1stdibs.com, Inc.

1. Basis of Presentation and Summary of Significant Accounting Policies

Description of the Business

1stdibs.com, Inc. (“1stDibs” or the “Company”) is one of the world’s leading online marketplaces for connecting design lovers with many of the best sellers and makers of vintage & antique furniture, contemporary furniture, home décor, jewelry, watches, art, and fashion. The Company’s sellers, who undergo an evaluation by its in-house experts to vet the integrity of their listings, in-depth marketing content, and custom-built technology platform create trust in the Company’s brand and facilitate high-consideration purchases of luxury design items online. By disrupting the way these items are bought and sold, 1stDibs is both expanding access to, and growing the market for, luxury design items.

The Company was incorporated in the state of Delaware on March 10, 2000 and is headquartered in New York, NY.

Basis of Presentation

The accompanying condensed consolidated financial statements are prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K (the “Form 10-K”) for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 3, 2025.

The consolidated balance sheet as of December 31, 2024, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis.

In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods. The results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2025.

There have been no material changes to the Company's significant accounting policies as described in the Form 10-K.

Restructuring Charges

During the year ended December 31, 2024, the Company incurred $1.4 million of employee severance and benefits costs relating to a workforce reduction. The majority of the remaining $0.3 million of severance accrued as of June 30, 2025 is anticipated to be paid during the year ending December 31, 2025, while approximately $0.1 million is expected to be paid during the first quarter of 2026.

The following table displays a rollforward of the charges and payments to the accrued balance as of June 30, 2025:

There wasno expense recorded in the three and six months ended June 30, 2025 related to restructuring charges. During the three and six months ended June 30, 2024 there was $0.4 million of general and administrative expense relating to restructuring charges that we recorded in the condensed consolidated statements of operations.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, provision for transaction losses, allowance for doubtful accounts, impairment assessment of goodwill, the determination of useful lives, income taxes, and the valuation of leases. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from those estimates and such differences may be material to the condensed consolidated financial statements.

Segment Information

An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”). The Company operates and manages its business asone reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. The Company’s single reportable and operating segment containsone reporting unit, which consists of the Company’s online marketplace that enables commerce between sellers and buyers. The CODM regularly reviews the GAAP consolidated statement of operations from a significant expense perspective when evaluating financial performance and allocating resources. While the CODM also reviews other funnel metrics regularly (i.e. Gross Merchandise Value (“GMV”), Number of Orders, etc.), there are no additional significant segment expenses other than those disclosed in the condensed consolidated statements of operations.

Cash, Cash Equivalents, and Restricted Cash

The following represents the Company’s cash, cash equivalents, and restricted cash as of the periods presented:

The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Certain cash equivalents consist of investments in debt securities that are classified as available-for-sale. As of June 30, 2025, the Company’s restricted cash, current relates to a hold back of cash from a payment processor that was subsequently released and paid back to the Company in July 2025. As of June 30, 2025 and 2024, the Company’s restricted cash, non-current relates to $3.7 million and $3.6 million in Letters of Credit for its office leases, respectively. The carrying value of the restricted cash approximates fair value. During the three and six months ended June 30, 2025, the Company purchased $1.1 million and $12.4 million of available-for-sale securities classified as cash equivalents, respectively. During the three and six months ended June 30, 2024 the Company purchased $8.9 million and $25.6 million of available-for-sale securities classified as cash equivalents, respectively.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures. The standard will require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The new standard is effective for annual periods beginning after December 15, 2024. The Company adopted the standard during the year ended December 31, 2025. Adoption requires additional disclosures in the December 31, 2025 Form 10-K and will not have a financial impact on the Company’s consolidated balance sheets and statement of operations.

2. Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value require the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques.

Short-term investments and certain cash equivalents consist of investments in debt securities that are available-for-sale. The table below segregates all assets that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date:

There were no transfers between Level 1, Level 2, or Level 3 during the three and six months ended June 30, 2025 and 2024. The Company’s cash equivalents and short-term investments for the periods presented were valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs and were classified as Level 1 or Level 2, accordingly. As of June 30, 2025 and December 31, 2024, all other financial instruments not included in the table above were classified as Level 1.

3. Revenue Recognition

The following table summarizes the Company’s net revenue by type of service for the periods presented:

The Company generates net revenue from seller marketplace services and other services. Seller marketplace services primarily consist of marketplace transaction, subscription, and listing fees. Other services consist of other charges to the Company’s sellers including advertising revenues generated from displaying ads on the Company’s online marketplace. Net revenue by geographic region is determined based on the region the buyer is located in. For the three and six months ended June 30, 2025, approximately 82% of on-platform marketplace transaction net revenue was derived from the United States, and for the three and six months ended June 30, 2024 approximately 81% and 82% of on-platform marketplace transaction net revenue, respectively, was derived from the United States. No other individual country’s net revenue exceeded 10% of total net revenue.

4. Short-Term Investments

The following tables summarize the estimated value of the Company’s short-term investments as of June 30, 2025 and December 31, 2024:

There wereno realized gains or losses during the three and six months ended June 30, 2025. The Company recognized less than $0.1 million of realized losses related to sales of $18.7 million available-for-sale debt securities during the three and six months ended June 30, 2024. The Company evaluates securities for expected credit losses on a quarterly basis with consideration given to the financial condition and near-term prospects of the issuer, whether the Company intends to sell the securities, and whether it is more likely than not that the Company will be required to sell the securities before recovery of their amortized cost basis. The Company didnot recognize any credit losses related to available-for-sale debt securities during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, the Company does not intend to sell the investments and it is more likely than not that the Company will not be required to sell these before they mature. There wereno securities in a continuous unrealized loss position for 12 months or longer.

As of June 30, 2025, the fair value of short-term investments by remaining contractual maturity consisted of the following:

5. Property and Equipment, net

As of June 30, 2025 and December 31, 2024, property and equipment, net consisted of the following:

As of June 30, 2025 and December 31, 2024, the net book value of internal-use software was $1.9 million and $2.0 million, respectively. Depreciation and amortization expense related to the Company’s property and equipment totaled $0.4 million and $0.9 million for the three and six months ended June 30, 2025, respectively, which included amortization expense for internal-use software of $0.4 million and $0.7 million, respectively. Depreciation and amortization expense related to the Company’s property and equipment totaled $0.5 million and $0.9 million for the three and six months ended June 30, 2024, respectively, which included amortization expense for internal-use software of $0.4 million and $0.8 million, respectively.

6. Accrued Expenses

As of June 30, 2025 and December 31, 2024, accrued expenses consisted of the following:

7. Leases

The Company’s operating lease arrangements are principally for office spaces in New York City. In August 2023, the Company entered into a sublease agreement as the sublessor for its office space in its former New York City headquarters (the “Sublease”). Sublease income is recognized as an offset to lease expense on a straight-line basis over the lease term and is included in general and administrative expenses on the Company’s condensed consolidated statement of operations. The sublease ends on December 31, 2029, the expiration date of the Company’s former New York City headquarter’s lease. In November 2023, the Company entered into a lease agreement, as the lessee, for the Company’s new corporate headquarters in New York City (the “Lease Agreement”) which commenced in January 2024 with afive year term and an option to extend the lease for an additional five years.

As of June 30, 2025, the Company had $18.6 million of operating lease right-of-use assets, $4.4 million and $16.4 million of current and non-current operating lease liabilities, respectively, and no finance leases on its condensed consolidated balance sheet. These operating lease arrangements, included in the measurement of lease liabilities, had a weighted-average remaining lease term of 4.4 years, a weighted-average discount rate of 6.2%, and do not reflect options to extend or terminate its leases, as management does not consider the exercise of these options to be reasonably certain. As of December 31, 2024, the Company had $19.7 million of operating lease right-of-use assets, $4.2 million and $18.0 million of current and non-current operating lease liabilities, respectively, and no finance leases on its consolidated balance sheet.

During the three and six months ended June 30, 2025, the Company paid $1.4 million and $2.7 million for amounts included in the measurement of lease liabilities, respectively, and $1.1 million and $2.1 million during the three and six months ended June 30, 2024, respectively. In April 2025, the Company entered into a new lease agreement for office space in Lithuania with afive year term that resulted in a right-of-use asset and lease liabilities of $0.7 million. The Company did not enter into any new lease arrangements during the three and six months ended June 30, 2024.

The following table summarizes total lease expense, net for the periods presented:

Operating lease expense is recognized on a straight-line basis over the term of the arrangement beginning on the lease commencement date for lease arrangements that have an initial term greater than 12 months and therefore are recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term for lease arrangements that have an initial term of 12 months or less and therefore are not recorded on the balance sheet. Variable lease expense is recognized as incurred and consists primarily of real estate taxes, utilities, and other office space related expenses. As of June 30, 2025, the total remaining operating lease payments included in the measurement of lease liabilities, and undiscounted remaining cash receipts from the Company’s Sublease was as follows (in thousands):

8. Other Current Liabilities

As of June 30, 2025 and December 31, 2024, other current liabilities consisted of the following:

9. Equity

Preferred Stock

Effective June 14, 2021, in connection with the closing of the Company’s Initial Public Offering (“IPO”), the Company’s board of directors (“Board”) is authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value per share, in one or more series. The Company's Board has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. As of June 30, 2025 and December 31, 2024, no shares of preferred stock were issued or outstanding.

Common Stock

As of June 30, 2025 and December 31, 2024, the Company had authorized 400,000,000 shares of voting common stock, $0.01 par value per share. Each holder of the Company's common stock is entitled toone vote for each share on all matters to be voted upon by the stockholders and there are no cumulative rights. Subject to any preferential rights of any outstanding preferred stockholders, the Company's common stock are entitled to receive ratably the dividends, if any, as may be declared from time to time by the Board out of legally available funds. If there is a liquidation, dissolution, or winding up of the Company, holders of the Company's common stock would be entitled to share in the Company's assets remaining after the payment of liabilities and any preferential rights of any outstanding preferred stock. The rights, preferences, and privileges of the holders of the Company's common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which the Company may designate and issue in the future.

As of June 30, 2025 and December 31, 2024, the Company had reserved shares of common stock for issuance in connection with the following:

Treasury Stock

In August 2023, the Board authorized the Company to repurchase up to an aggregate of $20.0 million of its common stock (“2023 Stock Repurchase Program”). In June 2024, the Board authorized an increase to the Company’s 2023 Stock Repurchase Program to an aggregate repurchase amount of $25.5 million, and subsequently announced the completion of its 2023 Stock Repurchase Program. In August 2024, the Board authorized the Company to repurchase up to an aggregate of $10.0 million of its common stock (“2024 Stock Repurchase Program”).

As of June 30, 2025, the Company had 6,921,514 shares of treasury stock carried at its cost basis of $33.4 million, and approximately $2.0 million remains available for future purchases.

The following table summarizes total treasury stock purchased under each of the Company's programs as of the periods presented:

10. Stock-based compensation

2011 Option Plan

The Company adopted the 2011 Stock Option and Grant Plan (the “2011 Plan”) on September 2, 2011 and amended and restated the plan on December 14, 2011. The 2011 Plan provided for the Company to grant incentive stock options (“ISOs”) or non-qualified stock options, restricted stock awards, and other stock-based awards to its employees, directors, officers, outside advisors, and non-employee consultants. At the time of grant, the options issued to new employees pursuant to the 2011 Plan expireten years from the date of grant and generally vest over four years, with 25% vesting on the first anniversary and the balance vesting ratably over the remaining 36 months. Generally, all additional options issued pursuant to the 2011 Plan expireten years from the date of grant and generally vest ratably over 48 months.

The 2011 Plan was administered by the Compensation Committee of the Board. The exercise prices, vesting, and other restrictions were determined at the discretion of Compensation Committee of the Board.

Following the completion of the Company’s IPO in June 2021, no additional awards and no shares of the Company’s common stock remain available for future issuance under the 2011 Plan. However, the 2011 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

2021 Stock Incentive Plan

In May 2021, the Company's Board adopted, and its stockholders approved, the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective upon the SEC declaring the Company’s IPO registration statement effective. The 2021 Plan provides for the grant of ISOs, non-statutory stock options, restricted share awards, restricted stock unit awards (“RSUs”), stock appreciation rights, cash-based awards, and performance-based stock awards, or collectively, stock awards. ISOs may be granted only to the Company’s employees, including officers, and the employees of its parent or subsidiaries. All other stock awards may be granted to the Company’s employees, officers, non-employee directors, consultants, and the employees and consultants of its parent, subsidiaries, and affiliates. Depending on the nature of the award granted, the vesting terms may differ. Generally for new hire awards, the requisite service period for RSUs to vest is over four years from the grant date, with 25% vesting on the first anniversary and the balance vesting ratably on a quarterly basis over the remaining vesting period. Generally, all additional RSUs vest ratably on a quarterly basis over three orfour years beginning on the three month anniversary from the grant date. For RSU grants to members of our Board, initial awards vest ratably on an annual basis over three years, and annual refresh awards vest overone year.

The aggregate number of shares of the Company’s common stock that may be issued pursuant to stock awards under the 2021 Plan will not exceed the sum of (x)4,333,333 shares (as adjusted for stock splits, stock dividends, combinations, and the like), plus (y) the sum of (1) the number of reserved shares not issued or subject to outstanding awards under the 2011 Plan on the effective date of the 2021 Plan and (2) the number of shares subject to outstanding stock awards granted under the 2011 Plan and that, following the effective date of the 2021 Plan, (A) are subsequently forfeited or terminated for any reason before being exercised or settled, (B) are not issued because such stock award is settled in cash, (C) are subject to vesting restrictions and are subsequently forfeited, (D) are withheld or reacquired to satisfy the applicable exercise, strike, or purchase price, or (E) are withheld or reacquired to satisfy a tax withholding obligation, plus (z) an annual increase on the first day of each fiscal year, for a period of not more than 10 years, beginning on January 1, 2022 and ending on, and including, January 1, 2031, in an amount equal to the lesser of (i)5% of the outstanding shares on the last day of the immediately preceding fiscal year or (ii) such lesser amount that the Compensation Committee of the Board determines for purposes of the annual increase for that fiscal year. On January 1, 2025, the number of shares of common stock available for issuance under the 2021 Plan was automatically increased according to its terms by 1,791,393 shares.

As of June 30, 2025,2,224,900 shares were available for future grants of the Company’s common stock.

Stock Options

The following table summarizes the activity related to the Company’s stock options:

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for all stock options that had exercise prices lower than the fair value of the Company’s common stock.

There wereno stock options granted during the three and six months ended June 30, 2025 and 2024. There wereno options exercised during the three and six months ended June 30, 2025. The aggregate intrinsic value of stock options exercised during the three and six months ended June 30, 2024 was less than $0.1 million and $0.3 million, respectively. The total fair value of stock options vested was $0.3 million and $1.0 million during the three and six months ended June 30, 2025, and $1.0 million and $1.7 million during the three and six months ended June 30, 2024, respectively. The Company recognized stock-based compensation expense for options having a performance condition ofzero and $0.1 million during the three and six months ended June 30, 2025, respectively, and $0.2 million and $0.3 million during the three and six months ended June 30, 2024, respectively. As of June 30, 2025, there were no remaining unvested options with a performance condition.

Restricted Stock Units

The following table summarizes the activity related to the Company's restricted stock units:

The estimated weighted-average grant date fair value of restricted stock units granted was $2.66 and $2.96 per share for the three and six months ended June 30, 2025, respectively, and $5.55 and $5.86 per share for the three and six months ended June 30, 2024, respectively. The total grant date fair value of restricted stock units vested was $4.2 million and $7.1 million for the three and six months ended June 30, 2025, respectively, and $3.9 million and $5.8 million for the three and six months ended June 30, 2024, respectively.

Employee Stock Purchase Plan

In May 2021, the Company's Board adopted, and its stockholders approved, the Company's 2021 Employee Stock Purchase Plan (the "ESPP"). A total of 2,329,934 shares of the Company's authorized but unissued or reacquired shares of its common stock (as adjusted for stock splits, stock dividends, combinations, and the like) are available for issuance under the ESPP. The number of shares of the Company's common stock that will be available for issuance under the ESPP also includes an annual increase on the first day of each fiscal year, for a period of not more than 10 years, beginning on January 1, 2022 and ending on, and including, January 1, 2031, equal to the least of: (i)1% of the outstanding shares of the Company’s common stock on such date, (ii)400,000 shares (as adjusted for stock splits, stock dividends, combinations, and the like) or (iii) a lesser amount determined by the Compensation Committee or the Company’s Board. On January 1, 2025, the number of shares of common stock available for issuance under the ESPP was automatically increased according to its terms by 358,279 shares.

During regularly scheduled “offerings” under the ESPP, participants may purchase the Company’s common stock through payroll deductions, up to a maximum of 15% of their eligible compensation, or such lower limit as may be determined by the Compensation Committee from time to time. Participants will be able to withdraw their accumulated payroll deductions prior to the end of the offering period in accordance with the terms of the offering. Participation in the ESPP will end automatically on termination of employment. The purchase price will be specified pursuant to the offering, but cannot, under the terms of the ESPP, be less than 85% of the fair market value per share of the Company’s common stock on either the offering date or on the purchase date, whichever is less. The fair market value of the Company’s common stock for this purpose will generally be the closing price on the Nasdaq Global Market (or such other exchange as the Company’s common stock may be traded at the relevant time) for the date in question, or if such date is not a trading day, for the last trading day before the date in question. As of June 30, 2025, an initial offering period has not commenced, and for the three and six months ended June 30, 2025 and 2024, no shares of common stock were purchased under the ESPP.

Stock-Based Compensation Expense

The following table summarizes the classification of the Company’s stock-based compensation expense in the condensed consolidated statements of operations:

Stock-based compensation capitalized in connection with the Company’s internal-use software was less than $0.1 million for each of the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, total unrecognized compensation expense related to unvested stock-based awards was $20.6 million, which is expected to be recognized over a weighted-average period of 2.2 years.

11. Income Taxes

The Company’s income tax provision was immaterial for the three and six months ended June 30, 2025 and 2024 due to the net loss before income taxes expected to be incurred for the year ending December 31, 2025 and incurred for the year ended December 31, 2024, as well as the Company’s continued maintenance of a full valuation allowance against its net deferred tax assets. The Company’s history of pre-tax losses represents sufficient evidence to determine the establishment of a full valuation allowance is appropriate. As of June 30, 2025, the Company had no material liabilities for interest and penalties accrued.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses. The Company is in the process of evaluating the impact of OBBBA to its financial statements. However, it is currently not expected to have a material impact.

12. Net Loss Per Share

The following table summarizes the computation of basic and diluted net loss per share for the three and six months ended June 30, 2025 and 2024:

The Company’s potentially dilutive securities, which include outstanding stock options and restricted stock units have been excluded from the computation of diluted net loss per share from each period as including them would have had an anti-dilutive effect. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potentially dilutive securities for each period presented:

13. Commitments and Contingencies

Contractual Obligations

The Company has $25.6 million of non-cancelable contractual commitments as of June 30, 2025, primarily related to its operating lease agreements for both its current and former corporate headquarters in New York, NY, not including any offset for sublease income, as well as other software and support services. For those agreements with variable terms, the Company does not estimate what the total obligation may be beyond any minimum obligations. The following table represents the Company’s commitments under its purchase obligations as of June 30, 2025 (in thousands):

Legal Proceedings

The Company is subject to various claims and contingencies, which are in the scope of ordinary and routine litigation incidental to its business, including those related to regulation, litigation, business transactions, employee-related matters, and taxes, among others. When the Company becomes aware of a claim or potential claim, the likelihood of any loss or exposure is assessed. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company records a liability for the loss. The liability recorded includes probable and estimable legal costs incurred to date and future legal costs to the point in the legal matter where the Company believes a conclusion to the matter will be reached. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible. The Company does not believe that it is party to any pending legal proceedings that are likely to have a material effect on its business, financial condition, or results of operations for the three and six months ended June 30, 2025.

Indemnification

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board and officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications.

Sales and other indirect tax contingencies

The Company conducts operations in many tax jurisdictions for which indirect taxes, such as sales, use and other indirect taxes, are assessed on its operations. Although the Company is diligent in collecting and remitting such taxes, there is uncertainty as to what constitutes sufficient presence or responsibility for a jurisdiction to levy taxes, fees, and surcharges for sales made on an e-commerce platform. The Company recognized liabilities for contingencies related to sales and indirect taxes deemed probable and estimable totaling $1.1 million as of both June 30, 2025 and December 31, 2024, respectively, which are included in other current liabilities in the Company’s condensed consolidated balance sheets.