8-K
ThredUp Inc. (TDUP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2021
ThredUp Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40249 | 26-4009181 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission File Number) | (I.R.S. Employer<br>Identification No.) |
| 969 Broadway, Suite 200<br>Oakland, California | 94607 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (415) 402-5202
Not Applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, par value $0.0001 per share | TDUP | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On November 8, 2021, ThredUp Inc. (the "Company") issued a press release announcing its financial results for the quarter ended September 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of the supplemental financial information is attached hereto as Exhibit 99.2. The press release and supplemental financial information are incorporated herein by reference.
The information in this current report on Form 8-K and the exhibits attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release datedNovember8, 2021 |
| 99.2 | Supplemental Financial Information datedNovember8, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 9, 2021 | THREDUP INC. | |
|---|---|---|
| By: | /s/ Sean Sobers | |
| Sean Sobers | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Document
thredUP Announces Third Quarter 2021 Results
•All-time quarterly revenue high of $63.3 million, representing 35% growth year-over-year
•Third quarter gross margin of 73% and gross profit growth of 41% year-over-year
•Record number of Active Buyers and Orders
•Announced the newest distribution center in Texas, expected to more than double our current capacity when fully operational
•Established new Resale-as-a-ServiceⓇ (RaaSⓇ) programs with adidas, Crocs, and Michael Stars
Oakland, CA – November 8, 2021 – 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 third quarter ended September 30, 2021.
“Third-quarter marked another quarter of exceptional financial performance, with our platform demonstrating strong resilience amidst headwinds posed by the pandemic,” said James Reinhart, CEO and co-founder at thredUP. “Supply continues to appear endless, demand for secondhand is increasing with more first-time buyers trying thredUP, and we’re doubling down on infrastructure investments so we can continue providing our buyers with a vast and ever-changing selection of great brands at great prices.”
Third Quarter 2021 Financial Highlights
•Revenue: Third quarter total revenue of $63.3 million, an increase of 35% year-over-year.
•Gross Profit and Gross Margin: Gross profit totaled $46.1 million representing growth of 41% year-over-year. Gross margin expanded to 73% from 70% in the comparable quarter last year.
•Net Loss: The GAAP net loss was $14.7 million, or 23% of revenue, for the third quarter 2021, compared to a GAAP net loss of $11.0 million, or 23% of revenue, for the third quarter 2020.
•Adjusted EBITDA and EBITDA Margin: The Adjusted EBITDA loss was $7.8 million, or 12% of revenue, for the third quarter 2021, compared to the Adjusted EBITDA loss of $7.5 million, or 16% of revenue, for the third quarter 2020.
•Active Buyers and Orders: Active Buyers of 1.4 million and Orders of 1.3 million growing 14% and 28%, respectively, over the comparable quarter last year.
•New Distribution Center outside Dallas, Texas: This four-level facility, which will be thredUP’s largest and most-automated distribution center to-date, is expected to boost our total distribution network capacity to 16.5 million items when fully operational, more than doubling our current capacity.
Recent Business Highlights
•Closed the Remix Acquisition: Acquisition closed in October (Q4), kickstarting our international expansion.
•Resale-as-a-ServiceⓇ (RaaSⓇ): thredUP announced new RaaS programs with adidas, Crocs, and Michael Stars and expanded its ongoing partnership with Madewell by launching “A Circular Store” in Brooklyn, NY.
•Strategic Investment in Latin America: thredUP completed a strategic investment in Vopero, a resale marketplace serving Latin America.
Remix Acquisition Closes
thredUP closed the acquisition of Remix in early October. The transaction marks thredUP’s official entry into Europe.
CEO and co-founder James Reinhart further commented, “thredUP is thrilled to bring our proprietary resale infrastructure and technology to Remix. We’re starting to integrate our proprietary software and systems into their existing operating platform and believe this will elevate the resale experience for buyers and sellers in Central and Eastern Europe.”
Financial Outlook
Guidance for the fourth quarter 2021 includes estimates for the Remix acquisition, which closed on October 7.
For the fourth quarter 2021, thredUP expects:
•Revenue in the range of $69 million to $71 million
•Gross margin in the range of 65% to 67%
•Adjusted EBITDA margin loss in the range of 17.0% to 15.0%
For the full fiscal year 2021, thredUP expects:
•Revenue in the range of $248 million to $250 million
•Gross margin of approximately 71%
•Adjusted EBITDA margin loss of approximately 15%
Conference Call and Webcast Information
•Conference Call: The live call is accessible in the U.S. and Canada at +1 800-353-6461 (code 3975322) and outside of the U.S. and Canada at +1 334-323-0501 (code 3975322).
•Webcast: The live and archived webcast and related earnings materials will be available at thredUP’s investor relations website: ir.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 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. In 2018, we expanded our platform with thredUP's Resale-as-a-Service (RaaSⓇ), which facilitates modern resale for a number of the world's leading brands and retailers. 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 fourth quarter and full year of 2021;
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 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 or investments; 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 in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations'' in the final prospectus for our initial public offering filed on March 26, 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 below 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, acquisition and offering related expenses, interest expense, 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 fourth quarter of 2021 and full year 2021, depreciation and amortization is expected to be $2.7 million and $8.9 million, respectively. In addition, for the fourth quarter of 2021 and full year 2021, stock-based compensation expense is expected to be $3.0 million and $12.4 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.
ThredUp Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 160,912 | $ | 64,485 |
| Marketable securities | 100,762 | — | ||
| Accounts receivable, net | 1,895 | 1,823 | ||
| Inventory, net | 4,106 | 3,519 | ||
| Other current assets | 7,773 | 5,332 | ||
| Total current assets | 275,448 | 75,159 | ||
| Operating lease right-of-use assets | 20,455 | 23,656 | ||
| Property and equipment, net | 49,451 | 41,131 | ||
| Other assets | 4,864 | 2,965 | ||
| Total assets | $ | 350,218 | $ | 142,911 |
| Liabilities, Convertible Preferred Stock and Stockholders’ Equity | ||||
| Current liabilities | ||||
| Accounts payable | $ | 8,407 | $ | 9,386 |
| Accrued and other current liabilities | 46,427 | 32,541 | ||
| Seller payable | 18,306 | 13,724 | ||
| Operating lease liabilities, current | 2,757 | 3,643 | ||
| Current portion of long-term debt | 7,757 | 3,270 | ||
| Total current liabilities | 83,654 | 62,564 | ||
| Operating lease liabilities, non-current | 19,225 | 21,574 | ||
| Long-term debt | 29,478 | 31,190 | ||
| Other non-current liabilities | 2,187 | 2,719 | ||
| Total liabilities | 134,544 | 118,047 | ||
| Convertible preferred stock | — | 247,041 | ||
| Stockholders’ equity: | ||||
| Common stock | 10 | 1 | ||
| Additional paid-in capital | 513,124 | 29,989 | ||
| Accumulated other comprehensive loss | (28) | — | ||
| Accumulated deficit | (297,432) | (252,167) | ||
| Total stockholders’ equity (deficit) | 215,674 | (222,177) | ||
| Total liabilities, convertible preferred stock and stockholders’ equity | $ | 350,218 | $ | 142,911 |
ThredUp Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Revenue: | ||||||||
| Consignment | $ | 48,071 | $ | 33,657 | $ | 141,356 | $ | 103,885 |
| Product | 15,203 | 13,275 | 37,557 | 38,697 | ||||
| Total revenue | 63,274 | 46,932 | 178,913 | 142,582 | ||||
| Cost of revenue: | ||||||||
| Consignment | 10,080 | 7,984 | 31,599 | 25,097 | ||||
| Product | 7,100 | 6,172 | 17,370 | 19,072 | ||||
| Total cost of revenue | 17,180 | 14,156 | 48,969 | 44,169 | ||||
| Gross profit | 46,094 | 32,776 | 129,944 | 98,413 | ||||
| Operating expenses: | ||||||||
| Operations, product and technology | 32,081 | 25,856 | 91,455 | 73,480 | ||||
| Marketing | 16,941 | 10,614 | 48,344 | 34,513 | ||||
| Sales, general and administrative | 12,569 | 6,891 | 34,206 | 20,762 | ||||
| Total operating expenses | 61,591 | 43,361 | 174,005 | 128,755 | ||||
| Operating loss | (15,497) | (10,585) | (44,061) | (30,342) | ||||
| Interest and other (expense) income, net | 799 | (419) | (1,147) | (534) | ||||
| Loss before provision for income taxes | (14,698) | (11,004) | (45,208) | (30,876) | ||||
| Provision for income taxes | 17 | — | 57 | — | ||||
| Net loss | $ | (14,715) | $ | (11,004) | $ | (45,265) | $ | (30,876) |
| Net loss per share attributable to common stockholders, basic and diluted | $ | (0.15) | $ | (0.93) | $ | (0.65) | $ | (2.77) |
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 96,348,658 | 11,810,075 | 70,112,601 | 11,144,362 |
ThredUp Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Nine months ended September 30, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Cash flows from operating activities | ||||
| Net loss | $ | (45,265) | $ | (30,876) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Depreciation and amortization | 6,147 | 3,868 | ||
| Stock-based compensation expense | 9,389 | 5,057 | ||
| Reduction in the carrying amount of right-of-use assets | 3,201 | 2,882 | ||
| Changes in fair value of convertible preferred stock warrants and others | 1,768 | 166 | ||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable, net | (72) | 1,032 | ||
| Inventory, net | (587) | 31 | ||
| Other current and non-current assets | (4,720) | (176) | ||
| Accounts payable | 574 | 6,029 | ||
| Accrued and other current liabilities | 14,082 | 4,252 | ||
| Seller payable | 4,582 | 4,023 | ||
| Operating lease liabilities | (3,235) | (2,851) | ||
| Other non-current liabilities | 4 | 1,700 | ||
| Net cash used in operating activities | (14,132) | (4,863) | ||
| Cash flows from investing activities | ||||
| Purchases of marketable securities | (102,715) | — | ||
| Maturities of marketable securities | 1,600 | — | ||
| Purchase of property and equipment | (15,207) | (14,359) | ||
| Net cash used in investing activities | (116,322) | (14,359) | ||
| Cash flows from financing activities | ||||
| Proceeds from debt issuance, net of issuance costs | 4,625 | 13,427 | ||
| Repayment of debt | (2,000) | (1,190) | ||
| Proceeds from issuance of Class A common stock upon initial public offering and the follow-on offering, net of underwriting discounts and commissions | 226,905 | — | ||
| Proceeds from exercise of common stock options and withholding taxes for the net share settlement of restricted stock units | 3,753 | 1,810 | ||
| Payment of costs for the initial public offering and the follow-on offering | (4,251) | (651) | ||
| Net cash provided by financing activities | 229,032 | 13,396 | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | 98,578 | (5,826) | ||
| Cash, cash equivalents and restricted cash and cash equivalents | ||||
| Beginning of period | 67,539 | 87,853 | ||
| End of period | $ | 166,117 | $ | 82,027 |
ThredUp Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except percentages)
(unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Adjusted EBITDA Reconciliation: | ||||||||||||
| Net loss | $ | (14,715) | $ | (11,004) | $ | (45,265) | $ | (30,876) | ||||
| Depreciation and amortization | 2,248 | 1,425 | 6,147 | 3,868 | ||||||||
| Stock-based compensation expense | 2,995 | 1,649 | 9,389 | 5,057 | ||||||||
| Acquisition and offering related expenses | 1,020 | — | 1,020 | — | ||||||||
| Interest expense | 619 | 368 | 1,751 | 865 | ||||||||
| Change in fair value of convertible preferred stock warrant liability | — | 89 | 930 | (84) | ||||||||
| Provision for income taxes | 17 | — | 57 | — | ||||||||
| Adjusted EBITDA | $ | (7,816) | $ | (7,473) | $ | (25,971) | $ | (21,170) | ||||
| Adjusted EBITDA margin % | (12.4) | % | (15.9) | % | (14.5) | % | (14.8) | % |
Media
media@thredup.com
Investors
ir@thredup.com
11
Document
ThredUp Inc.
Third Quarter 2021 Supplemental Financials
Key Financial Metrics for the Quarter
•Revenue of $63.3 million
•vs. $46.9 million in Q3’FY 2020
•Growth of 34.8% Y/Y
•Gross profit of $46.1 million
•vs. $32.8 million in Q3’FY 2020
•Growth of 40.6% Y/Y
•Gross margin of 72.8%
•vs. 69.8% in Q3’FY 2020
•300 basis points of expansion Y/Y
•GAAP net loss of $14.7 million
•vs. $11.0 million loss in Q3’FY 2020
•Adjusted EBITDA loss of $7.8 million
•vs. $7.5 million loss in Q3’FY 2020
•Adjusted EBITDA margin loss of 12.4%
•vs. loss of 15.9% in Q3’FY 2020
•Cash, cash equivalents, restricted cash and short-term marketable securities were $266.9 million at the quarter end
•Total quarter Active Buyers of 1.439 million
•vs. 1.257 million in Q3’FY 2020
•An increase of 14.4% Y/Y
•Total Orders of 1.300 million
•vs. 1.012 million in Q3’FY 2020
•An increase of 28.4% Y/Y
Conference Call and Webcast
•The live call is accessible in the U.S and Canada at +1 800-353-6461 (code 3975322) and outside of the U.S. and Canada at +1 334-323-0501 (code 3975322)
•The live and archived webcast and all related earnings materials will be available at thredUP’s investor relations website: ir.thredup.com
Financial Outlook
(includes the acquisition of Remix)
For fourth quarter 2021, thredUP expects:
•Revenue in the range of $69 million to $71 million
•Gross margin in the range of 65% to 67%
•An adjusted EBITDA margin loss in the range of 17.0% to 15.0%
•Depreciation and amortization of approximately $2.7 million
•Stock-based compensation of approximately $3.0 million
•Weighted-average shares of approximately 98.1 million
For fiscal year 2021, thredUP expects:
•Revenue in the range of $248 million to $250 million
•Gross margin of approximately 71%
•An adjusted EBITDA margin loss of approximately 15%
•Depreciation and amortization of approximately $8.9 million
•Stock-based compensation of approximately $12.4 million
•Weighted-average shares of approximately 77.1 million
ThredUp Inc.
Third Quarter 2021 Supplemental Financials
| ThredUp Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Income Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | September 30, 2019 | December 31, 2019 | March<br>31, 2020 | June <br>30, 2020 | September 30, 2020 | December 31, 2020 | March <br>31, 2021 | June <br>30, 2021 | September <br>30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consignment revenue | $ | 27,338 | $ | 32,026 | $ | 35,314 | $ | 34,914 | $ | 33,657 | $ | 34,211 | $ | 44,688 | $ | 48,597 | $ | 48,071 | |||||||||||||||||||||||||||||||||||
| Product revenue | 18,612 | 12,611 | 13,001 | 12,421 | 13,275 | 9,222 | 10,992 | 11,362 | 15,203 | ||||||||||||||||||||||||||||||||||||||||||||
| Total revenue | 45,950 | 44,637 | 48,315 | 47,335 | 46,932 | 43,433 | 55,680 | 59,959 | 63,274 | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of consignment revenue | 5,837 | 7,599 | 8,816 | 8,297 | 7,984 | 9,087 | 10,832 | 10,687 | 10,080 | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of product revenue | 7,579 | 5,660 | 6,873 | 6,027 | 6,172 | 4,611 | 5,130 | 5,140 | 7,100 | ||||||||||||||||||||||||||||||||||||||||||||
| Total cost of revenue | 13,416 | 13,259 | 15,689 | 14,324 | 14,156 | 13,698 | 15,962 | 15,827 | 17,180 | ||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 32,534 | 31,378 | 32,626 | 33,011 | 32,776 | 29,735 | 39,718 | 44,132 | 46,094 | ||||||||||||||||||||||||||||||||||||||||||||
| Gross margin % of revenue | 70.8 | % | 70.3 | % | 67.5 | % | 69.7 | % | 69.8 | % | 68.5 | % | 71.3 | % | 73.6 | % | 72.8 | % | |||||||||||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operations, product and technology | 20,831 | 25,580 | 25,475 | 22,149 | 25,856 | 27,928 | 28,312 | 31,062 | 32,081 | ||||||||||||||||||||||||||||||||||||||||||||
| Marketing | 13,557 | 12,674 | 13,001 | 10,898 | 10,614 | 10,252 | 15,446 | 15,957 | 16,941 | ||||||||||||||||||||||||||||||||||||||||||||
| Sales, general and administrative | 5,199 | 7,971 | 7,433 | 6,438 | 6,891 | 7,802 | 10,638 | 10,999 | 12,569 | ||||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 39,587 | 46,225 | 45,909 | 39,485 | 43,361 | 45,982 | 54,396 | 58,018 | 61,591 | ||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses % of revenue | 86.2 | % | 103.6 | % | 95.0 | % | 83.4 | % | 92.4 | % | 105.9 | % | 97.7 | % | 96.8 | % | 97.3 | % | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | (7,053) | (14,847) | (13,283) | (6,474) | (10,585) | (16,247) | (14,678) | (13,886) | (15,497) | ||||||||||||||||||||||||||||||||||||||||||||
| Operating loss % of revenue | (15.3) | % | (33.3) | % | (27.5) | % | (13.7) | % | (22.6) | % | (37.4) | % | (26.4) | % | (23.2) | % | (24.5) | % | |||||||||||||||||||||||||||||||||||
| Interest and other (expense) income, net | (191) | (94) | 68 | (183) | (419) | (698) | (1,466) | (480) | 799 | ||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before provision for income taxes | (7,244) | (14,941) | (13,215) | (6,657) | (11,004) | (16,945) | (16,144) | (14,366) | (14,698) | ||||||||||||||||||||||||||||||||||||||||||||
| Provision for (benefit from) income taxes | — | 36 | — | — | — | 56 | 27 | 13 | 17 | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (7,244) | $ | (14,977) | $ | (13,215) | $ | (6,657) | $ | (11,004) | $ | (17,001) | $ | (16,171) | $ | (14,379) | $ | (14,715) | |||||||||||||||||||||||||||||||||||
| Net income margin % | (15.8) | % | (33.6) | % | (27.4) | % | (14.1) | % | (23.4) | % | (39.1) | % | (29.0) | % | (24.0) | % | (23.3) | % | ThredUp Inc. | ||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||||||||||||||
| Adjusted EBITDA Reconciliation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | September 30, 2019 | December 31, 2019 | March<br>31, 2020 | June <br>30, 2020 | September 30, 2020 | December 31, 2020 | March <br>31, 2021 | June <br>30, 2021 | September <br>30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA reconciliation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (7,244) | $ | (14,977) | $ | (13,215) | $ | (6,657) | $ | (11,004) | $ | (17,001) | $ | (16,171) | $ | (14,379) | $ | (14,715) | |||||||||||||||||||||||||||||||||||
| Add (deduct): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1,044 | 1,090 | 1,245 | 1,198 | 1,425 | 1,713 | 2,038 | 1,861 | 2,248 | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 941 | 5,118 | 1,442 | 1,966 | 1,649 | 2,279 | 3,498 | 2,896 | 2,995 | ||||||||||||||||||||||||||||||||||||||||||||
| Acquisition and offering related expenses | — | — | — | — | — | — | — | — | 1,020 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 379 | 365 | 273 | 224 | 368 | 440 | 559 | 573 | 619 | ||||||||||||||||||||||||||||||||||||||||||||
| Change in value of preferred stock warrant | (3) | (3) | (172) | (1) | 89 | 285 | 930 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | — | 36 | — | — | — | 56 | 27 | 13 | 17 | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (4,883) | $ | (8,371) | $ | (10,427) | $ | (3,270) | $ | (7,473) | $ | (12,228) | $ | (9,119) | $ | (9,036) | $ | (7,816) | |||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin % | (10.6) | % | (18.8) | % | (21.6) | % | (6.9) | % | (15.9) | % | (28.2) | % | (16.4) | % | (15.1) | % | (12.4) | % |
ThredUp Inc.
Third Quarter 2021 Supplemental Financials (continued)
| ThredUp Inc. | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | September 30, 2019 | December 31, 2019 | March<br>31, 2020 | June <br>30, 2020 | September 30, 2020 | December 31, 2020 | March <br>31, 2021 | June <br>30, 2021 | September <br>30, 2021 | ||||||||||||||||||||||||||||||||||||
| Operations, product and technology | $ | 20,831 | $ | 25,580 | $ | 25,475 | $ | 22,149 | $ | 25,856 | $ | 27,928 | $ | 28,312 | $ | 31,062 | $ | 32,081 | |||||||||||||||||||||||||||
| Marketing | 13,557 | 12,674 | 13,001 | 10,898 | 10,614 | 10,252 | 15,446 | 15,957 | 16,941 | ||||||||||||||||||||||||||||||||||||
| Sales, general and administrative | 5,199 | 7,971 | 7,433 | 6,438 | 6,891 | 7,802 | 10,638 | 10,999 | 12,569 | ||||||||||||||||||||||||||||||||||||
| Total operating expenses | 39,587 | 46,225 | 45,909 | 39,485 | 43,361 | 45,982 | 54,396 | 58,018 | 61,591 | ||||||||||||||||||||||||||||||||||||
| Less: Total stock based compensation | 941 | 5,118 | 1,442 | 1,966 | 1,649 | 2,279 | 3,498 | 2,896 | 2,995 | ||||||||||||||||||||||||||||||||||||
| Total non-GAAP operating expenses | $ | 38,646 | $ | 41,107 | $ | 44,467 | $ | 37,519 | $ | 41,712 | $ | 43,703 | $ | 50,898 | $ | 55,122 | $ | 58,596 | |||||||||||||||||||||||||||
| Non-GAAP operating expenses as a % of revenue | 84.1 | % | 92.1 | % | 92.0 | % | 79.3 | % | 88.9 | % | 100.6 | % | 91.4 | % | 91.9 | % | 92.6 | % | ThredUp Inc. | ||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||||||||||||||
| Stock Based Compensation Details | |||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | September 30, 2019 | December 31, 2019 | March<br>31, 2020 | June <br>30, 2020 | September 30, 2020 | December 31, 2020 | March <br>31, 2021 | June <br>30, 2021 | September <br>30, 2021 | ||||||||||||||||||||||||||||||||||||
| Stock Based Compensation | |||||||||||||||||||||||||||||||||||||||||||||
| Operations, product and technology | $ | 486 | $ | 2,479 | $ | 715 | $ | 870 | $ | 987 | $ | 1,167 | $ | 1,350 | $ | 984 | $ | 1,024 | |||||||||||||||||||||||||||
| Marketing | 142 | 687 | 174 | 283 | 278 | 332 | 437 | 289 | 341 | ||||||||||||||||||||||||||||||||||||
| Sales, general and administrative | 313 | 1,952 | 553 | 813 | 384 | 780 | 1,711 | 1,623 | 1,630 | ||||||||||||||||||||||||||||||||||||
| Total | $ | 941 | $ | 5,118 | $ | 1,442 | $ | 1,966 | $ | 1,649 | $ | 2,279 | $ | 3,498 | $ | 2,896 | $ | 2,995 |
ThredUp Inc.
Third Quarter 2021 Supplemental Financials (continued)
| ThredUp Inc. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Balance Sheets | ||||||||||
| (in thousands, unaudited) | ||||||||||
| September 30, 2020 | December 31, 2020 | March <br>31, 2021 | June <br>30, 2021 | September <br>30, 2021 | ||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 78,760 | $ | 64,485 | $ | 246,514 | $ | 173,058 | $ | 160,912 |
| Marketable securities | — | — | — | 57,382 | 100,762 | |||||
| Accounts receivable, net | 1,020 | 1,823 | 1,726 | 1,545 | 1,895 | |||||
| Inventory, net | 3,862 | 3,519 | 3,482 | 4,362 | 4,106 | |||||
| Other current assets | 4,257 | 5,332 | 3,168 | 6,425 | 7,773 | |||||
| Total current assets | 87,899 | 75,159 | 254,890 | 242,772 | 275,448 | |||||
| Operating lease right-of-use assets | 24,808 | 23,656 | 22,338 | 21,272 | 20,455 | |||||
| Property and equipment, net | 37,900 | 41,131 | 43,562 | 45,490 | 49,451 | |||||
| Other assets | 3,144 | 2,965 | 2,980 | 2,837 | 4,864 | |||||
| Total assets | $ | 153,751 | $ | 142,911 | $ | 323,770 | $ | 312,371 | $ | 350,218 |
| Liabilities and Stockholder's Equity | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | 11,893 | $ | 9,386 | $ | 14,540 | $ | 11,359 | $ | 8,407 |
| Accrued and other current liabilities | 30,883 | 32,541 | 37,720 | 39,515 | 46,427 | |||||
| Seller payable | 13,340 | 13,724 | 15,194 | 16,709 | 18,306 | |||||
| Operating lease liabilities, current | 3,838 | 3,643 | 3,095 | 2,845 | 2,757 | |||||
| Current portion of long-term debt | 1,318 | 3,270 | 5,736 | 7,746 | 7,757 | |||||
| Total current liabilities | 61,272 | 62,564 | 76,285 | 78,174 | 83,654 | |||||
| Operating lease liabilities, non-current | 22,352 | 21,574 | 20,811 | 20,029 | 19,225 | |||||
| Long-term debt | 28,217 | 31,190 | 33,320 | 31,393 | 29,478 | |||||
| Non-current liabilities | 2,684 | 2,719 | 1,927 | 1,937 | 2,187 | |||||
| Total liabilities | 114,525 | 118,047 | 132,343 | 131,533 | 134,544 | |||||
| Convertible preferred stock | 247,041 | 247,041 | — | — | — | |||||
| Common stock | 1 | 1 | 9 | 9 | 10 | |||||
| Additional paid in capital | 27,350 | 29,989 | 459,756 | 463,582 | 513,124 | |||||
| Accumulated other comprehensive loss | — | — | — | (36) | (28) | |||||
| Accumulated deficit | (235,166) | (252,167) | (268,338) | (282,717) | (297,432) | |||||
| Total stockholder's (deficit) equity | (207,815) | (222,177) | 191,427 | 180,838 | 215,674 | |||||
| Total liabilities and stockholder's equity | $ | 153,751 | $ | 142,911 | $ | 323,770 | $ | 312,371 | $ | 350,218 |
ThredUp Inc.
Third Quarter 2021 Supplemental Financials (continued)
| ThredUp Inc. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Cash Flows | ||||||||||
| (in thousands, unaudited) | ||||||||||
| Three Months Ended | September 30, 2020 | December 31, 2020 | March <br>31, 2021 | June <br>30, 2021 | September <br>30, 2021 | |||||
| Cash flows from operating activities | ||||||||||
| Net loss | $ | (11,004) | $ | (17,001) | $ | (16,171) | $ | (14,379) | $ | (14,715) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||
| Depreciation and amortization | 1,425 | 1,713 | 2,038 | 1,861 | 2,248 | |||||
| Stock-based compensation expense | 1,649 | 2,279 | 3,498 | 2,896 | 2,995 | |||||
| Reduction of the carrying amount of right-of-use assets | 1,017 | 1,152 | 1,318 | 1,066 | 817 | |||||
| Changes in fair value of convertible preferred stock warrants and others | 173 | 395 | 1,048 | 131 | 589 | |||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable, net | 1,158 | (803) | 97 | 181 | (350) | |||||
| Inventory, net | (534) | 343 | 37 | (880) | 256 | |||||
| Other current and non-current assets | (312) | 208 | (457) | (2,907) | (1,356) | |||||
| Accounts payable | (332) | (2,560) | 4,722 | (2,006) | (2,142) | |||||
| Accrued and other current liabilities | 2,340 | 930 | 4,784 | 3,387 | 5,911 | |||||
| Seller payable | 955 | 384 | 1,470 | 1,515 | 1,597 | |||||
| Operating lease liabilities | (872) | (973) | (1,311) | (1,032) | (892) | |||||
| Other non-current liabilities | 941 | (309) | 4 | — | — | |||||
| Net cash (used in) provided by operating activities | (3,396) | (14,242) | 1,077 | (10,167) | (5,042) | |||||
| Cash flows from investing activities | ||||||||||
| Purchases of marketable securities | — | — | — | (57,418) | (45,297) | |||||
| Purchase of property and equipment | (3,664) | (5,065) | (4,099) | (4,900) | (6,208) | |||||
| Maturities of marketable securities | — | — | — | — | 1,600 | |||||
| Net cash used in investing activity | (3,664) | (5,065) | (4,099) | (62,318) | (49,905) | |||||
| Cash flows from financing activities | ||||||||||
| Proceeds from debt issuances, net of issuance costs | 5,000 | 4,925 | 4,625 | — | — | |||||
| Repayment of debt | — | — | — | — | (2,000) | |||||
| Proceeds from issuance of Class A common stock upon initial public offering and the follow-on offering, net of underwriting discounts and commissions | — | — | 180,284 | — | 46,621 | |||||
| Proceeds from exercise of common stock options and withholding taxes for the net share settlement of RSU’s | 1,568 | 360 | 1,875 | 930 | 948 | |||||
| Payment of costs for the initial public offering and follow-on | (570) | (466) | (1,733) | (1,900) | (618) | |||||
| Net cash (used in) provided by financing activities | 5,998 | 4,819 | 185,051 | (970) | 44,951 | |||||
| Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | (1,062) | (14,488) | 182,029 | (73,455) | (9,996) | |||||
| Cash, cash equivalents and restricted cash and cash equivalents | ||||||||||
| Beginning of period | 83,089 | 82,027 | 67,539 | 249,568 | 176,113 | |||||
| End of period | $ | 82,027 | $ | 67,539 | $ | 249,568 | $ | 176,113 | $ | 166,117 |
About ThredUp Inc.
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 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. In 2018, we expanded our platform with thredUP's Resale-As-A-Service (RaaSⓇ), which facilitates modern resale for a number of the world's leading brands and retailers. 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 financial supplement 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 financial supplement include, but are not limited to, guidance on financial results for the fourth quarter and full year of 2021; 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 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 or investments; 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 presentation are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations'' in the final prospectus for our initial public offering filed on March 26, 2021 and in our most recent Quarterly Reports on Form 10-Q. The forward-looking statements in this presentation 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 presentation.
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 presentation contains non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin and non-GAAP operating expenses. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA, Adjusted EBITDA margin and non-GAAP operating expenses, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA, Adjusted EBITDA margin and non-GAAP operating expenses 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, Adjusted EBITDA margin and non-GAAP operating expenses, 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. Adjusted EBITDA margin and non-GAAP operating expenses 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 a similarly-titled non-GAAP measure used by other companies.
A reconciliation is provided above for Adjusted EBITDA to net loss and non-GAAP operating expenses to total operating expenses, respectively, the most directly comparable financial measures 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, acquisition and offering related expenses, interest expense, change in fair value of convertible preferred stock warrant liability and provision for income taxes. We calculate non-GAAP operating expenses as total operating expenses less stock-based compensation expenses.
Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA to net loss and non-GAAP operating expenses to total operating expenses. 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 fourth quarter of 2021 and full year 2021, depreciation and amortization is expected to be $2.7 million and $8.9 million,
respectively. In addition, for the fourth quarter of 2021 and full year 2021, stock-based compensation expense is expected to be $3.0 million and $12.4 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.