Summary of TDUP Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 Revenue: $79.7 million, up 18.5% year-over-year.

Full Year Revenue: $310.8 million, representing 20% year-over-year growth.

Gross Margin: 79.6% for Q4, slightly down from the previous year; 79.4% for the full year.

Adjusted EBITDA: $2.9 million (3.7% of revenue) for Q4; $14 million (4.4% of revenue) for the full year.

Active Buyers: 1.7 million for the trailing 12 months, a 30% increase year-over-year.

New Buyer Acquisition: Increased by 57% year-over-year in Q4.

Free Cash Flow: Positive for the full year 2025, with $53.1 million in cash and securities at year-end.

2Strategic Updates and Business Highlights

ThredUp focused on a streamlined U.S. marketplace model, removing complexities from previous European operations.

Successful product innovations included premium listings and direct listings, which contributed significantly to supply growth.

Enhanced customer engagement through AI-driven tools aimed at improving shopping experiences and operational efficiencies.

The company executed a rebranding initiative to better position itself in the marketplace.

Launched a TikTok shop campaign that resulted in over 100,000 cleanout bags sold, with 97% of buyers being new to ThredUp.

3Forward Guidance and Outlook

Q1 2026 Guidance: Revenue expected between $79.5 million to $80.5 million, reflecting a 12% year-over-year growth at the midpoint; adjusted EBITDA around 3% of revenue.

Full Year 2026 Guidance: Revenue projected between $349 million to $355 million, indicating 13% year-over-year growth; adjusted EBITDA expected to be approximately 6% of revenue.

Anticipated seasonal revenue pattern with Q1 being the smallest quarter, followed by growth in Q2 and Q3.

4Bad News, Challenges, or Points of Concern

Gross margin declined slightly year-over-year, raising concerns about potential pressures on profitability.

The macroeconomic environment remains uncertain, with weak consumer sentiment and an affordability crisis affecting discretionary spending.

The company acknowledged potential headwinds from rising customer acquisition costs as they invest in marketing to maintain growth momentum.

The CEO expressed caution regarding consumer behavior and spending, indicating a need for a measured approach moving forward.

5Notable Q&A Insights

Management emphasized that the conservative Q1 guidance is not due to negative business trends but rather a cautious approach given macroeconomic uncertainties.

There was discussion about the expected sequential growth from Q1 to Q2, which aligns with historical patterns.

The company is focused on increasing long-term customer lifetime value (LTV) through enhanced product offerings and improved customer engagement strategies.

Insights on customer acquisition costs indicated a slight increase, but management remains optimistic about maintaining strong new buyer growth.

The importance of leveraging AI for operational efficiencies and customer satisfaction was highlighted as a key driver for future growth. Overall, ThredUp reported strong financial results and strategic initiatives in 2025 while navigating a challenging consumer landscape. The outlook for 2026 remains cautiously optimistic with a focus on sustainable growth and profitability.