ThredUp Inc. (Nasdaq: TDUP) (LTSE: TDUP), one of the largest online
resale platforms for apparel, shoes, and accessories, announced
today its financial results for the second quarter ended
June 30, 2023.
"As we enter our third year as a public company,
we're proud of our strong Q2 results," said thredUP CEO and
co-founder James Reinhart. "Our performance demonstrates both the
management team’s ability to forecast and manage the business amid
a dynamic consumer environment as well as the sound strategy behind
key company initiatives that have powered our growth and margin
expansion."
Second Quarter
2023 Financial Highlights
-
Revenue: Total revenue of $82.7 million, an
increase of 8% year-over-year.
- Gross
Profit and Gross Margin: Gross profit totaled
$55.7 million, representing an increase of 6% year-over-year.
Gross margin was 67.4% as compared to 68.9% for the second quarter
2022.
- Net
Loss: Net loss was $18.8 million, or a negative 22.7%
of revenue, for the second quarter 2023, compared to a net loss of
$28.4 million, or a negative 37.2% of revenue, for the second
quarter 2022.
- Adjusted
EBITDA Loss and EBITDA Loss
Margin1: Adjusted EBITDA
loss was $5.0 million, or a negative 6.1% of revenue, for the
second quarter 2023, compared to an Adjusted EBITDA loss of $13.5
million, or a negative 17.7% of revenue, for the second quarter
2022.
- Active
Buyers and Orders: Active Buyers of 1.7 million and
Orders of 1.8 million, representing a decrease of 0.8% and an
increase of 5%, respectively, over the comparable quarter last
year.
_________________________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
-
Resale-as-a-Service®
(“RaaS®”): thredUP continued to
grow its RaaS client roster, launching a dozen new resale programs
in Q2 with brands including American Eagle, TOMS, and The Container
Store.
- Published
Second Annual Impact Report: thredUP released its second
annual Impact Report in July 2023. The report outlines the
company's business and brand-aligned environmental, social, and
governance (ESG) strategy and details the progress made across
initiatives in 2022 against SASB and GRI disclosure frameworks.
Read the report here https://ir.thredup.com/impact-at-thredUp
- Announced
dual-listing on LTSE: thredUP announced that it listed its
Class A common stock on the Long-Term Stock Exchange (LTSE) in a
dual listing. LTSE’s principles-based listing standards require
listed companies to detail and publish policies on their website
that offer stakeholders insight into how a company builds its
business for the long term. By listing on LTSE, thredUP is
affirming its strategic alignment with long-term shareholders,
employees, customers, and communities within a public market
designed to promote sustainability, resilience, and long-term value
creation.
- Named to
TIME100's Most Influential Companies of 2023: thredUP was
recognized for its impact by being named to TIME100's Most
Influential Companies of 2023, which highlights companies making an
extraordinary impact.
- Partnered
with "Barbie" Costume Designer: thredUP partnered with
"Barbie" costume designer Jacqueline Durran to launch an exclusive
shopping experience that makes it easy for #Barbiecore fans to
participate in summer's hottest trend in a more sustainable
way.
Financial Outlook
For the third quarter 2023, thredUP expects:
- Revenue in the
range of $82.0 million to $84.0 million
- Gross margin in the
range of 66.5% to 68.5%
- Adjusted EBITDA
loss margin in the range of 6.5% to 4.5%
For the fourth quarter 2023, thredUP
expects:
- Revenue in the
range of $84.5 million to $86.5 million
- Gross margin in the
range of 64.5% to 66.5%
- Breakeven Adjusted
EBITDA margin
For the full fiscal year 2023, thredUP
expects:
- Revenue in the
range of $325.0 million to $329.0 million
- Gross margin in the
range of 66.5% to 67.5%
- Adjusted EBITDA
loss margin in the range of 5.5% to 4.5%
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. |
Condensed Consolidated Balance Sheets |
(unaudited) |
|
|
|
June 30,2023 |
|
December 31,2022 |
|
|
(in thousands) |
ASSETS |
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
51,073 |
|
|
$ |
38,029 |
|
Marketable securities |
|
|
25,856 |
|
|
|
66,902 |
|
Accounts receivable, net |
|
|
3,782 |
|
|
|
4,669 |
|
Inventory |
|
|
20,362 |
|
|
|
17,519 |
|
Other current assets |
|
|
8,238 |
|
|
|
7,076 |
|
Total current assets |
|
|
109,311 |
|
|
|
134,195 |
|
Operating lease right-of-use assets |
|
|
45,265 |
|
|
|
46,153 |
|
Property and equipment, net |
|
|
93,786 |
|
|
|
92,482 |
|
Goodwill |
|
|
11,756 |
|
|
|
11,592 |
|
Intangible assets |
|
|
9,346 |
|
|
|
10,499 |
|
Other assets |
|
|
6,867 |
|
|
|
7,027 |
|
Total assets |
|
$ |
276,331 |
|
|
$ |
301,948 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
8,780 |
|
|
$ |
7,800 |
|
Accrued and other current liabilities |
|
|
43,334 |
|
|
|
50,155 |
|
Seller payable |
|
|
19,471 |
|
|
|
16,166 |
|
Operating lease liabilities, current |
|
|
5,834 |
|
|
|
6,413 |
|
Current portion of long-term debt |
|
|
3,830 |
|
|
|
3,879 |
|
Total current liabilities |
|
|
81,249 |
|
|
|
84,413 |
|
Operating lease liabilities, non-current |
|
|
47,356 |
|
|
|
48,727 |
|
Long-term debt, net of current portion |
|
|
23,928 |
|
|
|
25,788 |
|
Other non-current liabilities |
|
|
3,200 |
|
|
|
3,019 |
|
Total liabilities |
|
|
155,733 |
|
|
|
161,947 |
|
Commitments and contingencies |
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock |
|
|
11 |
|
|
|
10 |
|
Additional paid-in capital |
|
|
569,780 |
|
|
|
551,852 |
|
Accumulated other comprehensive loss |
|
|
(3,013 |
) |
|
|
(4,234 |
) |
Accumulated deficit |
|
|
(446,180 |
) |
|
|
(407,627 |
) |
Total stockholders’ equity |
|
|
120,598 |
|
|
|
140,001 |
|
Total liabilities and stockholders’ equity |
|
$ |
276,331 |
|
|
$ |
301,948 |
|
ThredUp Inc. |
Condensed Consolidated Statements of
Operations |
(unaudited) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
|
|
(in thousands, except per share amounts) |
Revenue: |
|
|
|
|
|
|
|
|
Consignment |
|
$ |
53,415 |
|
|
$ |
48,536 |
|
|
$ |
99,894 |
|
|
$ |
95,971 |
|
Product |
|
|
29,243 |
|
|
|
27,885 |
|
|
|
58,686 |
|
|
|
53,145 |
|
Total revenue |
|
|
82,658 |
|
|
|
76,421 |
|
|
|
158,580 |
|
|
|
149,116 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
Consignment |
|
|
9,580 |
|
|
|
10,218 |
|
|
|
18,800 |
|
|
|
20,267 |
|
Product |
|
|
17,346 |
|
|
|
13,555 |
|
|
|
32,955 |
|
|
|
25,973 |
|
Total cost of revenue |
|
|
26,926 |
|
|
|
23,773 |
|
|
|
51,755 |
|
|
|
46,240 |
|
Gross profit |
|
|
55,732 |
|
|
|
52,648 |
|
|
|
106,825 |
|
|
|
102,876 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Operations, product, and technology |
|
|
39,771 |
|
|
|
43,961 |
|
|
|
78,118 |
|
|
|
83,122 |
|
Marketing |
|
|
18,643 |
|
|
|
19,640 |
|
|
|
35,513 |
|
|
|
36,618 |
|
Sales, general, and administrative |
|
|
16,030 |
|
|
|
17,380 |
|
|
|
32,089 |
|
|
|
32,044 |
|
Total operating expenses |
|
|
74,444 |
|
|
|
80,981 |
|
|
|
145,720 |
|
|
|
151,784 |
|
Operating loss |
|
|
(18,712 |
) |
|
|
(28,333 |
) |
|
|
(38,895 |
) |
|
|
(48,908 |
) |
Interest expense |
|
|
721 |
|
|
|
238 |
|
|
|
798 |
|
|
|
661 |
|
Other income, net |
|
|
(685 |
) |
|
|
(181 |
) |
|
|
(1,161 |
) |
|
|
(484 |
) |
Loss before provision for income taxes |
|
|
(18,748 |
) |
|
|
(28,390 |
) |
|
|
(38,532 |
) |
|
|
(49,085 |
) |
Provision for income taxes |
|
|
12 |
|
|
|
9 |
|
|
|
21 |
|
|
|
22 |
|
Net loss |
|
$ |
(18,760 |
) |
|
$ |
(28,399 |
) |
|
$ |
(38,553 |
) |
|
$ |
(49,107 |
) |
Loss per share, basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.50 |
) |
Weighted-average shares used in computing loss per share, basic and
diluted |
|
|
103,905 |
|
|
|
99,331 |
|
|
|
102,911 |
|
|
|
98,979 |
|
ThredUp Inc. |
Condensed Consolidated Statements of Comprehensive
Loss |
(unaudited) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
|
|
(in thousands) |
Net loss |
|
$ |
(18,760 |
) |
|
$ |
(28,399 |
) |
|
$ |
(38,553 |
) |
|
$ |
(49,107 |
) |
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(236 |
) |
|
|
(2,333 |
) |
|
|
308 |
|
|
|
(3,041 |
) |
Unrealized gain (loss) on available-for-sale securities |
|
|
303 |
|
|
|
(254 |
) |
|
|
913 |
|
|
|
(1,256 |
) |
Total other comprehensive income (loss) |
|
|
67 |
|
|
|
(2,587 |
) |
|
|
1,221 |
|
|
|
(4,297 |
) |
Total comprehensive loss |
|
$ |
(18,693 |
) |
|
$ |
(30,986 |
) |
|
$ |
(37,332 |
) |
|
$ |
(53,404 |
) |
ThredUp Inc. |
Condensed Consolidated Statements of Cash
Flows |
(unaudited) |
|
|
|
Six Months Ended |
|
|
June 30,2023 |
|
June 30,2022 |
|
|
(in thousands) |
Cash flows from operating activities: |
|
|
|
|
Net loss |
|
$ |
(38,553 |
) |
|
$ |
(49,107 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
8,517 |
|
|
|
6,678 |
|
Stock-based compensation expense |
|
|
17,019 |
|
|
|
13,581 |
|
Reduction in carrying amount of right-of-use assets |
|
|
3,177 |
|
|
|
2,905 |
|
Other |
|
|
291 |
|
|
|
1,138 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable, net |
|
|
916 |
|
|
|
682 |
|
Inventory |
|
|
(2,670 |
) |
|
|
(4,703 |
) |
Other current and non-current assets |
|
|
(699 |
) |
|
|
(4,799 |
) |
Accounts payable |
|
|
177 |
|
|
|
1,954 |
|
Accrued and other current liabilities |
|
|
(1,750 |
) |
|
|
749 |
|
Seller payable |
|
|
3,301 |
|
|
|
3,465 |
|
Operating lease liabilities |
|
|
(4,240 |
) |
|
|
2,602 |
|
Other non-current liabilities |
|
|
(325 |
) |
|
|
20 |
|
Net cash used in operating activities |
|
|
(14,839 |
) |
|
|
(24,835 |
) |
Cash flows from investing activities: |
|
|
|
|
Purchases of marketable securities |
|
|
(7,878 |
) |
|
|
(3,475 |
) |
Maturities of marketable securities |
|
|
49,479 |
|
|
|
26,294 |
|
Purchases of property and equipment |
|
|
(12,292 |
) |
|
|
(27,583 |
) |
Net cash provided by (used in) investing activities |
|
|
29,309 |
|
|
|
(4,764 |
) |
Cash flows from financing activities: |
|
|
|
|
Repayment of debt |
|
|
(2,000 |
) |
|
|
(4,000 |
) |
Proceeds from issuance of stock-based awards |
|
|
2,136 |
|
|
|
3,147 |
|
Payment of withholding taxes on stock-based awards |
|
|
(1,885 |
) |
|
|
(1,479 |
) |
Net cash used in financing activities |
|
|
(1,749 |
) |
|
|
(2,332 |
) |
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
|
324 |
|
|
|
(521 |
) |
Net change in cash, cash equivalents, and restricted cash |
|
|
13,045 |
|
|
|
(32,452 |
) |
Cash, cash equivalents, and restricted cash, beginning of
period |
|
|
44,051 |
|
|
|
91,840 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
57,096 |
|
|
$ |
59,388 |
|
ThredUp Inc. |
Reconciliation of GAAP to Non-GAAP Financial
Measures |
(unaudited) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
|
|
(in thousands) |
Net loss |
|
$ |
(18,760 |
) |
|
|
$ |
(28,399 |
) |
|
|
$ |
(38,553 |
) |
|
|
$ |
(49,107 |
) |
|
Interest expense |
|
|
721 |
|
|
|
|
238 |
|
|
|
|
798 |
|
|
|
|
661 |
|
|
Provision for income taxes |
|
|
12 |
|
|
|
|
9 |
|
|
|
|
21 |
|
|
|
|
22 |
|
|
Depreciation and amortization |
|
|
4,836 |
|
|
|
|
3,407 |
|
|
|
|
8,517 |
|
|
|
|
6,678 |
|
|
Stock-based compensation expense |
|
|
7,628 |
|
|
|
|
10,058 |
|
|
|
|
17,019 |
|
|
|
|
13,581 |
|
|
Acquisition-related expenses |
|
|
— |
|
|
|
|
70 |
|
|
|
|
— |
|
|
|
|
274 |
|
|
Severance and other |
|
|
551 |
|
|
|
|
1,076 |
|
|
|
|
551 |
|
|
|
|
1,387 |
|
|
Non-GAAP Adjusted EBITDA loss |
|
$ |
(5,012 |
) |
|
|
$ |
(13,541 |
) |
|
|
$ |
(11,647 |
) |
|
|
$ |
(26,504 |
) |
|
Total revenue |
|
|
82,658 |
|
|
|
|
76,421 |
|
|
|
|
158,580 |
|
|
|
|
149,116 |
|
|
Non-GAAP Adjusted EBITDA loss margin |
|
|
(6.1 |
) |
% |
|
|
(17.7 |
) |
% |
|
|
(7.3 |
) |
% |
|
|
(17.8 |
) |
% |
|
|
|
|
|
|
|
|
|
Investorsir@thredup.com
Mediamedia@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 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 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 and
fourth quarters and full year of 2023; 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 inflationary pressures, increased interest rates and
general global economic uncertainty 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 and expansion of our RaaS® model and the
timing and plans for future RaaS® clients; and our ability to
attract new Active Buyers.
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 Form 10-Q 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.
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 and purchased in our
marketplaces, including through our RaaS® clients. 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 marketplaces, including through our
RaaS® clients, 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 loss and
Adjusted EBITDA loss margin. In addition to our results determined
in accordance with GAAP, we believe that Adjusted EBITDA loss and
Adjusted EBITDA loss margin, non-GAAP measures, are useful in
evaluating our operating performance. We use Adjusted EBITDA loss
and Adjusted EBITDA loss 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 loss and Adjusted EBITDA loss margin, 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. Adjusted EBITDA loss and Adjusted
EBITDA loss margin 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.
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, interest expense, provision for income taxes,
depreciation and amortization, stock-based compensation expense,
acquisition-related expenses, and severance and other.
Investors are encouraged to review our results
determined in accordance with GAAP and the reconciliation of
Adjusted EBITDA loss to net loss. thredUP is not providing a
quantitative reconciliation of forward-looking guidance of 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, change in fair
value of convertible preferred stock warrant liability 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 third and fourth quarters of 2023 and full year
2023, depreciation and amortization is expected to be
$4.5 million, $4.5 million and $17.5 million,
respectively. In addition, for the third and fourth quarters of
2023 and full year 2023, stock-based compensation expense is
expected to be $7.3 million, $7.3 million and
$31.6 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 loss margin.
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