ThredUp Inc. (Nasdaq: TDUP, LTSE: TDUP), one of the largest online
resale platforms for apparel, shoes, and accessories, today
announced its financial results for the fourth quarter and full
year ended December 31, 2023.
“We closed out 2023 with another quarter of
strong financial performance, demonstrating healthy top-line growth
and bottom-line leverage,” said ThredUp CEO and co-founder James
Reinhart. “Looking ahead, we are confident that by focusing on
strategic growth drivers in the U.S. and applying our proven resale
playbook in Europe, we can deliver adjusted EBITDA breakeven on an
annual basis in 2024.”
Fourth Quarter
2023 Financial Highlights
-
Revenue: Total revenue of $81.4 million, an
increase of 14% year-over-year.
- Gross
Profit and Gross Margin: Gross profit totaled
$50.4 million, representing an increase of 12% year-over-year.
Gross margin was 61.9% as compared to 63.1% in the fourth quarter
last year. Gross profit included a $1.9 million inventory write-off
in Europe, an impact of 230 basis points to gross margin.
- Net
Loss: Net loss was $14.6 million, or a negative 18.0%
of revenue, for the fourth quarter 2023, compared to a net loss of
$19.5 million, or a negative 27.3% of revenue, for the fourth
quarter 2022.
- Adjusted
EBITDA Loss and Adjusted EBITDA Loss
Margin1: Adjusted EBITDA
loss was $2.1 million, or a negative 2.6% of revenue, for the
fourth quarter 2023. This is compared to an Adjusted EBITDA loss of
$5.8 million, or a negative 8.2% of revenue, for the fourth
quarter 2022.
- Active
Buyers and Orders: Active Buyers of 1.797 million and
Orders of 1.807 million, representing increases of 9% and 17%,
respectively, over the fourth quarter 2022.
Full Year 2023
Financial Highlights
-
Revenue: Total revenue of $322.0 million, an
increase of 12% year-over-year.
- Gross
Profit and Gross Margin: Gross profit totaled
$213.8 million, representing an increase of 11%
year-over-year. Gross margin was 66.4% compared to 66.7% last
year.
- Net
Loss: Net loss was $71.2 million, or a negative 22.1%
of revenue, for the full year 2023, compared to a net loss of
$92.3 million, or a negative 32.0% of revenue, for the full
year 2022.
- Adjusted
EBITDA Loss and Adjusted EBITDA Loss
Margin1: Adjusted EBITDA
loss was $17.4 million, or a negative 5.4% of revenue, for the
full year 2023, compared to the Adjusted EBITDA loss of
$43.4 million, or a negative 15.0% of revenue, for the full
year 2022.
-
Orders: Record orders of 6.9 million for the
full year 2023, growing 6% over 6.5 million for the full year
2022.
____________1 Adjusted EBITDA loss and Adjusted EBITDA loss
margin are non-GAAP measures. See “Reconciliation of GAAP to
Non-GAAP Financial Measures” for a detailed reconciliation of
Adjusted EBITDA loss to the most directly comparable GAAP measure
and “Non-GAAP Financial Measures” for a discussion of why we
believe these non-GAAP measures are useful.
Recent Business Highlights
- AI
Innovation: ThredUp recently debuted an AI-powered search
experience that makes it easy and intuitive to find secondhand
items in its marketplace. They’ve also begun to leverage generative
AI that will soon give customers the ability to create outfits they
love and are strategically implementing AI across operations in its
distribution center network to enhance inventory management and
processing.
- Customer
Experience Improvements: After implementing Delivery
Promise and Thrift Promise, which aim to deliver
purchase-to-doorstep shipping in three days or less and ensure the
highest levels of customer satisfaction with every order, ThredUp’s
Q4 return rate decreased by 700 basis points compared to the same
quarter of 2022.
- Industry
recognition: ThredUp's Resale-as-a-Service (RaaS) was
named a winner in Good Housekeeping’s 2024 Sustainable Innovation
Awards, which recognizes products and services that have embraced a
“people, purpose, and planet” approach to sustainability.
Financial Outlook
For the first quarter 2024, ThredUp expects:
- Revenue in the
range of $79.0 million to $81.0 million
- Gross margin in the
range of 68.5% to 70.5%, representing gross profit dollar growth of
9% year over year at the midpoint of revenue and gross margin
guidance.
- Adjusted EBITDA
loss margin in the range of 3.0% to 1.0%
For the full fiscal year 2024, ThredUp
expects:
- Revenue in the
range of $340.0 million to $350.0 million
- Gross margin in the
range of 69.5% to 71.5%, representing gross profit dollar growth of
14% year over year at the midpoint of revenue and gross margin
guidance.
- Adjusted EBITDA
margin in the range of 0.5% to 1.5%
ThredUp is not providing a quantitative
reconciliation of forward-looking guidance of the non-GAAP measure
Adjusted EBITDA loss 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 and provision for
income taxes. Accordingly, a reconciliation for Adjusted EBITDA
loss in order to calculate forward-looking Adjusted EBITDA loss
margin is not available without unreasonable effort. However, for
the first quarter of 2024 and full year 2024, depreciation and
amortization is expected to be $5.0 million and $19.8 million,
respectively. In addition, for the first quarter of 2024 and full
year 2024, stock-based compensation expense is expected to be $7.5
million and $33.0 million, respectively. These items are uncertain,
depend on various factors, and could result in the projected net
loss being materially less than indicated by the currently
estimated Adjusted EBITDA loss margin.
Conference Call and Webcast
Information
- The live and
archived webcast and all related earnings materials will be
available at ThredUp’s investor relations website:
ir.thredup.com/news-events/events-and-presentations.
ThredUp Inc.Consolidated Balance
Sheets(unaudited) |
|
|
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(in
thousands) |
ASSETS |
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
56,084 |
|
|
$ |
38,029 |
|
Marketable securities |
|
|
8,100 |
|
|
|
66,902 |
|
Accounts receivable, net |
|
|
7,813 |
|
|
|
4,669 |
|
Inventory |
|
|
15,687 |
|
|
|
17,519 |
|
Other current assets |
|
|
6,204 |
|
|
|
7,076 |
|
Total current assets |
|
|
93,888 |
|
|
|
134,195 |
|
Operating lease right-of-use
assets |
|
|
42,118 |
|
|
|
46,153 |
|
Property and equipment,
net |
|
|
87,672 |
|
|
|
92,482 |
|
Goodwill |
|
|
11,957 |
|
|
|
11,592 |
|
Intangible assets |
|
|
8,156 |
|
|
|
10,499 |
|
Other assets |
|
|
6,176 |
|
|
|
7,027 |
|
Total assets |
|
$ |
249,967 |
|
|
$ |
301,948 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
9,457 |
|
|
$ |
7,800 |
|
Accrued and other current liabilities |
|
|
35,934 |
|
|
|
50,155 |
|
Seller payable |
|
|
21,495 |
|
|
|
16,166 |
|
Operating lease liabilities, current |
|
|
5,949 |
|
|
|
6,413 |
|
Current portion of long-term debt |
|
|
3,838 |
|
|
|
3,879 |
|
Total current liabilities |
|
|
76,673 |
|
|
|
84,413 |
|
Operating lease liabilities,
non-current |
|
|
44,621 |
|
|
|
48,727 |
|
Long-term debt, net of current
portion |
|
|
22,006 |
|
|
|
25,788 |
|
Other non-current
liabilities |
|
|
2,750 |
|
|
|
3,019 |
|
Total liabilities |
|
|
146,050 |
|
|
|
161,947 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Class A and B common stock, $0.0001 par value;
1,120,000 shares authorized as of December 31, 2023 and
2022; 108,784 and 101,532 shares issued and outstanding as of
December 31, 2023 and 2022, respectively |
|
|
11 |
|
|
|
10 |
|
Additional paid-in capital |
|
|
585,156 |
|
|
|
551,852 |
|
Accumulated other comprehensive loss |
|
|
(2,375 |
) |
|
|
(4,234 |
) |
Accumulated deficit |
|
|
(478,875 |
) |
|
|
(407,627 |
) |
Total stockholders’
equity |
|
|
103,917 |
|
|
|
140,001 |
|
Total liabilities and
stockholders’ equity |
|
$ |
249,967 |
|
|
$ |
301,948 |
|
|
ThredUp Inc.Consolidated Statements of
Operations(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31,2023 |
|
December 31,2022 |
|
December 31,2023 |
|
December 31,2022 |
|
|
(in thousands, except per share amounts) |
Revenue: |
|
|
|
|
|
|
|
|
Consignment |
|
$ |
55,877 |
|
|
$ |
37,470 |
|
|
$ |
213,609 |
|
|
$ |
174,994 |
|
Product |
|
|
25,516 |
|
|
|
33,848 |
|
|
|
108,413 |
|
|
|
113,385 |
|
Total revenue |
|
|
81,393 |
|
|
|
71,318 |
|
|
|
322,022 |
|
|
|
288,379 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Consignment |
|
|
10,801 |
|
|
|
7,661 |
|
|
|
39,732 |
|
|
|
37,015 |
|
Product |
|
|
20,239 |
|
|
|
18,691 |
|
|
|
68,485 |
|
|
|
59,026 |
|
Total cost of revenue |
|
|
31,040 |
|
|
|
26,352 |
|
|
|
108,217 |
|
|
|
96,041 |
|
Gross profit |
|
|
50,353 |
|
|
|
44,966 |
|
|
|
213,805 |
|
|
|
192,338 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Operations, product and technology |
|
|
38,239 |
|
|
|
33,818 |
|
|
|
156,712 |
|
|
|
155,642 |
|
Marketing |
|
|
11,354 |
|
|
|
12,999 |
|
|
|
66,273 |
|
|
|
64,369 |
|
Sales, general and administrative |
|
|
15,510 |
|
|
|
14,538 |
|
|
|
62,657 |
|
|
|
61,814 |
|
Total operating expenses |
|
|
65,103 |
|
|
|
61,355 |
|
|
|
285,642 |
|
|
|
281,825 |
|
Operating loss |
|
|
(14,750 |
) |
|
|
(16,389 |
) |
|
|
(71,837 |
) |
|
|
(89,487 |
) |
Interest expense |
|
|
(709 |
) |
|
|
(41 |
) |
|
|
(2,239 |
) |
|
|
(805 |
) |
Other income (expense),
net |
|
|
841 |
|
|
|
(3,065 |
) |
|
|
2,847 |
|
|
|
(1,957 |
) |
Loss before income taxes |
|
|
(14,618 |
) |
|
|
(19,495 |
) |
|
|
(71,229 |
) |
|
|
(92,249 |
) |
Provision (benefit) for income
taxes |
|
|
(5 |
) |
|
|
4 |
|
|
|
19 |
|
|
|
35 |
|
Net loss |
|
$ |
(14,613 |
) |
|
$ |
(19,499 |
) |
|
$ |
(71,248 |
) |
|
$ |
(92,284 |
) |
Loss per share, basic and
diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.68 |
) |
|
$ |
(0.92 |
) |
Weighted-average shares used
in computing loss per share, basic and diluted |
|
|
107,716 |
|
|
|
101,027 |
|
|
|
104,875 |
|
|
|
99,817 |
|
|
ThredUp Inc.Consolidated Statements of
Comprehensive Loss(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31,2023 |
|
December 31,2022 |
|
December 31,2023 |
|
December 31,2022 |
|
|
(in thousands) |
Net loss |
|
$ |
(14,613 |
) |
|
$ |
(19,499 |
) |
|
$ |
(71,248 |
) |
|
$ |
(92,284 |
) |
Other comprehensive income
(loss), net of tax: |
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
1,549 |
|
|
|
2,840 |
|
|
|
777 |
|
|
|
(2,418 |
) |
Unrealized gain (loss) on available-for-sale securities |
|
|
17 |
|
|
|
562 |
|
|
|
1,082 |
|
|
|
(722 |
) |
Total other comprehensive
income (loss) |
|
|
1,566 |
|
|
|
3,402 |
|
|
|
1,859 |
|
|
|
(3,140 |
) |
Total comprehensive loss |
|
$ |
(13,047 |
) |
|
$ |
(16,097 |
) |
|
$ |
(69,389 |
) |
|
$ |
(95,424 |
) |
|
ThredUp Inc.Consolidated Statements of
Cash Flows(unaudited) |
|
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(in thousands) |
Cash flows from operating
activities: |
|
|
|
|
Net loss |
|
$ |
(71,248 |
) |
|
$ |
(92,284 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
18,732 |
|
|
|
14,033 |
|
Stock-based compensation expense |
|
|
31,682 |
|
|
|
26,817 |
|
Reduction in carrying amount of right-of-use assets |
|
|
6,355 |
|
|
|
6,473 |
|
Other |
|
|
857 |
|
|
|
5,593 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable, net |
|
|
(3,126 |
) |
|
|
(530 |
) |
Inventory |
|
|
2,209 |
|
|
|
(7,886 |
) |
Other current and non-current assets |
|
|
1,180 |
|
|
|
893 |
|
Accounts payable |
|
|
1,697 |
|
|
|
(3,985 |
) |
Accrued and other current liabilities |
|
|
(9,092 |
) |
|
|
1,752 |
|
Seller payable |
|
|
5,312 |
|
|
|
(2,945 |
) |
Operating lease liabilities |
|
|
(7,095 |
) |
|
|
924 |
|
Other non-current liabilities |
|
|
(54 |
) |
|
|
(960 |
) |
Net cash used in operating
activities |
|
|
(22,591 |
) |
|
|
(52,105 |
) |
Cash flows from investing
activities: |
|
|
|
|
Purchases of marketable securities |
|
|
(17,915 |
) |
|
|
(3,475 |
) |
Maturities of marketable securities |
|
|
77,579 |
|
|
|
55,650 |
|
Purchases of property and equipment |
|
|
(15,984 |
) |
|
|
(43,251 |
) |
Net cash provided by investing
activities |
|
|
43,680 |
|
|
|
8,924 |
|
Cash flows from financing
activities: |
|
|
|
|
Proceeds from debt, net of discount |
|
|
— |
|
|
|
391 |
|
Repayment of debt |
|
|
(4,000 |
) |
|
|
(6,333 |
) |
Proceeds from issuance of stock-based awards |
|
|
5,162 |
|
|
|
4,202 |
|
Payments of withholding taxes on stock-based awards |
|
|
(4,765 |
) |
|
|
(2,196 |
) |
Net cash used in financing
activities |
|
|
(3,603 |
) |
|
|
(3,936 |
) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
|
(68 |
) |
|
|
(672 |
) |
Net change in cash, cash
equivalents and restricted cash |
|
|
17,418 |
|
|
|
(47,789 |
) |
Cash, cash equivalents and
restricted cash, beginning of period |
|
|
44,051 |
|
|
|
91,840 |
|
Cash, cash equivalents and
restricted cash, end of period |
|
$ |
61,469 |
|
|
$ |
44,051 |
|
|
ThredUp Inc.Reconciliation of GAAP to
Non-GAAP Financial
Measures(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31,2023 |
|
December 31,2022 |
|
December 31,2023 |
|
December 31,2022 |
|
|
(in thousands) |
Net loss |
|
$ |
(14,613 |
) |
|
$ |
(19,499 |
) |
|
$ |
(71,248 |
) |
|
$ |
(92,284 |
) |
Stock-based compensation
expense |
|
|
6,775 |
|
|
|
6,059 |
|
|
|
31,682 |
|
|
|
26,817 |
|
Depreciation and
amortization |
|
|
4,851 |
|
|
|
3,816 |
|
|
|
18,732 |
|
|
|
14,033 |
|
Interest expense |
|
|
709 |
|
|
|
41 |
|
|
|
2,239 |
|
|
|
805 |
|
Severance and other |
|
|
138 |
|
|
|
(14 |
) |
|
|
1,196 |
|
|
|
3,182 |
|
Provision (benefit) for income
taxes |
|
|
(5 |
) |
|
|
4 |
|
|
|
19 |
|
|
|
35 |
|
Impairment of non-marketable
equity investment |
|
|
— |
|
|
|
3,750 |
|
|
|
— |
|
|
|
3,750 |
|
Acquisition and
offering-related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
274 |
|
Non-GAAP Adjusted EBITDA
loss |
|
$ |
(2,145 |
) |
|
$ |
(5,843 |
) |
|
$ |
(17,380 |
) |
|
$ |
(43,388 |
) |
Investorsir@thredup.com
Mediamedia@thredup.com
About ThredUpThredUp is
transforming resale with technology and a mission to inspire the
world 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 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, 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 172 million unique
secondhand items from 55,000 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 StatementsThis
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 first
quarter and full year of 2024; statements about future operating
results, capital expenditures and other developments in our
business in the U.S. and Europe and our long term growth; the
momentum of our business; our investments in technology and
infrastructure, including our AI-powered search experience; our
ability to successfully integrate and realize the benefits of our
past or future strategic acquisitions, investments or restructuring
activities; and our ability to attract new Active Buyers.
Forward-looking statements are neither
historical facts nor assurances of future performance.
Forward-looking statements involve substantial risks and
uncertainties that may cause actual results to differ materially
from those that we expect. These risks and uncertainties include,
but are not limited to: our ability to attract new users and
convert users into buyers and active buyers; our ability to achieve
profitability; the sufficiency of our cash, cash equivalents and
capital resources to meet our liquidity needs; our ability to
effectively manage or sustain our growth and to effectively expand
our operations; our ability to continue to generate revenue from
new RaaS offerings as sources of revenue; risks from an intensely
competitive market; our ability to effectively deploy new and
evolving technologies, such as artificial intelligence and machine
learning, in our offerings; risks arising from economic and
industry trends, including the effects of foreign currency exchange
rate fluctuations, inflationary pressures, increased interest
rates, changing consumer habits, climate change and general global
economic uncertainty; our ability to comply with applicable laws
and regulations; and our ability to successfully integrate and
realize the benefits of our past or future strategic acquisitions
or investments. More information on these risks and other potential
factors that could affect the Company’s business, reputation,
results of operations, financial condition, and stock price is
included in the Company’s filings with the Securities and Exchange
Commission (“SEC”), including in the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of the Company’s most recently
filed periodic reports on Form 10-K and subsequent filings.
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.
Channels for Disclosure of
InformationThredUp intends to announce material
information to the public through the ThredUp Investor Relations
website ir.thredup.com, SEC filings, press releases, public
conference calls, and public webcasts. ThredUp uses these channels,
as well as social media, to communicate with its investors,
customers, and the public about the company, its offerings, and
other issues. It is possible that the information ThredUp posts on
social media could be deemed to be material information. As such,
ThredUp encourages investors, the media, and others to follow the
channels listed above, including the social media channels listed
on ThredUp’s investor relations website, and to review the
information disclosed through such channels.
Operating MetricsAn 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 and purchased in our marketplaces, including through our
RaaS® clients, and is identified by a unique email address. 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 marketplaces, including through our
RaaS® clients, in a given period, net of cancellations.
Non-GAAP Financial MeasuresThis
press release and the accompanying tables contain non-GAAP
financial measures, including: Adjusted EBITDA loss and Adjusted
EBITDA loss margin. In addition to our results determined in
accordance with GAAP, we believe these non-GAAP measures, are
useful in evaluating our operating performance. We use these
measures to evaluate and assess our operating performance and the
operating leverage in our business, and for internal planning and
forecasting purposes. We believe that these non-GAAP measures, when
taken collectively with our GAAP results, may be helpful to
investors because they provide consistency and comparability with
past financial performance and assist in comparisons with other
companies, some of which use similar non-GAAP financial information
to supplement their GAAP results. Our non-GAAP measures are
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 similarly-titled
non-GAAP measures used by other companies. We encourage investors
to review our results determined in accordance with GAAP and the
accompanying reconciliations for more information.
A reconciliation is provided above for Adjusted EBITDA loss to
net loss, the most directly comparable financial measure stated in
accordance with GAAP. We calculate Adjusted EBITDA loss as net loss
adjusted to exclude, where applicable in a given period,
stock-based compensation expense, depreciation and amortization,
interest expense, severance and other, provision (benefit) for
income taxes, impairment of non-marketable equity investment and
acquisition and offering-related expenses. Non-GAAP Adjusted EBITDA
loss margin represents Non-GAAP Adjusted EBITDA loss divided by
Total revenue for the same period.
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