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thredUP Announces Second Quarter 2022 Results

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ThredUp Inc. (Nasdaq: TDUP) reported Q2 2022 revenue of $76.4 million, a 27% increase year-over-year, with a gross margin of 68.9%. Active buyers reached 1.7 million, reflecting 29% growth year-over-year, and total orders also grew by 40%. However, the company posted a GAAP net loss of $28.4 million, or 37.2% of revenue, compared to a 14.4 million loss last year. Looking ahead, ThredUp forecasts Q3 2022 revenue between $64 million and $66 million.

Positive
  • Quarterly revenue increased 27% year-over-year to $76.4 million.
  • Gross profit rose 19% year-over-year to $52.6 million.
  • Gross margin at record high of 74.2% in the US business.
  • Active buyers and orders both grew significantly, by 29% and 40%, respectively.
Negative
  • GAAP net loss of $28.4 million, worsening from a $14.4 million loss a year ago.
  • Adjusted EBITDA loss increased to $13.5 million from $9.0 million year-over-year.
  • Quarterly revenue of $76.4 million, representing 27% growth year-over-year.
  • Second quarter gross margin of 68.9% and gross profit growth of 19% year-over-year. Record gross margins in our US business of 74.2%.
  • Active Buyers of 1.7 million and Orders of 1.7 million in Q2 2022, representing growth of 29% and 40% year-over-year, respectively.
  • Published the 10th Annual Resale Report in May, revealing that the U.S. secondhand market is projected to more than double by 2026, reaching $82 billion.

OAKLAND, Calif., Aug. 15, 2022 (GLOBE NEWSWIRE) -- ThredUp Inc. (Nasdaq: TDUP), one of the largest online resale platforms for women’s and kids’ apparel, shoes, and accessories, announced today its financial results for the second quarter ended June 30, 2022.

"Demonstrating the flexibility of our model to navigate a highly dynamic environment, we are extremely proud of our Q2 results" said thredUP CEO and co-founder James Reinhart. "As our consumer is faced with an uncertain economic environment and rising costs, we are focused on the variables within our control. We believe our model is uniquely positioned to weather macroeconomic volatility, and are confident that as we re-evaluate our cost base, we can make progress towards profitability and continue to strengthen our position in the growing resale market."

Second Quarter 2022 Financial Highlights

  • Revenue: Total revenue of $76.4 million, an increase of 27% year-over-year.
  • Gross Profit and Gross Margin: Gross profit totaled $52.6 million, representing growth of 19% year-over-year. Gross margin was 68.9% as compared to 73.6% in the second quarter last year.
  • Net Loss: GAAP net loss was $28.4 million, or 37.2% of revenue, for the second quarter 2022, compared to a GAAP net loss of $14.4 million, or 24.0% of revenue, for the second quarter 2021.
  • Adjusted EBITDA and EBITDA Margin: Adjusted EBITDA loss was $13.5 million, or 17.7% of revenue, for the second quarter 2022, compared to the Adjusted EBITDA loss of $9.0 million, or 15.1% of revenue, for the second quarter 2021.
  • Active Buyers and Orders: Active Buyers of 1.7 million and Orders of 1.7 million growing 29% and 40%, respectively, over the comparable quarter last year.

Recent Business Highlights

  • Resale-as-a-Service® (RaaS®): thredUP continues to expand its RaaS program with new clients, including Tommy Hilfiger, PacSun, Bernardo, Ozma, and Oak + Fort.
  • Published 10th Annual Resale Report: thredUP released the results of the 2022 Resale Report, showing that the U.S. secondhand market is projected to more than double by 2026, reaching $82 billion. The 10th annual study also includes global market sizing for the first time, a one-time section exploring inflation’s impact on the consumer, and a 10-year anniversary lookback on the last decade in resale.
  • Bolstered executive leadership: Noelle Sadler joined as Chief Marketing Officer, bringing extensive ecommerce marketing and merchandising experience to thredUP.
  • Founding member of American Circular Textiles (“ACT”) policy group: In partnership with 10 other members of the circular fashion industry, thredUP is a founding member of the ACT policy group, an organization intent on bringing together fashion’s circular community to develop policy around textile recovery and reuse.

Financial Outlook

For the third quarter 2022, thredUP expects:

  • Revenue in the range of $64 million to $66 million
  • Gross margin in the range of 65% to 67%
  • Adjusted EBITDA margin loss in the range of 18% to 16%

For the fourth quarter 2022, thredUP expects:

  • Revenue in the range of $70 million to $72 million
  • Gross margin in the range of 64% to 66%
  • Adjusted EBITDA margin loss in the range of 10% to 8%

For the full fiscal year 2022, thredUP expects:

  • Revenue in the range of $283 million to $287 million
  • Gross margin in the range of 67% to 69%
  • Adjusted EBITDA margin loss in the range of 16% to 15%

Conference Call and Webcast Information

  • Conference Call: The live call is accessible in the U.S. and Canada at +1 888-394-8218 (code 5070223) and outside of the U.S. and Canada at +1 646-828-8193 (code 5070223).
  • Webcast: The live and archived webcast and related earnings materials will be available at thredUP’s investor relations website: ir.thredup.com.

ThredUp Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

    
 June 30, 2022 December 31, 2021
    
Assets   
Current assets:   
Cash and cash equivalents$52,197  $84,550 
Marketable securities 96,326   121,277 
Accounts receivable, net 3,368   4,136 
Inventory, net 13,941   9,825 
Other current assets 11,862   8,625 
Total current assets 177,694   228,413 
Operating lease right-of-use assets 49,420   39,340 
Property and equipment, net 84,045   55,466 
Goodwill 11,312   12,238 
Intangible assets 11,522   13,854 
Other assets 11,905   11,515 
Total assets$345,898  $360,826 
Liabilities and Stockholders’ Equity
Current liabilities:   
Accounts payable$16,183  $13,336 
Accrued and other current liabilities 48,590   45,253 
Seller payable 22,564   19,125 
Operating lease liabilities, current 5,014   3,931 
Current portion of long-term debt 7,791   7,768 
Total current liabilities 100,142   89,413 
Operating lease liabilities, non-current 51,497   36,997 
Long-term debt, net of current portion 23,705   27,559 
Other non-current liabilities 2,625   1,123 
Total liabilities 177,969   155,092 
    
Stockholders’ equity:   
Common stock 10   10 
Additional paid-in capital 537,760   522,161 
Accumulated other comprehensive loss (5,391)  (1,094)
Accumulated deficit (364,450)  (315,343)
Total stockholders’ equity 167,929   205,734 
Total liabilities and stockholders’ equity$345,898  $360,826 
    

  

ThredUp Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Revenue:       
Consignment$48,536  $48,597  $95,971  $93,285 
Product 27,885   11,362   53,145   22,354 
Total revenue 76,421   59,959   149,116   115,639 
Cost of revenue:       
Consignment 10,218   10,687   20,267   21,519 
Product 13,555   5,140   25,973   10,270 
Total cost of revenue 23,773   15,827   46,240   31,789 
Gross profit 52,648   44,132   102,876   83,850 
Operating expenses:       
Operations, product and technology 43,961   31,062   83,122   59,374 
Marketing 19,640   15,957   36,618   31,403 
Sales, general and administrative 17,380   10,999   32,044   21,637 
Total operating expenses 80,981   58,018   151,784   112,414 
Operating loss (28,333)  (13,886)  (48,908)  (28,564)
Interest expense (238)  (573)  (661)  (1,132)
Other income (expense), net 181   93   484   (814)
Loss before provision for income taxes (28,390)  (14,366)  (49,085)  (30,510)
Provision for income taxes 9   13   22   40 
Net loss$(28,399) $(14,379) $(49,107) $(30,550)
Net loss per share, basic and diluted$(0.29) $(0.15) $(0.50) $(0.54)
Weighted-average shares used in computing net loss per share, basic and diluted 99,331   94,435   98,979   56,777 


ThredUp Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Net Loss$(28,399) $(14,379) $(49,107) $(30,550)
Other comprehensive loss, net of tax:       
Foreign currency translation adjustments (2,333)     (3,041)   
Unrealized loss on available-for-sale debt securities (254)  (36)  (1,256)  (36)
Total comprehensive loss$(30,986) $(14,415) $(53,404) $(30,586)


ThredUp Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 Six Months Ended June 30,
  2022   2021 
Cash flows from operating activities   
Net loss$(49,107) $(30,550)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:   
Depreciation and amortization 6,678   3,899 
Stock-based compensation expense 13,581   6,394 
Reduction in the carrying amount of right-of-use assets 2,905   2,384 
Changes in fair value of convertible preferred stock warrants and others 1,138   1,179 
Changes in operating assets and liabilities:   
Accounts receivable, net 682   278 
Inventory, net (4,703)  (843)
Other current and non-current assets (4,799)  (3,364)
Accounts payable 1,954   2,716 
Accrued and other current liabilities 749   8,171 
Seller payable 3,465   2,985 
Operating lease liabilities 2,602   (2,343)
Other non-current liabilities 20   4 
Net cash used in operating activities (24,835)  (9,090)
Cash flows from investing activities   
Purchase of marketable securities (3,475)  (57,418)
Maturities of marketable securities 26,294    
Purchase of property and equipment (27,583)  (8,999)
Net cash used in investing activities (4,764)  (66,417)
Cash flows from financing activities   
Proceeds from debt issuance    4,625 
Repayment of debt (4,000)   
Proceeds from issuance of Class A common stock, net of underwriting discounts and commissions    180,284 
Proceeds from stock issued under incentive and purchase plans, net of forfeitures 1,668   2,805 
Payment of costs for the initial public offering    (3,633)
Net cash provided by (used in) financing activities (2,332)  184,081 
Effect of exchange rate changes on cash and cash equivalents (521)   
Net (decrease) increase  in cash, cash equivalents and restricted cash (32,452)  108,574 
Cash, cash equivalents and restricted cash   
Beginning of period 91,840   67,539 
End of period$59,388  $176,113 
    


ThredUp Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except percentages)
(unaudited)

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Adjusted EBITDA Reconciliation:       
GAAP Net loss$(28,399) $(14,379) $(49,107) $(30,550)
Depreciation and amortization 3,407   1,861   6,678   3,899 
Stock-based compensation expense 10,058   2,896   13,581   6,394 
Interest expense 238   573   661   1,132 
Acquisition-related expenses 70      274    
Restructuring charges 1,076      1,387    
Change in fair value of convertible preferred stock warrant liability          930 
Provision for income taxes 9   13   22   40 
Non-GAAP Adjusted EBITDA$(13,541) $(9,036) $(26,504) $(18,155)
Adjusted EBITDA margin %(17.7)% (15.1)% (17.8)% (15.7)%

Investors
ir@thredup.com

Media
media@thredup.com

About thredUP

thredUP is transforming resale with technology and a mission to inspire a new generation of consumers to think secondhand first. By making it easy to buy and sell secondhand, thredUP has become one of the world's largest online resale platforms for women's and kids' apparel, shoes and accessories. Sellers love thredUP because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. Our proprietary operating platform is the foundation for our managed marketplace and consists of distributed processing infrastructure, proprietary software and systems and data science expertise. With thredUP’s Resale-as-a-Service (“RaaS”), some of the world's leading brands and retailers are leveraging our platform to deliver customizable, scalable resale experiences to their customers. thredUP has processed over 125 million unique secondhand items from 35,000 brands across 100 categories. By extending the life cycle of clothing, thredUP is changing the way consumers shop and ushering in a more sustainable future for the fashion industry.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this release include, but are not limited to, guidance on financial results for the third quarter and full year of 2022; statements about future operating results and our long term growth; the momentum of our business; the growth rates in the markets in which we compete; the impact of the COVID-19 pandemic and inflation on consumer behavior and our business; our investments in technology and infrastructure; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions, investments or restructuring activities; the success of our RaaS model and the timing and plans for future RaaS clients; and our ability to attract new Active Buyers.

The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2021 and in our Quarterly Report on Form 10-Q that will be filed following this earnings release. The forward-looking statements in this release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing thredUP’s views as of any date subsequent to the date of this press release.

Additional information regarding these and other factors that could affect thredUP's results is included in thredUP’s SEC filings, which may be obtained by visiting our Investor Relations website at ir.thredup.com or the SEC's website at www.sec.gov.

Operating Metrics

An Active Buyer is a thredUP buyer who has made at least one purchase in the last twelve months. A thredUP buyer is a customer who has created an account in our marketplace. A thredUP buyer is identified by a unique email address and a single person could have multiple thredUP accounts and count as multiple Active Buyers.

Orders are defined as the total number of orders placed by buyers across our marketplace, including through our RaaS partners, in a given period, net of cancellations.

Non-GAAP Financial Measures

This press release and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA margin.  In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe that Adjusted EBITDA and Adjusted EBITDA margin, when taken collectively with our GAAP results, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Adjusted EBITDA and Adjusted EBITDA margin is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP and may be different from a similarly-titled non-GAAP measure used by other companies.

A reconciliation is provided above for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. We calculate Adjusted EBITDA as net loss adjusted to exclude, where applicable in a given period, depreciation and amortization, stock-based compensation expense, interest expense, acquisition related expenses, restructuring charges, change in fair value of convertible preferred stock warrant liability and provision for income taxes.

Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA to net loss. thredUP is not providing a quantitative reconciliation of forward-looking guidance of Adjusted EBITDA to net loss because certain items are out of thredUP’s control or cannot be reasonably predicted. Historically, these items have included, but are not limited to, depreciation and amortization, stock-based compensation expense, change in fair value of convertible preferred stock warrant liability and provision for income taxes. Accordingly, a reconciliation for Adjusted EBITDA in order to calculate forward-looking Adjusted EBITDA margin is not available without unreasonable effort. However, for the third quarter of 2022 and full year 2022, depreciation and amortization is expected to be $3.9 million and $14.9 million, respectively. In addition, for the third quarter of 2022 and full year 2022, stock-based compensation expense is expected to be $7.7 million and $28.9 million, respectively. These items are uncertain, depend on various factors, and could result in projected net loss being materially less than is indicated by the currently estimated Adjusted EBITDA margin.


FAQ

What were ThredUp's revenue and growth rate in Q2 2022?

ThredUp reported Q2 2022 revenue of $76.4 million, marking a 27% growth year-over-year.

What is the forecast for ThredUp's Q3 2022 revenue?

ThredUp expects Q3 2022 revenue to be between $64 million and $66 million.

How much was ThredUp's net loss in Q2 2022?

ThredUp reported a GAAP net loss of $28.4 million in Q2 2022, compared to a loss of $14.4 million in Q2 2021.

What was the active buyer growth for ThredUp in Q2 2022?

ThredUp had 1.7 million active buyers in Q2 2022, reflecting a 29% growth year-over-year.

What is ThredUp's projected growth for the secondhand market?

ThredUp's 10th Annual Resale Report projects the U.S. secondhand market to exceed $82 billion by 2026.

ThredUp Inc.

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