TDUP — ThredUp Inc.

ThredUp Inc. (TDUP) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $81.7 million, up 14.6% year-over-year.
• Gross Margin: 79.2%, a slight increase of 10 basis points from the previous year.
• Adjusted EBITDA: $2.7 million, or 3.4% of revenue, down 190 basis points year-over-year.
• Net Loss: GAAP net loss of $6.5 million, compared to a loss of $5.2 million in Q1 2025.
• Active Buyers: 1.7 million, a 25% increase year-over-year.
• Orders: 1.6 million, up 19.3% from the previous year.

2. Strategic Updates and Business Highlights

• Customer Experience Enhancements: Introduction of an agentic product experience to personalize browsing and improve conversion rates. This includes aggregating product options on the same page.
• Marketing Efficiency: Increased spending on Meta (up 100% YoY) and Pinterest (up 94% YoY), while reducing Google ad spend, resulting in improved customer acquisition costs (CAC).
• Supply Growth: New seller kit requests surged 90% year-over-year, driven by TikTok Shop and targeted campaigns. Listings increased by 17% YoY.
• Resale-as-a-Service (RAAS): New partnerships with apparel brands and successful marketing campaigns during Earth Month.

3. Forward Guidance and Outlook

• Q2 2026 Revenue Guidance: Expected between $89 million to $91 million, reflecting 16% YoY growth.
• Full Year 2026 Revenue Guidance: Projected between $351.2 million to $356.2 million, indicating 14% YoY growth.
• Gross Margin Expectations: Maintained at 78.5% to 79.5% for both Q2 and the full year.
• Adjusted EBITDA: Expected to rise to approximately 5.2% of revenue in Q2 and 6.1% for the full year.

4. Bad News, Challenges, or Points of Concern

• Consumer Behavior: Notable increase in consumer selectivity due to high gas prices and persistent inflation, leading to a 3% decline in average selling prices (ASPs) and a 5% drop in conversion rates since early March.
• Profitability Pressure: Despite revenue growth, adjusted EBITDA margins declined, indicating challenges in balancing growth investments with profitability.
• Market Uncertainty: The macroeconomic environment remains unpredictable, which could impact future performance.

5. Notable Q&A Insights

• Consumer Selectivity: Management acknowledged the dual dynamics of strong buyer acquisition alongside declining ASPs and conversion rates, attributing these changes to macroeconomic factors.
• Supply Chain Dynamics: A significant influx of new sellers is expected to enhance supply, with management emphasizing the importance of onboarding and education for new sellers to maintain quality.
• Marketing Strategy: The shift in marketing spend from Google to Meta and Pinterest is seen as beneficial, with improved customer lifetime values (LTVs) from these channels.
• ASP Trends: Management indicated that the current ASP decline is likely to persist unless there are changes in the macroeconomic landscape, but they remain optimistic about maintaining strong unit economics.

Overall, ThredUp Inc. reported solid growth metrics in Q1 2026 while navigating challenges related to consumer behavior and profitability. The company remains focused on enhancing customer experience and expanding its seller base to drive future growth.