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, 2021.
“thredUP is pleased to share another strong quarter with a
further proofpoint of secondhand’s strength as evidenced by our
better-than-expected revenue growth. In addition, our
industry-leading infrastructure is reflected by our strong gross
margin trends,” said CEO and co-founder James Reinhart. “Beyond our
core marketplace growth, we announced thredUP's entrance into
Europe through the planned acquisition of Remix and further growth
of our RaaS® client base including the first white-label
resale shop created for Madewell. We also released thredUP's ninth
annual Resale Report, which revealed that the secondhand
opportunity is continuing to grow. We believe thredUP is
well-positioned to capture growth and fuel the rapidly emerging
resale ecosystem."
Second Quarter 2021 Financial
Highlights
-
Revenue: Total revenue was a record at $60
million, an increase of 26.7% year-over-year.
- Gross Profit and Gross
Margin: Gross profit totaled $44.1 million representing
growth of 33.7% year-over-year. Gross margin expanded to 73.6% from
69.7% in the comparable quarter last year.
- Net Loss: GAAP net
loss was $14.4 million, or 24% of revenue, for the second quarter
2021, compared to a GAAP net loss of $6.7 million, or 14.1% of
revenue, for the second quarter 2020.
- Adjusted EBITDA and EBITDA
Margin: The Adjusted EBITDA loss was $9 million, or 15.1%
of revenue, for the second quarter 2021, compared to the Adjusted
EBITDA loss of $3.3 million, or 6.9% of revenue, for the second
quarter 2020.
- Active
Buyers and Orders: Active Buyers of 1.34 million and
Orders of 1.22 million grew 8% and 22%, respectively, over the
comparable quarter last year.
Recent Business Highlights
- International Expansion: thredUP intends to
expand its footprint into Europe with the planned acquisition of
Remix, and the transaction is expected to close in the fourth
quarter of 2021.
- Resale Report: In June, thredUP released its
comprehensive and frequently-cited industry report, the 2021 Resale
Report. The ninth annual edition found that the secondhand market
is projected to more than double from $36 billion in 2021 to $77
billion in 2025. The report also includes a new thredUP Impact
Section detailing thredUP’s significant progress and commitments to
ESG.
- RaaS® Deals: Most
recently, thredUP announced RaaS® agreements with Madewell,
Farfetch, LG, Fabletics, and Vera Bradley. These new
RaaS® deals underscore thredUP's ability to deliver resale at
scale for high-profile brands and signal that companies across
industries are participating in the apparel resale economy.
-
Follow-On Offering: On August 2, we closed a
follow-on offering consisting of shares sold by thredUP and certain
selling stockholders. Net proceeds from the shares sold by thredUP
are expected to be used for working capital and general corporate
purposes.
Financial Outlook
Third quarter 2021 and fiscal year 2021 guidance
is not pro-forma for the acquisition of Remix. The Remix
acquisition is expected to close during the fourth quarter of 2021
and is subject to closing conditions.
For the third quarter 2021, thredUP expects:
- Revenue in the
range of $60 million to $62 million
- Gross margin in the range of 71.5%
to 72.5%
- Adjusted EBITDA
margin loss in the range of 19% to 17%
For fiscal year 2021, thredUP expects:
- Revenue in the
range of $236 million to $241 million
- Gross margin in the range of 71.5%
to 72.5%
- Adjusted EBITDA
margin loss in the range of 16% to 14.5%
Conference Call and Webcast
- Conference
Call: The live call is accessible in the U.S. and Canada
at +1 800-437-2398 (code 2633061) and outside of the U.S. and
Canada at +1 323-289-6576 (code 2633061).
-
Webcast: The live and archived webcast and all
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 extended 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 third
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 expectations
regarding the timing, consideration, terms and benefits of the
acquisition of Remix; 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,
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 third quarter of 2021 and full year 2021
depreciation and amortization is expected to be $1.9 million and
$7.7 million, respectively. In addition, for the third quarter of
2021 and full year 2021 stock-based compensation expense is
expected to be $2.9 million and $12.3 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)
| |
June 30, |
|
December 31, |
| |
2021 |
|
2020 |
| |
|
|
|
| Assets |
|
|
|
| Current assets |
|
|
|
|
Cash and cash
equivalents |
$ |
173,058 |
|
|
$ |
64,485 |
|
|
Marketable
securities |
57,382 |
|
|
— |
|
|
Accounts receivable,
net |
1,545 |
|
|
1,823 |
|
|
Inventory, net |
4,362 |
|
|
3,519 |
|
|
Other current
assets |
6,425 |
|
|
5,332 |
|
|
Total current
assets |
242,772 |
|
|
75,159 |
|
| Operating lease right-of-use
assets |
21,272 |
|
|
23,656 |
|
| Property and equipment,
net |
45,490 |
|
|
41,131 |
|
| Other
assets |
2,837 |
|
|
2,965 |
|
|
Total assets |
$ |
312,371 |
|
|
$ |
142,911 |
|
|
Liabilities, Convertible Preferred Stock and Stockholders’
Equity |
| Current liabilities |
|
|
|
|
Accounts
payable |
$ |
11,359 |
|
|
$ |
9,386 |
|
|
Accrued and other current
liabilities |
39,515 |
|
|
32,541 |
|
|
Seller payable |
16,709 |
|
|
13,724 |
|
|
Operating lease liabilities,
current |
2,845 |
|
|
3,643 |
|
|
Current portion of long-term
debt |
7,746 |
|
|
3,270 |
|
|
Total current
liabilities |
78,174 |
|
|
62,564 |
|
| Operating lease liabilities,
non-current |
20,029 |
|
|
21,574 |
|
| Long-term
debt |
31,393 |
|
|
31,190 |
|
| Other non-current
liabilities |
1,937 |
|
|
2,719 |
|
|
Total
liabilities |
131,533 |
|
|
118,047 |
|
| Convertible preferred
stock |
— |
|
|
247,041 |
|
| Stockholders’ equity: |
|
|
|
|
Common stock |
9 |
|
|
1 |
|
|
Additional paid-in
capital |
463,582 |
|
|
29,989 |
|
|
Accumulated other comprehensive
loss |
(36 |
) |
|
— |
|
|
Accumulated
deficit |
(282,717 |
) |
|
(252,167 |
) |
|
Total stockholders’ equity
(deficit) |
180,838 |
|
|
(222,177 |
) |
|
Total liabilities, convertible preferred stock and stockholders’
equity |
$ |
312,371 |
|
|
$ |
142,911 |
|
ThredUp Inc.Condensed
Consolidated Statements of Operations(in
thousands, except share and per share
data)(unaudited)
| |
Three months ended June 30, |
|
Six months ended June 30, |
| |
2021 |
|
2020 |
|
2021 |
|
2020 |
| Revenue: |
|
|
|
|
|
|
|
|
Consignment |
$ |
48,597 |
|
|
$ |
34,914 |
|
|
$ |
93,285 |
|
|
$ |
70,228 |
|
|
Product |
11,362 |
|
|
12,421 |
|
|
22,354 |
|
|
25,422 |
|
|
Total revenue |
59,959 |
|
|
47,335 |
|
|
115,639 |
|
|
95,650 |
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
Consignment |
10,687 |
|
|
8,297 |
|
|
21,519 |
|
|
17,113 |
|
|
Product |
5,140 |
|
|
6,027 |
|
|
10,270 |
|
|
12,900 |
|
|
Total cost of revenue |
15,827 |
|
|
14,324 |
|
|
31,789 |
|
|
30,013 |
|
|
Gross profit |
44,132 |
|
|
33,011 |
|
|
83,850 |
|
|
65,637 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
Operations, product and technology |
31,062 |
|
|
22,149 |
|
|
59,374 |
|
|
47,624 |
|
|
Marketing |
15,957 |
|
|
10,898 |
|
|
31,403 |
|
|
23,899 |
|
|
Sales, general and administrative |
10,999 |
|
|
6,438 |
|
|
21,637 |
|
|
13,871 |
|
|
Total operating expenses |
58,018 |
|
|
39,485 |
|
|
112,414 |
|
|
85,394 |
|
|
Operating loss |
(13,886 |
) |
|
(6,474 |
) |
|
(28,564 |
) |
|
(19,757 |
) |
| Interest and other (expense)
income, net |
(480 |
) |
|
(183 |
) |
|
(1,946 |
) |
|
(115 |
) |
|
Loss before provision for income taxes |
(14,366 |
) |
|
(6,657 |
) |
|
(30,510 |
) |
|
(19,872 |
) |
| Provision for income
taxes |
13 |
|
|
— |
|
|
40 |
|
|
— |
|
|
Net loss |
$ |
(14,379 |
) |
|
$ |
(6,657 |
) |
|
$ |
(30,550 |
) |
|
$ |
(19,872 |
) |
| Net loss per share
attributable to commonstockholders, basic and diluted |
$ |
(0.15 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.54 |
) |
|
$ |
(1.84 |
) |
| Weighted-average shares used
in computing net lossper share attributable to common stockholders,
basicand diluted |
94,434,768 |
|
|
10,852,462 |
|
|
56,777,147 |
|
|
10,807,848 |
|
ThredUp Inc.Condensed
Consolidated Statements of Cash Flows(in
thousands)(unaudited)
| |
Six months ended June 30, |
| |
2021 |
|
2020 |
| Cash flows from
operating activities |
|
|
|
| Net loss |
$ |
(30,550 |
) |
|
$ |
(19,872 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
3,899 |
|
|
2,443 |
|
|
Stock-based compensation expense |
6,394 |
|
|
3,408 |
|
|
Reduction in the carrying amount of right-of-use assets |
2,384 |
|
|
1,865 |
|
|
Changes in fair value of convertible preferred stock warrants and
others |
1,179 |
|
|
(7 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable, net |
278 |
|
|
(126 |
) |
|
Inventory, net |
(843 |
) |
|
565 |
|
|
Other current and non-current assets |
(3,364 |
) |
|
136 |
|
|
Accounts payable |
2,716 |
|
|
6,361 |
|
|
Accrued and other current liabilities |
8,171 |
|
|
1,912 |
|
|
Seller payable |
2,985 |
|
|
3,068 |
|
|
Operating lease liabilities |
(2,343 |
) |
|
(1,979 |
) |
|
Other non-current liabilities |
4 |
|
|
759 |
|
|
Net cash used in operating activities |
(9,090 |
) |
|
(1,467 |
) |
| Cash flows from
investing activities |
|
|
|
|
Purchases of marketable securities |
(57,418 |
) |
|
— |
|
|
Purchase of property and equipment |
(8,999 |
) |
|
(10,695 |
) |
|
Net cash used in investing activities |
(66,417 |
) |
|
(10,695 |
) |
| Cash flows from
financing activities |
|
|
|
|
Proceeds from debt issuance, net of issuance costs |
4,625 |
|
|
8,427 |
|
|
Repayment of debt |
— |
|
|
(1,190 |
) |
|
Proceeds from issuance of Class A common stock upon initial public
offering, net of underwriting discounts and commissions |
180,284 |
|
|
— |
|
|
Proceeds from exercise of common stock options and withholding
taxes for the net share settlement of restricted stock
units |
2,805 |
|
|
242 |
|
|
Payment of costs for the initial public offering |
(3,633 |
) |
|
(81 |
) |
|
Net cash provided by financing activities |
184,081 |
|
|
7,398 |
|
|
Net increase (decrease) in cash, cash equivalents and restricted
cash and cash equivalents |
108,574 |
|
|
(4,764 |
) |
|
Cash, cash equivalents and restricted cash and cash
equivalents |
|
|
|
| Beginning of period |
67,539 |
|
|
87,853 |
|
| End of period |
$ |
176,113 |
|
|
$ |
83,089 |
|
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, |
| |
2021 |
|
2020 |
|
2021 |
|
2020 |
| Adjusted EBITDA
Reconciliation: |
|
|
|
|
|
|
|
|
Net loss |
$ |
(14,379 |
) |
|
|
$ |
(6,657 |
) |
|
|
$ |
(30,550 |
) |
|
|
$ |
(19,872 |
) |
|
|
Depreciation and amortization |
1,861 |
|
|
|
1,198 |
|
|
|
3,899 |
|
|
|
2,443 |
|
|
|
Stock-based compensation expense |
2,896 |
|
|
|
1,966 |
|
|
|
6,394 |
|
|
|
3,408 |
|
|
|
Interest expense |
573 |
|
|
|
224 |
|
|
|
1,132 |
|
|
|
497 |
|
|
|
Change in fair value of convertible preferred stock warrant
liability |
— |
|
|
|
(1 |
) |
|
|
930 |
|
|
|
(173 |
) |
|
|
Provision for income taxes |
13 |
|
|
|
— |
|
|
|
40 |
|
|
|
— |
|
|
| Adjusted EBITDA |
$ |
(9,036 |
) |
|
|
$ |
(3,270 |
) |
|
|
$ |
(18,155 |
) |
|
|
$ |
(13,697 |
) |
|
| Adjusted EBITDA margin % |
(15.1 |
) |
% |
|
(6.9 |
) |
% |
|
(15.7 |
) |
% |
|
(14.3 |
) |
% |
Mediamedia@thredup.com
Investorsir@thredup.com
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