, as compared to $6.1 million for the nine months ended September 30, 2023 and was due primarily to interest income on our cash, cash equivalents, and short-term investments.
Previous wording
As of June 30, 2024, we had cash, cash equivalents and short-term investments of $110.6 million and an accumulated deficit of $321.5 million. Net cash used in operating activities was $5.7 million during the six months ended June 30, 2024. We expect operating losses and negative cash flows from operations to continue in the foreseeable future as we continue to strategically invest in growth activities. Our principal use of cash is to fund our operations including platform development to support our strategic initiatives.
Current wording
As of September 30, 2024, we had cash, cash equivalents and short-term investments of $109.4 million and an accumulated deficit of $327.1 million. Net cash used in operating activities was $5.7 million during the nine months ended September 30, 2024. We expect operating losses and negative cash flows from operations to continue in the foreseeable future as we continue to strategically invest in growth activities. Our principal use of cash is to fund our operations including platform development to support our strategic initiatives and anticipated share repurchases under the 2024 Stock Repurchase Program.
Previous wording
In August 2023, the Board of Directors authorized a Stock Repurchase Program to repurchase up to an aggregate of $20.0 million of our common stock. In June 2024, the Board authorized an increase to our Stock Repurchase Program to an aggregate authorized repurchase amount of $25.5 million. During the six months ended June 30, 2024, 4.1 million shares of our common stock were purchased for a total cost of $21.9 million. On June 10, 2024, we announced the completion of our Stock Repurchase Program.
Current wording
In August 2023, the Board of Directors authorized the 2023 Stock Repurchase Program to repurchase up to an aggregate of $20.0 million of our common stock. In June 2024, the Board of Directors authorized an increase to our 2023 Stock Repurchase Program to an aggregate authorized repurchase amount of $25.5 million. On June 10, 2024, we announced the completion of our 2023 Stock Repurchase Program.
Previous wording
Net cash used in operating activities was $5.7 million for the six months ended June 30, 2024, and was driven primarily by a $3.6 million change in accounts payable and accrued expenses due to timing of payments and invoices, including our annual bonuses which were paid in March 2024 and a $1.4 million change in operating lease liabilities due to the continued lease payments on our previous and current NYC headquarters, partially offset by our sublease income.
Current wording
Net cash used in operating activities was $5.7 million for the nine months ended September 30, 2024, and was driven primarily by a $2.2 million decrease in accounts payable and accrued expenses due to the timing of payments and invoices, a $2.2 million decrease in operating lease liabilities due to the continued lease payments on our previous and current NYC headquarters, partially offset by our sublease income, and a $1.8 million decrease in other current liabilities and other liabilities related to payments to settle multiple Sales and other non-income tax contingencies. Theses decreases were partially offset by a $2.7 million increase in payables due to sellers due to timing of the bi-weekly payments we make to our sellers.
Previous wording
Net cash used in operating activities was $9.3 million for the six months ended June 30, 2023, and was driven primarily by net revenue decreasing at a faster pace than operating expenses. Our changes in operating assets and liabilities were impacted by a negative change in operating lease liabilities of $1.4 million due to the continued lease payments on our previous NYC headquarters, partially offset by a positive change in accounts payable and accrued expenses of $1.3 million due to the timing of invoices and payments.
Current wording
Net cash used in operating activities was $11.5 million for the nine months ended September 30, 2023, and was driven primarily by net revenue decreasing at a faster pace than operating expenses. Our changes in operating assets and liabilities were impacted by a negative change in operating lease liabilities of $2.1 million due to the continued lease payments on our NYC headquarters and a $1.2 million change in other assets, primarily related to the $1.1 million broker fee paid in connection with our subleasing of our NYC headquarters.
Previous wording
Net cash provided by investing activities was $15.3 million for the six months ended June 30, 2024, and was driven primarily by $67.8 million maturities and sales of short-term investments, partially offset by $51.5 million purchases of short-term investments.
Current wording
Net cash provided by investing activities was $15.3 million for the nine months ended September 30, 2024, and was driven primarily by $85.6 million maturities and sales of short-term investments, partially offset by $68.9 million purchases of short-term investments.
Previous wording
Net cash used in investing activities was $100.3 million for the six months ended June 30, 2023, and was driven primarily by $110.4 million purchases of short-term investments, partially offset by $11.0 million maturities of short-term investments.
Current wording
Net cash used in investing activities was $109.6 million for the nine months ended September 30, 2023, and was driven primarily by $166.5 million purchases of short-term investments, partially offset by $58.2 million maturities of short-term investments.
Previous wording
Net cash used in financing activities was $23.1 million for the six months ended June 30, 2024, and was driven primarily by $21.9 million in purchases of our common stock as part of our Stock Repurchase Program and $2.0 million of payments for taxes related to net share settlements of stock-based compensation awards, partially offset by $0.8 million in proceeds from the exercise of stock options.
Current wording
Net cash used in financing activities was $25.2 million for the nine months ended September 30, 2024, and was driven primarily by $22.8 million in purchases of our common stock as part of our 2023 and 2024 Stock Repurchase Programs and $3.2 million of payments for taxes related to net share settlements of stock-based compensation awards, partially offset by $0.8 million in proceeds from the exercise of stock options.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In August 2024, the Board of Directors authorized the 2024 Stock Repurchase Program to repurchase up to an aggregate of $10.0 million of our common stock.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Provision for transaction losses was $1.2 million for the six months ended June 30, 2024, as compared to $2.3 million for the six months ended June 30, 2023. The decrease of $1.0 million, or 45%, was primarily driven by a decrease in damage claims as a result of new policies implemented by us and in partnership with our carriers.