thredUP Announces Second Quarter 2022 Results

·14 min read
ThredUp Inc.
ThredUp Inc.
  • 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.