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What changed in 1stdibs.com, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of 1stdibs.com, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+474 added−552 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in 1stdibs.com, Inc.'s 2024 10-K

474 paragraphs added · 552 removed · 372 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

78 edited+10 added−28 removed38 unchanged
Biggest changeOur 1stDibs Promise gives our buyers peace of mind with every purchase by providing the following features and commitments: • a community of thoroughly vetted sellers from around the world to ensure high-quality products; • confidence at checkout with multiple secure payment options and a comprehensive fraud protection and prevention program; • customer service support from dedicated specialists to answer questions, assist with orders, and stand ready to resolve any transaction or technical issues throughout the buying process; • worry-free cancellations within 24 hours; • the ability to work with both parties in the event a buyer receives an item that is different than described or has been damaged in transit to resolve the issue; • a Price-Match Guarantee to ensure that if a buyer finds a 1stDibs seller that has the same item for a lower price elsewhere, 1stDibs will match it; and • enablement of a seamless and transparent global end-to-end shipping, logistics and delivery experience focused on security and a high level of care.
Biggest changeOur 1stDibs Promise gives our buyers peace of mind with every purchase by providing the following features and commitments: • a Money-Back Guarantee if a purchased item is not as described, is damaged in transit, or does not arrive, a buyer can contact us within 7 days, or longer for Trade Buyers, for a full refund. • a community of sellers from around the world to ensure high-quality products; • confidence at checkout with multiple secure payment options and a comprehensive fraud protection and prevention program; • customer service support from dedicated specialists to answer questions, assist with orders, and stand ready to resolve any transaction or technical issues throughout the buying process; • worry-free cancellations within 24 hours; • a Price-Match Guarantee to ensure that if a buyer finds a 1stDibs seller that has the same item for a lower price elsewhere, 1stDibs will match it; and • enablement of a seamless and transparent global end-to-end shipping, logistics and delivery experience focused on security and a high level of care. 2 Value Proposition to Sellers • Demand Generation: As of December 31, 2024, we provided sellers access to a global base of approximately 7.0 million users in over 190 countries, who would otherwise largely be inaccessible in an offline market.
We do not focus on AOV or MOV as key metrics in evaluating our business given our priority to make unique, high-end design items across various price points available through our online marketplace.
We do not focus on AOV or MOV as key metrics in evaluating our business given our priority to make unique, high-end design items available across various price points through our online marketplace.
By disrupting the way these items are bought and sold, we are both expanding access to, and growing the market for, luxury design products. 1stDibs began over two decades ago with the vision of bringing the magic of the Paris flea market online by creating a listings site for top vintage and antique furniture sellers.
By disrupting the way these items are bought and sold, we are both expanding access to, and growing the market for, luxury design. 1stDibs began over two decades ago with the vision of bringing the magic of the Paris flea market online by creating a listings site for top vintage and antique furniture sellers.
We have developed policies and procedures designed to manage data security risks, including employment of technical security defenses and continual monitoring of servers and systems. Further, as part of our efforts to protect sensitive information, we rely on a variety of security measures, 7 including encryption and authentication technology licensed from third parties.
We have developed policies and procedures designed to manage data security risks, including employment of technical security defenses and continual monitoring of servers and systems. Further, as part of our efforts to protect sensitive information, we rely on a variety of security measures, including encryption and authentication technology licensed from third parties.
We have sold items on our online marketplace ranging from less than $100 to over $1 million, demonstrating that high-end luxury design products are attainable and within reach of the expanding buyer audience we are attracting to the market.
We have sold items on our online marketplace ranging from less than $100 to over $1 million, demonstrating that high-end luxury design items are attainable and within reach of the expanding buyer audience we are attracting to the market.
The ability to offer a convenient, seamless transaction experience, including on-platform communications and a wide range of payment solutions, such as credit card, PayPal, Apple Pay, Automated Clearing House (“ACH”), and wire further drives buyer conversion.
The ability to offer a convenient, seamless transaction experience, including on-platform communications and a wide range of payment solutions, such as credit card, PayPal, Apple Pay, Automated Clearing House (“ACH”), and wire transfer further drives buyer conversion.
Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to seller and buyer data. We undertake administrative and technical measures to protect our systems and the consumer data those systems process and store.
Some of our third-party service providers, such as identity verification and payment processing 6 providers, also regularly have access to seller and buyer data. We undertake administrative and technical measures to protect our systems and the consumer data those systems process and store.
We collect and store certain personally identifiable information provided by our sellers and buyers and other third parties with whom we transact business, such as names, email addresses, and the details of transactions.
We collect and store certain personally identifiable information provided by our sellers and buyers and other third parties with whom we transact, such as names, email addresses, and the details of transactions.
Our Market Opportunity We connect sellers and buyers in what has historically been a fragmented and highly localized global market for unique luxury design products. This market has generally operated offline, functioning mostly through independent galleries, boutiques, and auction houses, thereby restricting a seller’s potential buyer audience and limiting a buyer’s product selection.
Our Market Opportunity We connect sellers and buyers in what has historically been a fragmented and highly localized global market for unique luxury design items. This market has generally operated offline, functioning mostly through independent galleries, boutiques, and auction houses, thereby restricting a seller’s potential buyer audience and limiting a buyer’s product selection.
Our online marketplace seller stock value, the sum of the stock value of all available products listed on our online marketplace, was consistent year over year and exceeded $10.0 billion as of both December 31, 2023 and 2022. An individual listing’s stock value is calculated as the item’s current price multiplied by its quantity available for sale.
Our online marketplace seller stock value, the sum of the stock value of all available products listed on our online marketplace, was consistent year over year and exceeded $10.0 billion as of both December 31, 2024 and 2023. An individual listing’s stock value is calculated as the item’s current price multiplied by its quantity available for sale.
We believe that creating a digital presence and enabling access to buyers across the globe allows us to expand the addressable market for luxury sellers. Expanding a seller’s ability to share its story across various forms of media, including text, photographs, and videos, significantly increases buyer engagement and conversion.
We believe that creating a digital presence and enabling access to buyers across the globe allows us to expand the addressable market for luxury sellers. Expanding a seller’s ability to share their story across various forms of media, including text, photographs, and videos, significantly increases buyer engagement and conversion.
This database includes taxonomies, structured metadata, an expansive catalog of luxury brands and designers, and an extensive library of luxury design products, product attributes, and pricing data. Our highly sophisticated, purpose-built technology stack facilitates complex, multi-step online transactions and is extremely difficult to replicate.
This database includes taxonomies, structured metadata, an expansive catalog of luxury brands and designers, and an extensive library of luxury design items, product attributes, and pricing data. Our highly sophisticated, purpose-built technology stack facilitates complex, multi-step online transactions and is extremely difficult to replicate.
Competition We compete with a broad range of sellers of new and pre-owned luxury design products, including traditional brick-and-mortar entities, such as department stores, branded luxury goods stores, and specialty retailers, and entities providing access to more unique luxury goods, such as galleries, boutiques, and auction houses.
Competition We compete with a broad range of sellers of new and pre-owned luxury design items, including traditional brick-and-mortar entities, such as department stores, branded luxury goods stores, and specialty retailers, and entities providing access to more unique luxury goods, such as galleries, boutiques, and auction houses.
The percentage of Active Buyers who make more than one purchase in any given year has been generally consistent from year to year and comprised approximately 30% of total Active Buyers in each of the years ended December 31, 2023 and 2022.
The percentage of Active Buyers who make more than one purchase in any given year has been generally consistent from year to year and comprised approximately 30% of total Active Buyers in each of the years ended December 31, 2024 and 2023.
Our Growth Strategies Expand Our Buyer Base We are focused on continuing to grow our buyer base and believe we are still in the early stages of introducing a unique and growing supply of luxury design products to a much broader audience.
Our Growth Strategies Expand Our Buyer Base We are focused on continuing to grow our buyer base and believe we are still in the early stages of introducing a unique and growing supply of luxury design items to a much broader audience.
We use internal and external data to target, acquire, and retain qualified buyers through performance-based, data-driven marketing campaigns. Data Security and Protection We are committed to the security of the sellers and buyers who transact business on our online marketplace.
We use internal and external data to target, acquire, and retain qualified buyers through performance-based, data-driven marketing campaigns. Data Security and Protection We are committed to the security of the sellers and buyers who transact on our marketplace.
Specifically, transacting in unique luxury design products requires the ability for sellers and buyers to exchange messages, negotiate prices, arrange customized shipping support, and pay swiftly and securely through various payment methods.
Specifically, transacting in unique luxury design requires the ability for sellers and buyers to exchange 1 messages, negotiate prices, arrange customized shipping support, and pay swiftly and securely through various payment methods.
The quality of our initial seller base enabled us to build a reputation in the design industry as a trusted source for unique luxury design products. Since then, we have strengthened our brand and deepened our seller relationships. We launched our e-commerce platform in 2013 and transitioned to a full e-commerce marketplace model in 2016.
The quality of our initial seller base enabled us to build a reputation in the design industry as a trusted source for unique luxury design. Since then, we have strengthened our brand as well as deepened and broadened our seller relationships. We launched our e-commerce platform in 2013 and transitioned to a full e-commerce marketplace model in 2016.
Sellers also benefit from our proprietary algorithms and targeting technologies to connect with both consumers and Trade Buyers. • Listing & Pricing: We empower sellers with tools useful for them to control item pricing and item visibility on our online marketplace. Sellers can leverage our proprietary classification methodologies and structured data to 3 create listings tailored to their inventory.
Sellers also benefit from our proprietary algorithms and targeting technologies to connect with both Consumer and Trade Buyers. • Listing & Pricing: We empower sellers with tools useful for them to control item pricing and item visibility on our online marketplace. Sellers can leverage our proprietary classification methodologies and structured data to create listings tailored to their inventory.
For certain individual Consumers or Trade Buyer, respectively, we provide support at the individual level through our Private Client and Trade Services to provide a seamless buying process.
For certain individual Consumers or Trade Buyers, respectively, we provide support at the individual level through our Private Client and Trade Services to provide a seamless buying process.
We provide high-touch human support for Consumer and Trade Buyers through our customized Private Client and Trade teams, which further enhances the buying process. 4 • Curated Assortment: We are a highly sought after destination for unique, high-quality luxury design products.
We provide high-touch human support for Consumer and Trade Buyers through our customized Private Client and Trade teams, which further enhances the buying process. • Curated Assortment: We are a highly sought after destination for unique, high-quality luxury design items.
As sellers and buyers of luxury design products gain experience transacting online, we believe our combination of technology, service, and brand positions us to enable and grow this market by providing sellers and buyers the tools and access they need.
As sellers and buyers of luxury design gain experience transacting online, we believe our combination of technology, service, brand positions and demand generation enable us to grow this market by providing sellers and buyers the tools and access they need.
The percentage of our unique sellers based outside of the United States was 55% and 52% as of December 31, 2023 and December 31, 2022, respectively. • Buyer-Seller Communication : Given the unique inventory available on our online marketplace and the relatively high price points, buyers are likely to have questions regarding origin and item attributes.
The percentage of our unique sellers based outside of the United States was 53% and 55% as of December 31, 2024 and December 31, 2023, respectively. • Buyer-Seller Communication : Given the unique inventory available on our online marketplace and the relatively high price points, buyers are likely to have questions regarding origin and item attributes.
Our Active Buyers had 86 and 81 sessions and viewed 218 and 289 product pages, on average, during the years ended December 31, 2023 and December 31, 2022, respectively. We built 1stDibs to empower and inspire confidence in our sellers by using our proprietary technology to digitize and transform their businesses.
Our Active Buyers had 81 and 86 sessions and viewed 266 and 218 product pages, on average, during the years ended December 31, 2024 and December 31, 2023, respectively. We built 1stDibs to empower and inspire confidence in our sellers by using our proprietary technology to digitize and transform their businesses.
We aggregate supply from a large number of globally distributed sellers, offering buyers an online destination to access a variety of luxury products across the globe. As of December 31, 2023 and December 31, 2022, we had approximately 44% and 41% of our listings located outside the United States, respectively.
We aggregate supply from a large number of globally distributed sellers, offering buyers an online destination to access a variety of luxury products across the globe. As of December 31, 2024 and December 31, 2023, we had approximately 45% and 44% of our listings located outside the United States, respectively.
Once sellers are added to our online catalog, we help build sellers’ online presence through editorial and social placements, including our online magazine Introspective , which offers sellers additional avenues through which to advertise online. • Online Presence: We help sellers establish an online presence on our online marketplace.
Once sellers are added to our online catalog, we help build sellers’ online presence through editorial and social placements, including our online magazine Introspective , which offers sellers additional avenues through which to advertise online. • Digital Presence: We help sellers establish a digital presence on our online marketplace.
Highly experienced interior designers, whom we refer to as Trade Buyers, are frequent, repeat purchasers on our online marketplace and accounted for 31% and 32% of our on-platform GMV in the years ended December 31, 2023 and 2022, respectively.
Highly experienced interior designers, whom we refer to as Trade Buyers, are frequent, repeat purchasers on our online marketplace and accounted for 31% of our on-platform GMV in each of the years ended December 31, 2024 and 2023, respectively.
We provide buyers with design inspiration through our expertly merchandised collections and our online editorial publication Introspective . • Quality of Experience: Unlike conventional offline alternatives, we offer our buyers convenient 24/7 access to approximately 1.7 million luxury design products.
We provide buyers with design inspiration through our expertly merchandised collections and our online editorial publication Introspective . • Quality of Experience: Unlike conventional offline alternatives, we offer our buyers convenient 24/7 access to approximately 1.8 million listings.
Our buyer services include: • Largest Selection of Unique Luxury Design Products: We offer one of the largest online selection of luxury design products from leading sellers and makers of vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion.
Our buyer services include: 3 • Largest Selection of Unique Luxury Design Items: We offer one of the largest online selections of luxury design items from leading sellers and makers of vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on our investor relations website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
These offline operations create barriers to both new supply and new demand, limiting the market’s overall growth potential. We created a single online marketplace that consolidates previously fragmented sellers and buyers on a global scale.
These offline operations create barriers to both new supply and new demand, limiting the market’s overall growth potential. We created a single online marketplace that consolidates previously fragmented sellers and buyers globally.
As of December 31, 2023, 44% of the supply on our online marketplace comes from outside the United States, while only 20% of buyers are located internationally. We believe that this presents a large international 5 expansion opportunity.
As of December 31, 2024, 45% of the supply on our online marketplace comes from outside the United States, while only 20% of buyers are located internationally. We believe that this presents a large international expansion opportunity.
Grow Our Marketplace Supply We intend to further increase the supply on our online marketplace while maintaining our thorough seller vetting process, by offering a captivating value proposition and enhanced item listing tools, adding new inventory from existing sellers, and growing the range of sellers from whom we source.
Grow Our Marketplace Supply We intend to further increase the supply on our online marketplace by offering a captivating value proposition and enhanced item listing tools, adding new inventory from existing sellers, and growing the range of sellers from whom we source.
We believe our growing collection of approximately 1.7 million luxury design products is unmatched and makes us the premier destination for design lovers and enthusiasts. Luxury design products tend to retain value over time as a result of their scarcity and durability.
We believe our growing collection of approximately 1.8 million luxury design items is unmatched and makes us the premier destination for design lovers and enthusiasts. Luxury design tends to retain value over time as a result of their scarcity and durability.
Treasury Department’s Office of Foreign Assets Control. Further, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide sellers and buyers access to our platform or could limit our sellers’ and buyers’ ability to access or use our services in those countries.
Further, various countries regulate the import of certain technology and have enacted or could enact laws that limit our ability to provide sellers and buyers access to our platform or could limit our sellers’ and buyers’ ability to access or use our services in those countries.
We believe that we compete effectively based on the volume, quality, and assortment of unique luxury design products available on our online marketplace, our brand awareness and history built on trust and authenticity, the experience and value proposition we offer to sellers and buyers, and the scale of our online marketplace.
We believe that we compete effectively based on the volume, quality, and assortment of unique luxury design items available on our online marketplace, our brand awareness and history built on trust and authenticity, the experience and value proposition we offer to sellers and buyers, and the global scale of our online marketplace, including the effectiveness of our mobile app.
We had 6.3 million users and approximately 1.7 million listings as of December 31, 2023, compared to 5.5 million users and approximately 1.5 million listings as of December 31, 2022. Users represent non-seller visitors who register on our website, including both buyers and prospective buyers, and are identified by a unique email address.
We had 7.0 million users and approximately 1.8 million listings as of December 31, 2024, compared to 6.3 million users and approximately 1.7 million listings as of December 31, 2023. Users represent non-seller visitors who register on our website and include both buyers and prospective buyers identified by a unique email address.
During the year ended December 31, 2023, we had approximately 61,000 Active Buyers, compared to approximately 68,000 in the year ended December 31, 2022. We define Active Buyers as buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations.
During the year ended December 31, 2024, we had approximately 64,300 active buyers, compared to approximately 61,000 in the year ended December 31, 2023, who are buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations (“Active Buyers”).
New legislation or regulation or changes thereof due to federal elections, the application of laws from jurisdictions whose laws do not currently apply to our business, or the application of existing laws and regulations to the Internet and e-commerce generally could result in significant additional compliance costs and responsibilities for our business.
See Part I, Item IA, “Risk Factors—Regulatory, Compliance, and Legal Risks.” New legislation or regulation or changes thereof due to federal elections, the application of laws from jurisdictions whose laws do not currently apply to our business, or the application of existing laws and regulations to the internet and e-commerce generally could result in significant additional compliance costs and responsibilities for our business.
Of our 6.3 million users as of December 31, 2023, we estimate based on the available information provided by our users that approximately 66% are U.S.-based and 34% are international, which represents approximately 1% penetration of the U.S. population and less than 1% of the international population.
Of our 7.0 million users as of December 31, 2024, we estimate based on the available information provided by our users that approximately 64% are U.S.-based and 36% are international, which represents approximately 1% penetration of the U.S. population and less than 1% of the international population.
We intend to continue to evaluate such diversification opportunities as part of our overall growth strategy. Our platform infrastructure is designed to scale with growth and diversification in mind. Expand Internationally During the year ended December 31, 2023, the vast majority of our buyers were located in the United States and other English-speaking countries.
Our platform infrastructure is designed to scale with growth and diversification in mind. Expand Internationally During the year ended December 31, 2024, the vast majority of our buyers were located in the United States and other English-speaking countries.
See Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements for further discussion of our operating and reportable segment. Regulatory Our business is subject to foreign and domestic laws and regulations applicable to companies conducting business on the Internet and in the resale market.
See Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements for further discussion of our operating and reportable segment. Regulatory Our business is subject to a growing number of local, national, and international laws and regulations, which are applicable to any company conducting business on the internet and in the resale market.
During the year ended December 31, 2023, we estimate that approximately 76% of new user sessions came from non-paid channels, including organic search, direct web, direct app, organic social, email, and referral compared to 71% during the year ended December 31, 2022.
We derive a relatively low percentage of our traffic and orders from paid media. During the year ended December 31, 2024, we estimate that approximately 69% of new user sessions came from non-paid channels, including organic search, direct web, direct app, organic social, email, and referral compared to 76% during the year ended December 31, 2023.
Our platform turns this complex order flow into an easy-to-use process and converts the valuable data we collect from buyers’ browsing and purchase activity into actionable insights for both sellers and buyers. Our platform is scalable, which we believe enables us to efficiently drive expansion into new geographies and verticals while supporting the creation and development of new applications.
Our platform turns this complex order flow into an easy-to-use process and converts the valuable data we collect from buyers’ browsing and purchase activity into actionable insights for both sellers and buyers. Our platform is scalable, which we believe enables us to grow over time.
Our thorough seller vetting process inspires buyer confidence in our sellers and in the quality of the luxury design products sold on 1stDibs. Extensive fraud protection and secure payment solutions further establish the trust sellers and buyers have in our online marketplace.
Our seller onboarding process which includes our in-house experts evaluating the integrity of sellers’ listings inspires buyer confidence in our sellers and in the quality of the luxury design items sold on 1stDibs. Extensive fraud protection and secure payment solutions further establish the trust sellers and buyers have in our online marketplace.
Intellectual Property We rely on a combination of intellectual property rights, contractual protections, and other practices to protect our brand, proprietary information, technologies and processes. We primarily rely on copyright and trade secret laws to protect our proprietary technologies, and processes, including the algorithms we use throughout our business.
Intellectual Property We rely on a combination of intellectual property rights, contractual protections, and other practices to protect our brand, proprietary information, technologies and processes.
We have created a pricing index, “1stDibs Insider,” which provides pricing guidance to our sellers based on historical pricing trends. By providing historical pricing data for similar items that have recently sold, we believe this helps sellers price items more competitively. On our platform, sellers can set item pricing based on user type (Consumer vs.
We have created a pricing index, “1stDibs Insider,” which provides pricing guidance to our sellers based on historical pricing trends. By providing historical pricing data for similar items that have recently sold, we believe this helps sellers price items more competitively. We have also invested in artificial intelligence and machine learning to help our sellers with pricing guidance.
Trade) or a specific user (Private Listing). We also provide sellers purchase format flexibility beyond the standard list price model. Sellers can choose to list items without price using the “Price Upon Request” purchasing format, or allow buyers to bid on their favorite items with 1stDibs Auctions.
On our platform, sellers can set item pricing based on user type (Consumer vs. Trade) or a specific user (Private Listing). We also provide sellers purchase format flexibility beyond the standard list price model. Sellers can choose to list items without a price using the “Price Upon Request” purchasing format.
Our Employees, Culture, Values and Human Capital Resources As of December 31, 2023, we had 237 full-time employees, including 56 in technology development, 55 in sales and marketing, 38 in general and administrative, and 88 in operations.
Human Capital Resources As of December 31, 2024, we had 284 full-time employees, including 104 in technology development, 78 in sales and marketing, 38 in general and administrative, and 64 in operations.
Our human capital resources objective is to ensure that we have the best possible team to reach our business goals, and that the team we have has a positive employee experience.
Our human capital resources objective is to ensure that we have the best possible team to reach our business goals, and that the team has a positive employee experience. We do this through striving to attract and hire the best talent and developing our team in ways that contribute to their personal and business growth.
We review all applications from these efforts, tier them according to desirability based on their inventory quality and “salability” onsite, and then invite the approved sellers to join our online marketplace. Environmental, Social, and Governance (“ESG”) Our business creates a positive environmental and economic impact, balancing the needs of our buyers, sellers, partners, employees, investors and the environment.
We review all applications from these efforts, tier them according to desirability based on their inventory quality and “salability” onsite, and then invite the approved sellers to join our online marketplace.
We have developed tools to facilitate communication between sellers and buyers and have added incentives for sellers to respond quickly. The majority of our sellers respond to inquiries in less than two hours.
We have developed tools to facilitate communication between sellers and buyers and have added incentives for sellers to respond quickly.
The bulk of our users are browsing via our mobile site. Our mobile app users take advantage of app-specific features, including local shopping, personalized notifications, and the ability to “see” items in their homes via our augmented reality feature.
The bulk of our users are browsing via our mobile site. Our mobile app users take advantage of app-specific features, personalized notifications, and the ability to “see” items in their homes via our augmented reality feature. • Personalization: We collect rich data around our users’ preferences, site engagement, item and seller attributes, buyers’ browsing patterns and purchase behaviors.
These laws and regulations generally prohibit companies, their employees, and their intermediaries from authorizing, offering, providing, and/or accepting improper payments or other benefits for improper purposes. Although we take precautions to prevent violations of these laws, our exposure for violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
Although we take precautions to prevent violations of these laws, our exposure for violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
Adding verticals has several benefits, including increasing our addressable market, the number of sellers and buyers, and purchasing frequency, and offering our buyers a wider supply of inventory while strengthening our brand as a preeminent online destination for luxury design products. We believe there are also opportunities to diversify our business model by expanding into additional sales formats.
Adding verticals has several benefits, including increasing our addressable market, the number of sellers and buyers, purchase frequency, and offering our buyers a wider supply of inventory while strengthening our brand as a preeminent online destination for luxury design items. We intend to continue to evaluate such diversification opportunities as part of our overall growth strategy.
We may also choose to expand our network of sellers inorganically, either through acquisitions of, or partnerships with, companies or design brands.
This value proposition drives sellers to our online marketplace, deepens the breadth of our inventory, and helps attract new buyers. We may also choose to expand our network of sellers inorganically, either through acquisitions of, or partnerships with, companies or design brands.
In addition to continued organic growth, we believe we can significantly increase our buyer base by utilizing targeted, data-driven marketing efforts that generate meaningful returns. We believe we can continue to expand our buyer audience across a wide swath of buyer demographics including income, geography, and age, as well as level of design experience and design preference.
We believe we can continue to 4 expand our buyer audience across a wide swath of buyer demographics including income, geography, and age, as well as level of design experience and design preference.
Negotiation is a common purchase format in our verticals; Buyers can negotiate via the “Make Offer” experience, and also receive a personalized “Private Offer” after initiating a conversation with a seller or “favoriting” an item.
Negotiation is a common purchase format in our verticals; Buyers can negotiate via the “Make Offer” experience, and also receive a personalized “Private Offer” after initiating a conversation with a seller or “favoriting” an item. • Mobile: During the year ended December 31, 2024, the majority of user sessions came to our online marketplace via a mobile device, either by browsing our mobile site or by using our highly rated mobile app.
We plan to continue to invest strategically in growth initiatives to be prepared if and when macroeconomic conditions improve. We had an on-platform average order value (“AOV”) of above $2,600 and $2,700, and a median order value (“MOV”) of approximately $1,200 and $1,300 in the years ended December 31, 2023 and 2022, respectively.
We had an on-platform average order value (“AOV”) of approximately $2,500 and $2,600 in the years ended December 31, 2024 and 2023, respectively. We had a median order value (“MOV”) of approximately $1,200 in both the years ended December 31, 2024 and 2023.
Marketing We acquire new buyers and drive traffic to our online marketplace through a mix of direct response marketing channels, with an emphasis on digital and a focus is on efficient growth. We derive a relatively low percentage of our traffic and orders from paid media.
Overall, investments in our platform are focused on maximizing traffic, increasing conversion rate, and improving the overall efficiency of our operations. Marketing We acquire new buyers and drive traffic to our online marketplace through a mix of direct response marketing channels, with an emphasis on digital and a focus is on efficient growth.
We operate an asset-light business model which allows us to scale in a capital efficient manner. While we enable shipping and fulfillment logistics, we do not take physical possession of the items sold on our online marketplace.
While we enable shipping and fulfillment logistics, we do not take physical possession of the items sold on our online marketplace.
We believe we are a leading online marketplace for these luxury design products based on the aggregate number of such listings on our online marketplace and our Gross Merchandise Value (“GMV”). Our thoroughly vetted seller base, in-depth marketing content, and custom-built technology platform create trust in our brand and facilitate high-consideration purchases of luxury design products online.
We believe we are a leading online marketplace for these luxury design items based on the aggregate number of listings on our online marketplace and our Gross Merchandise Value (“GMV”).
We believe our online marketplace, powered by our technology platform, has transformed almost all dimensions of the luxury design buying experience by increasing accessibility and enhancing selection and convenience. Global Luxury Market Our core market, including high-quality design furniture and homewares, fine art, watches and jewelry, was estimated to be approximately $198 billion in 2023, according to Bain & Company.
We believe our online marketplace, powered by our technology platform, has transformed almost all dimensions of the luxury design buying experience by increasing accessibility and enhancing selection and convenience.
We also hold the rights to the “1stDibs.com” Internet domain name and various related domain names, which are subject to Internet regulatory bodies and trademark and other related laws of each applicable jurisdiction. Although we do not currently have any issued patents, we may pursue patent protection for aspects of our technology in the future.
Our trademarks are valuable assets that support our brand and consumers’ perception of our services and merchandise. We also hold the rights to the “1stDibs.com” Internet domain name and various related domain names, which are subject to Internet regulatory bodies and trademark and other related laws of each applicable jurisdiction.
Once in motion, the flywheel effect of this network enhances both seller and buyer quality, which we believe produces a competitive advantage. 1 We are driving consumer demand for luxury design products online by providing global access to a traditionally fragmented, local, and offline market.
We are driving consumer demand for luxury design items online by providing global access to a traditionally fragmented, local, and offline market.
This differs from seller accounts, which counts a unique seller multiple times if that seller has sales in multiple verticals. We provide our sellers, the vast majority of which are small businesses, access to a global community of buyers and a platform to facilitate e-commerce at scale.
We discontinued the pricing option with no monthly subscription fees and higher commission rates during the year which contributed to the seller churn. We provide our sellers, the vast majority of which are small businesses, access to a global community of buyers and a platform to facilitate e-commerce at scale.
The uniqueness, diversity, and high quality of the products on our online marketplace, together with an active marketing effort, have produced a large global base of design-loving buyers. Our user-friendly interface, dedicated specialist support, and 1stDibs Promise enable a trusted purchase experience.
The uniqueness, diversity, and high quality of the items on our online marketplace, together with an active marketing effort, have produced a large global base of design-loving buyers. We operate an asset-light business model which allows us to scale in a capital efficient manner.
Disclosure Information In compliance with disclosure obligations under Regulation FD, 1stDibs announces material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, and webcasts, as well as the investor relations website. 9
The SEC also maintains a website that contains our SEC filings. The SEC website address is www.sec.gov. Disclosure Information We use our investor relations website to announce material nonpublic information to the public including filings with the SEC, press releases, public conference calls, and webcasts and for complying with our disclosure obligations under Regulation FD of the Exchange Act. 8
The 1stDibs Marketplace Trust Trust is at the core of the online marketplace that we have built over two decades of operating history. Trust in our online marketplace is critical to facilitating online transactions of purchases with high price points.
Additionally, we had 7.0 million users as of December 31, 2024, compared to 6.3 million users as of December 31, 2023. The 1stDibs Marketplace Trust Trust is at the core of the online marketplace that we have built over two decades of operating history.
We seek to protect our proprietary information, in part, by entering into confidentiality and proprietary rights agreements with our employees and independent contractors. Our employees are also subject to invention assignment agreements. See “Risk Factors—Risks Relating to Intellectual Property.” 8 Website Access to Company’s Reports Our website address is www.1stdibs.com.
See “Risk Factors—Risks Relating to Intellectual Property.” Website Access to Company’s Reports Our website address is www.1stdibs.com, and our investor relations website is www.investors.1stdibs.com.
We list luxury design products from numerous sellers located throughout the United States and from over 90 countries, and the items we list from our sellers may contain materials that are subject to regulation by international, federal, state, and local governments and other regulatory authorities.
We list luxury design items from numerous sellers located throughout the United States and from over 75 countries.
As of December 31, 2022, of our 5.5 million users, we estimated that approximately 67% were U.S.-based and 33% were international. As of December 31, 2023, 20% of buyers are located internationally, compared to 18% from December 31, 2022. To date, we have primarily grown our current buyer base organically through word-of-mouth, mentions in the press, and earned media.
As of December 31, 2023, we estimated that approximately 66% of our 6.3 million users were U.S.-based and 34% were international. Approximately 20% of our buyers are located internationally as of both December 31, 2024 and 2023.
Increasing Online Penetration One of the most significant trends driving online penetration in the luxury goods market is an increasingly digitally native customer base. Bain & Company estimates that online personal luxury goods purchases will continue to grow, reaching up to 30% of total sales by 2025.
Increasing Online Penetration One of the most significant trends driving online penetration in the luxury goods market is an increasingly digitally native customer base. We hosted approximately 1.8 million listings as of December 31, 2024, compared to approximately 1.7 million listings as of December 31, 2023.
During each of the years ended December 31, 2023 and 2022, over 20% of our on-platform GMV was generated from orders with an item value above $15,000 and approximately 5% and 4% for orders with an item value of $100,000 or more for the years ended December 31, 2023 and 2022, respectively.
Trust in our online marketplace is critical to facilitating online transactions of purchases with high price points. For the years ended December 31, 2024 and 2023, approximately 3% and 5% of orders had an item value of $100,000 or more, respectively.
In addition, numerous U.S. states and municipalities have regulations regarding the handling of antique and vintage items and licensing requirements of antique and vintage dealers. Our business activities are also subject to various restrictions under U.S. export and similar laws and regulations, as well as various economic and trade sanctions administered by the U.S.
As such, we need to comply with various laws and regulations associated with doing business outside of the United States, including regarding the handling of antique and vintage items and licensing requirements of antique and vintage dealers, export control laws, economic and trade sanctions, anti-money laundering laws, and anti-corruption laws.
Our website traffic also indicates strong international presence and opportunities for conversion, with approximately 43% of current traffic coming from outside the United States. In continuing to expand internationally, we plan to focus initially on organic search and later on performance-driven paid marketing and email campaigns. We may also expand internationally through acquisitions.
Our website traffic also indicates strong international presence and opportunities for conversion, with approximately 44% of current traffic coming from outside the United States. We had 53% and 55% of unique sellers and 45% and 44% of the supply on our online marketplace come from outside the United States in the years ended December 31, 2024, 5 and 2023, respectively.
We do this through attracting and hiring the best team, ensuring our policies and practices create an inclusive culture, and developing our team in ways that contribute to personal and business growth. We regularly receive input from our team members through employees surveys, focus groups, and events to gauge employee engagement and identify areas of focus.
We regularly receive input from our team members through employee surveys, feedback interviews, and events to gauge employee engagement and identify areas of focus. Our Technology and Data Technology powers all aspects of our business. Our proprietary services-based architecture is the foundation of our platform.
As of December 31, 2023, we had approximately 7,800 unique sellers, compared to approximately 5,600 unique sellers as of December 31, 2022. This metric was updated from the previously disclosed seller accounts metric as we believe unique sellers is a more useful measure of our seller base.
As of December 31, 2024, we had approximately 5,900 unique sellers, compared to approximately 7,800 unique sellers as of December 31, 2023. In 2024, we shifted our seller acquisition strategy and monetization approach to concentrate on fewer, but more highly engaged sellers.
Removed
Despite the growth on the seller side, we experienced year-over-year decreases in GMV, net revenue, and certain key buyer metrics as we believe they have been adversely impacted, both directly and indirectly, by macroeconomic factors, including significant capital market volatility, significant housing market volatility, rising interest rates, inflation, global economic and geopolitical developments, and changing consumer behavior in a post-COVID-19 environment; however, these impacts are difficult to isolate and quantify.
Added
Our sellers, who undergo an evaluation by our in-house experts to vet the integrity of their listings, in-depth marketing content, and custom-built technology platform create trust in our brand and facilitate high-consideration purchases of luxury design items online.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors that may cause fluctuations in our quarterly results of operations include, but are not limited to, the following: • fluctuations in net revenue generated from sales of luxury design products through our online marketplace; • our success in attracting sellers and buyers to, and retaining sellers and buyers on, our online marketplace, and our ability to do so in a cost-efficient manner; • our ability to attract users to our website and convert users to Active Buyers on our online marketplace; • the amount and timing of our operating expenses; • our ability to continue to source and make luxury design products available on our online marketplace; • the timing and success of new services, features, and offerings we introduce through our e-commerce platform, including our recently launched auction transaction format; • our ability to compete successfully; • our ability to increase brand awareness of our company and our online marketplace; • our ability to manage our existing business and future growth; • our ability to effectively scale our operations while maintaining high-quality service and seller and buyer satisfaction; 10 • the amount, timing, and results of our investments to maintain and improve our technology infrastructure and platform, and our ability to do so in a cost-effective manner; • our ability to increase and manage the growth of our international operations, including our international seller and buyer base, and our ability to manage the risks associated therewith; • changes in our key metrics or the methods used to calculate our key metrics; • seasonality, including seasonal buying patterns, which may vary from quarter to quarter or year to year; • changes in laws, regulations, or accounting principles that impact our business; • disruptions or defects in our e-commerce platform, such as service interruptions or privacy or data security breaches; • changes in the terms of our seller agreements; • our ability to hire and retain talented employees and professional contractors at all levels of our business; • the changing consumer behaviors as a result of the post COVID-19 pandemic or other events, such as geopolitical crises, which may cause significant economic or social disruption; • our ability to successfully manage previously-minted NFTs that remain available for sale and to anticipate and manage the risks associated therewith; and • economic and market conditions, particularly those affecting the luxury design products industry, such as fluctuations in inflation and interest rates or supply chain or global shipping disruptions.
Biggest changeFactors that may cause fluctuations in our quarterly results of operations, many of which are beyond our control, include, but are not limited to, the following: • fluctuations in net revenue generated from sales of luxury design items through our online marketplace; • our success in attracting and retaining sellers and buyers to and on our online marketplace, and our ability to do so in a cost-efficient manner; • our ability to attract users to our website and convert users to Active Buyers on our online marketplace; • Active Buyers with multiple unique email accounts that are undetected and in violation of our terms of service as we could be overestimating the number of Active Buyers; • the amount and timing of our operating expenses; • our ability to continue to source and provide available luxury design items on our online marketplace; • the timing and success of new services, features, and offerings we introduce through our e-commerce platform; • our ability to compete successfully; • our ability to increase brand awareness of our company and our online marketplace; • our ability to manage our existing business and future growth; • our ability to effectively scale our operations while maintaining high-quality service and seller and buyer satisfaction; 9 • the amount, timing, and results of our investments to maintain and improve our technology infrastructure and platform, and our ability to do so in a cost-effective manner; • our ability to increase and manage the growth of our international operations, including our international seller and buyer base, and our ability to manage the risks associated therewith; • changes in our key metrics or the methods used to calculate our key metrics; • more challenging comparisons to prior periods as our net revenue grows; • a decrease in the growth of our overall market or market saturation; • our failure to capitalize on growth opportunities; • seasonality, including seasonal buying patterns, which vary from quarter to quarter or year to year; • changes in laws, regulations, governmental policies, or accounting principles that impact our business, business partners or customers; • disruptions or defects in our e-commerce platform, such as service interruptions or privacy or data security breaches; • changes in the terms of our seller agreements; • our ability to hire and retain talented employees and professional contractors at all levels of our business; • the changing consumer behaviors and factors that affect consumer behaviors and spending, such as economic conditions, inflationary pressures, interest rates, discretionary spending patterns, employment levels, instability in the housing market, geopolitical crises, or significant economic or social disruption; and • economic and market conditions, particularly those affecting the luxury design items industry, such as fluctuations in inflation and interest rates or supply chain or global shipping disruptions.
Completed and future acquisitions may result in unforeseen operational difficulties and expenditures associated with: • incorporating and integrating new businesses, technologies, products, personnel, or operations of any company we may acquire, particularly if key personnel of the acquired company decide not to work for us; • consolidating operational and administrative functions; • coordinating outreach to our community; • disruption to our ongoing business and distraction of our management; • delay or reduction of transactions on our marketplace or in the business of the company we acquired due to uncertainty about continuity and effectiveness of service from either company; • entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • effectively managing an increased number of employees in diverse locations; • if we use cash to pay for acquisitions, limiting other potential uses for our cash; • incurring debt to fund such acquisitions, which may subject us to material restrictions on our ability to conduct our business; • issuing our equity securities; • incurring impairment charges related to potential write-downs of acquired assets or goodwill; • maintaining morale and culture and retaining and integrating key employees; • maintaining or developing controls, procedures, and policies (including effective internal control over financial reporting and disclosure controls and procedures); and • assuming liabilities related to the activities of the acquired business before the acquisition, including liabilities for violations of laws and regulations, commercial disputes, taxes, and other matters.
Completed and future acquisitions may result in unforeseen operational difficulties and expenditures associated with: • incorporating and integrating new businesses, technologies, products, personnel, or operations of any company we may acquire, particularly if key personnel of the acquired company decide not to work for us; • consolidating operational and administrative functions; • coordinating outreach to our community; • disruption to our ongoing business and distraction of our management; • delay or reduction of transactions on our marketplace or in the business of the company we acquired due to uncertainty about continuity and effectiveness of service from either company; • entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • effectively managing an increased number of employees in diverse locations; • if we use cash to pay for acquisitions, limiting other potential uses for our cash; • incurring debt to fund such acquisitions, which may subject us to material restrictions on our ability to conduct our business; • issuing our equity securities; • incurring impairment charges related to potential write-downs of acquired assets or goodwill; • maintaining morale and culture and retaining and integrating key employees; • maintaining or developing controls, procedures, and policies (including effective internal control over financial reporting and disclosure controls and procedures); and 11 • assuming liabilities related to the activities of the acquired business before the acquisition, including liabilities for violations of laws and regulations, commercial disputes, taxes, and other matters.
Our amended and restated certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairperson of our board of directors (“Chairperson”), or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors, which requires, without limitation, compliance with Rule 14a-19 under the Exchange Act, as applicable; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; and 40 • require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairperson of our board of directors, or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors, which requires, without limitation, compliance with Rule 14a-19 under the Exchange Act, as applicable; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; and • require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
If such tax or other laws, rules, or regulations are amended, or if new unfavorable laws, rules or regulations are enacted, the results could increase our tax payments or other obligations, prospectively or retrospectively, subject us to interest and penalties, decrease the demand for our services if we pass on such costs to our sellers or buyers, result in increased costs to update or expand our technical or administrative infrastructure, or effectively limit the scope of our business activities if we decided not to conduct business in particular jurisdictions.
If such tax or other laws, rules, or regulations are amended, or if new unfavorable laws, rules or regulations are enacted, the 33 results could increase our tax payments or other obligations, prospectively or retrospectively, subject us to interest and penalties, decrease the demand for our services if we pass on such costs to our sellers or buyers, result in increased costs to update or expand our technical or administrative infrastructure, or effectively limit the scope of our business activities if we decided not to conduct business in particular jurisdictions.
In addition to the actual and potential changes in data protection laws described elsewhere in 30 these Risk Factors, global developments in privacy and data security regulations have changed and may continue to change some of the ways we, our sellers, vendors, and other third parties collect, use, and share personal information and other proprietary or confidential information, and have created and will continue to create additional compliance obligations for us and our sellers, vendors, and other third parties.
In addition to the actual and potential changes in data protection laws described elsewhere in these Risk Factors, global developments in privacy and data security regulations have changed and may continue to change some of the ways we, our sellers, vendors, and other third parties collect, use, and share personal information and other proprietary or confidential information, and have created and will continue to create additional compliance obligations for us and our sellers, vendors, and other third parties.
Under current U.S. copyright law and the Communications Decency Act, we may benefit from statutory safe harbor provisions that protect us from liability for content posted by our sellers and buyers. However, trademark and patent laws do not include similar statutory provisions and liability for these forms of intellectual property is often determined by court decisions.
Under current U.S. copyright law and the Communications 12 Decency Act, we may benefit from statutory safe harbor provisions that protect us from liability for content posted by our sellers and buyers. However, trademark and patent laws do not include similar statutory provisions and liability for these forms of intellectual property is often determined by court decisions.
We are or may also be subject to the terms of our own and third-party external and internal privacy and security policies, codes, representations, certifications, industry standards, publications and frameworks and contractual obligations to third parties related to privacy, 31 information security, including contractual obligations to indemnify and hold harmless third parties from the costs or consequences of non-compliance with data protection laws, or other obligations.
We are or may also be subject to the terms of our own and third-party external and internal privacy and security policies, codes, representations, certifications, industry standards, publications and frameworks and contractual obligations to third parties related to privacy, information security, including contractual obligations to indemnify and hold harmless third parties from the costs or consequences of non-compliance with data protection laws, or other obligations.
The imposition by state governments and taxing authorities of sales tax collection obligations on out-of-state e-commerce businesses could also create additional administrative burdens for us, put us at a competitive disadvantage if they do 35 not impose similar obligations on our competitors, and decrease our future sales, which could harm our business and results of operations.
The imposition by state governments and taxing authorities of sales tax collection obligations on out-of-state e-commerce businesses could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could harm our business and results of operations.
The trading price and volume of our common stock could fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • variations in our results of operations and other financial and operational metrics, including the key financial and operating metrics, as well as how those results and metrics disclosed in this Annual Report on Form 10-K compare to analyst and investor expectations; • speculation about our results of operations; • the financial projections we may provide to the public, if any, any changes in these projections, or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates or ratings by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • events or factors resulting from war or other outbreak of hostilities, geopolitical tensions, acts of terrorism, global health crises, such as the COVID-19 pandemic, responses to these events, or the perception that any such factors or events may occur; • announcements of new services or offerings, strategic alliances, or significant agreements or other developments by us or our competitors; • announcements by us or our competitors of mergers or acquisitions or rumors of such transactions involving us or our competitors; • changes in our board of directors, management, or other key personnel; • disruptions in our online marketplace due to hardware, software or network problems, security breaches, or other issues; • global economic conditions or economic conditions in the jurisdictions in which we operate, and market conditions in our industry and those affecting our sellers and buyers; • trading activity by our principal stockholders and other market participants, in whom ownership of our common stock may be concentrated; • market perception of, or reaction to, our share repurchase program; • price and volume fluctuations, and general volatility, in the overall stock market; • the performance of the equity markets in general and in our industry; • the operating performance of other similar companies; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • new laws or regulations, new interpretations of existing laws, or regulations applicable to our business; • litigation or other claims against us; • the number of shares of our common stock that are available for public trading; and • any other factors discussed in this Annual Report on Form 10-K.
The trading price and volume of our common stock could fluctuate significantly in response to numerous factors, many of which are beyond our control, including: 34 • variations in our results of operations and other financial and operational metrics, including the key financial and operating metrics, as well as how those results and metrics disclosed in this Annual Report on Form 10-K compare to analyst and investor expectations; • speculation about our results of operations; • the financial projections we may provide to the public, if any, any changes in these projections, or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates or ratings by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • events or factors resulting from war or other outbreak of hostilities, geopolitical tensions, acts of terrorism, global health crises, such as the recent COVID-19 pandemic, responses to these events, or the perception that any such factors or events may occur; • announcements of new services or offerings, strategic alliances, or significant agreements or other developments by us or our competitors; • announcements by us or our competitors of mergers or acquisitions or rumors of such transactions involving us or our competitors; • changes in our board of directors, management, or other key personnel; • disruptions in our online marketplace due to hardware, software or network problems, security breaches, or other issues; • global economic conditions or economic conditions in the jurisdictions in which we operate, and market conditions in our industry and those affecting our sellers and buyers; • trading activity by our principal stockholders and other market participants, in whom ownership of our common stock may be concentrated; • market perception of, or reaction to, our share repurchase program; • price and volume fluctuations, and general volatility, in the overall stock market; • the performance of the equity markets in general and in our industry; • the operating performance of other similar companies; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • new or changes in laws or regulations or governmental policies, or, new interpretations of existing laws or regulations applicable to our business; • litigation or other claims against us; • the number of shares of our common stock that are available for public trading; and • any other factors discussed in this Annual Report on Form 10-K.
Our relationships with our marketing vendors are not long-term in nature and do not require any specific performance commitments. In addition, many of our online advertising vendors provide advertising services to other companies, including companies with whom we may compete. As competition for online advertising has increased, the cost for some of these services has also increased.
Our relationships with our marketing vendors are not long-term in nature and do not 16 require any specific performance commitments. In addition, many of our online advertising vendors provide advertising services to other companies, including companies with whom we may compete. As competition for online advertising has increased, the cost for some of these services has also increased.
All of the shares of common stock sold in our IPO are freely transferable without restriction or additional registration under the Securities Act of 1933, as amended (the “Securities Act”). We have registered all of the shares underlying outstanding options and any shares underlying other equity incentives we may grant in the future for public resale under the Securities Act.
All of the shares of common stock sold in our IPO are freely transferable without restriction or additional registration under the Securities Act of 1933, as amended (the “Securities Act”). 35 We have registered all of the shares underlying outstanding options and any shares underlying other equity incentives we may grant in the future for public resale under the Securities Act.
Successful claims by third-party rights owners 13 could require us to pay substantial damages or refrain from permitting any further listing of the relevant items. These types of claims could force us to modify our business practices, which could lower our revenue, increase our costs, or make our platform less user-friendly.
Successful claims by third-party rights owners could require us to pay substantial damages or refrain from permitting any further listing of the relevant items. These types of claims could force us to modify our business practices, which could lower our revenue, increase our costs, or make our platform less user-friendly.
National retailers and brands set pricing for new luxury design products. Although the luxury design products available through our online marketplace are generally exclusive, one-of-a-kind products, promotional pricing by these parties may nonetheless adversely affect the value of luxury design products listed with us, and, in turn, our GMV and results of operations.
National retailers and brands set pricing for new luxury design items. Although the luxury design items available through our online marketplace are generally exclusive, one-of-a-kind products, promotional pricing by these parties may nonetheless adversely affect the value of luxury design items listed with us, and, in turn, our GMV and results of operations.
Additionally, as we enter new verticals, potential sellers may demand lower commissions than our current verticals, which would adversely affect our take rate and results of operations. Expansion of our offerings may also strain our management and operational resources, specifically the need to hire and manage additional authentication and market experts.
Additionally, as we enter new verticals, potential sellers may demand lower commissions than our current verticals, which would adversely 15 affect our take rate and results of operations. Expansion of our offerings may also strain our management and operational resources, specifically the need to hire and manage additional authentication and market experts.
If we fail to provide sellers or buyers with the service and experience they expect, or experience seller or buyer complaints or negative publicity about our online marketplace services, merchandise, delivery times or customer support, whether justified or not, the value of our brand would be harmed and our business may suffer.
If we fail to provide sellers or buyers with the service and experience they expect, or if we receive seller or buyer complaints or negative publicity about our online marketplace services, merchandise, delivery times or customer support, whether justified or not, the value of our brand would be harmed and our business may suffer.
The successful assertion of one or more large claims against us that exceed available insurance coverage or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material and adverse effect on our business, including our financial condition, results of operations, and reputation.
The successful assertion of one or more large claims against us that exceed available insurance coverage or the occurrence of changes in our insurance policies, including premium increases or the imposition of large 24 deductible or co-insurance requirements, could have a material and adverse effect on our business, including our financial condition, results of operations, and reputation.
If we fail to comply with these laws and regulations or are found to be in violation of U.S. sanctions or export control laws, including by facilitating unlawful transactions, we and certain of our employees could be subject to civil or 29 criminal penalties, including the possible loss of export privileges and fines.
If we fail to comply with these laws and regulations or are found to be in violation of U.S. sanctions or export control laws, including by facilitating unlawful transactions, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges and fines.
These investments include marketing to attract and retain new sellers and buyers, developing localized services and web platforms, forming relationships with third-party service providers, supporting operations in multiple countries, and potentially acquiring companies based outside the United States and integrating those companies with our operations.
These investments include marketing to attract and retain new sellers and buyers, developing localized services and web platforms, forming relationships with third-party service providers, supporting operations in multiple countries, and potentially acquiring companies based 18 outside the United States and integrating those companies with our operations.
Any return to stockholders will therefore be limited to the increase, if any, in our stock price, which may never occur. Our directors, executive officers and principal stockholders beneficially own a substantial percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Any return to stockholders will therefore be limited to the increase, if any, in our stock price, which may never occur. 36 Our directors, executive officers and principal stockholders beneficially own a substantial percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
We have acquired a number of other businesses in the past, and may acquire additional businesses, products, or technologies in the future. For example, in May 2019, we acquired Design Manager, a project management and accounting software company for interior designers. In June 2022, we sold 100% of our equity interest in Design Manager.
We have acquired a number of other businesses in the past, and may acquire additional businesses, products, or technologies in the future. For example, in May 2019, we acquired Design Manager, a project management and accounting software company for interior designers. Also, in June 2022, we sold 100% of our equity interest in Design Manager.
Any claims successfully brought against us could subject us to significant liability for damages and we may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. We also might be required to seek a license for third-party intellectual property.
Any claims successfully brought against us could subject us to significant liability for damages and we may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. We also might be required to seek a costly license for third-party intellectual property.
We use data science to predict seller and buyer preferences, and there can be no assurance that our data science will accurately anticipate seller or buyer requirements. Lead times relating to these changing preferences may make it difficult for us to respond rapidly to 17 new or changing trends.
We use data science to predict seller and buyer preferences, and there can be no assurance that our data science will accurately anticipate seller or buyer requirements. Lead times relating to these changing preferences may make it difficult for us to respond rapidly to new or changing trends.
Any reduction in our ability to make effective use of such technologies could harm our ability to personalize the 28 experience of buyers, increase our costs and limit our ability to attract new, and retain existing, sellers and buyers on cost-effective terms. As a result, our business could be adversely affected.
Any reduction in our ability to make effective use of such technologies could harm our ability to personalize the experience of buyers, increase our costs and limit our ability to attract new, and retain existing, sellers and buyers on cost-effective terms. As a result, our business could be adversely affected.
In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the price of our common stock, whether due to any of the foregoing factors or otherwise, could decline for reasons unrelated to our 38 business, results of operations, or financial condition.
In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the price of our common stock, whether due to any of the foregoing factors or otherwise, could decline for reasons unrelated to our business, results of operations, or financial condition.
We may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees and may need incur additional and unanticipated costs to rehire or hire new 20 personnel to perform such duties or may need to conduct additional reductions in workforce as we further redistribute such duties.
We may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees and may need to incur additional and unanticipated costs to rehire or hire new personnel to perform such duties or may need to conduct additional reductions in workforce as we further redistribute such duties.
Existing sellers and buyers may also stop listing new items for sale or decrease their purchases or close 24 their accounts altogether. Further, any reputational damage resulting from breach of our security measures could create distrust of our company by sellers and buyers.
Existing sellers and buyers may also stop listing new items for sale or decrease their purchases or close their accounts altogether. Further, any reputational damage resulting from breach of our security measures could create distrust of our company by sellers and buyers.
We believe our ability to compete depends on many factors within and beyond our control, including: • engaging and enhancing our relationships with existing sellers and buyers and attracting new sellers and buyers; • maintaining favorable brand recognition and effectively delivering our online marketplace to sellers and buyers; • identifying and delivering authentic luxury design products; • the amount, diversity, and quality of luxury design products that we or our competitors offer; • our ability to expand the verticals for luxury design products listed on our online marketplace; • the price at which listed, authenticated luxury design products through our online marketplace are offered; • the speed and cost at which we can authenticate and make available listed luxury design products; and • the ease with which our sellers can list and sell, and our buyers can purchase and return, luxury design products sold and purchased on our online marketplace.
We believe our ability to compete depends on many factors within and beyond our control, including: • engaging and enhancing our relationships with existing sellers and buyers and attracting new sellers and buyers; • maintaining favorable brand recognition and effectively delivering our online marketplace to sellers and buyers; • identifying and delivering authentic luxury design items; • the amount, diversity, and quality of luxury design items that we or our competitors offer; • our ability to expand the verticals for luxury design items listed on our online marketplace; • the price at which listed, authenticated luxury design items through our online marketplace are offered; • the speed and cost at which we can authenticate and make available listed luxury design items; and • the ease with which our sellers can list and sell, and our buyers can purchase and return, luxury design items sold and purchased on our online marketplace.
We also compete with the online offerings of these traditional retail competitors, resale players focused on niche or single categories, as well as technology-enabled online marketplaces that may offer the same 15 or similar goods and services that we offer.
We also compete with the online offerings of these traditional retail competitors, resale players focused on niche or single categories, as well as technology-enabled online marketplaces that may offer the same or similar goods and services that we offer.
In addition to the direct costs of these losses, if the fraud is related to credit card transactions and becomes excessive, it could result in us paying higher fees or losing 21 the right to accept credit cards for payment.
In addition to the direct costs of these losses, if the fraud is related to credit card transactions and becomes excessive, it could result in us paying higher fees or losing the right to accept credit cards for payment.
We may adjust or re-allocate our advertising spend across channels, product verticals, and geographic markets to optimize the effectiveness of these activities. We expect to increase advertising spend in future periods to continue driving our growth.
We may adjust or re-allocate our advertising spend across channels, product verticals, and geographic markets to optimize the effectiveness of these activities. We may increase advertising spend in future periods to continue driving our growth.
We have experienced, and expect that in the future we will experience, interruptions, delays, and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, and capacity constraints, and lack of network connectivity in one or more regions, which could affect the availability of services on our platform and prevent or inhibit the ability of buyers to access our online marketplace or complete purchases on our online marketplace and app.
We have experienced, and expect that in the future we will experience, interruptions, delays, and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, capacity constraints, and lack of network connectivity in one or more regions, which affect the availability of services on our platform and prevent or inhibit the ability of sellers and buyers to access our online marketplace or complete purchases on our online marketplace and app.
For example, we are now subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the rules and regulations of the SEC and Nasdaq.
For example, we are subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the rules and regulations of the SEC and Nasdaq.
Our testing, or the subsequent testing by our independent public accounting firm, may reveal deficiencies in our internal control over financial reporting that 33 are deemed to be material weaknesses.
Our testing, or the subsequent testing by our independent public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
These competitors may engage in more extensive technology development efforts, enter the business of online listing of luxury design products, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build larger seller or buyer bases or generate revenue from their existing seller and buyer bases more effectively than we do.
These competitors may engage in more extensive technology development efforts, enter the business of online listing of luxury design items, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build larger seller or buyer bases or generate revenue from their existing seller and buyer bases more effectively than we do.
From time to time, counterfeit goods have been and may be listed on our online marketplace. While we have invested heavily in our seller vetting process as described above, we cannot be certain that we will accurately authenticate every item that is listed with us. As the sophistication of counterfeiters increases, it may be increasingly difficult to identify counterfeit products.
From time to time, counterfeit goods have been and may be listed on our online marketplace. While we have invested heavily in our seller vetting process as described above, we cannot accurately authenticate every item that is listed with us. As the sophistication of counterfeiters increases, it may be increasingly difficult to identify counterfeit products.
In addition, our business may suffer if we are unable to attract new and repeat sellers that supply the necessary high-end, appropriately priced, and in-demand luxury design products in these additional verticals, and these verticals may also have a different range of margin profiles than the pieces currently sold through our online marketplace.
In addition, our business may suffer if we are unable to attract new and repeat sellers that supply the necessary high-end, appropriately priced, and in-demand luxury design items in these additional verticals, and these verticals may also have a different range of margin profiles than the pieces currently sold through our online marketplace.
In many cases, we refund the cost of a product to a buyer if we determine that the item is not authentic. The sale of any counterfeit goods may damage our reputation as a trusted online marketplace for authenticated, luxury design products, which may impact our ability to attract and maintain repeat sellers and buyers.
In many cases, we refund the cost of a product to a buyer if we determine that the item is not authentic. The sale of any counterfeit goods may damage our reputation as a trusted online marketplace for authenticated, luxury design items, which may impact our ability to attract and maintain repeat sellers and buyers.
The market for luxury design products is highly competitive. We compete with a broad range of vendors of new and pre-owned luxury design products, including traditional brick-and-mortar entities, such as department stores, branded luxury goods stores, and specialty retailers, and entities providing access to more unique luxury goods, such as galleries, boutiques, independent retail stores, and auction houses.
The market for luxury design items is highly competitive. We compete with a broad range of vendors of new and pre-owned luxury design items, including traditional brick-and-mortar entities, such as department stores, branded luxury goods stores, and specialty retailers, and entities providing access to more unique luxury goods, such as galleries, boutiques, independent retail stores, and auction houses.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 42 Item 1B.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 39 Item 1B.
Our vetting specialists cultivate relationships with our seller base and vet the luxury design products that our sellers want to list. While we do assess the qualifications of all vetting specialists, this may not prevent illegal, improper, or otherwise inappropriate actions, such as theft, from occurring in connection with our services.
Our vetting specialists cultivate relationships with our seller base and vet the luxury design items that our sellers want to list. While we do assess the qualifications of all vetting specialists, this may not prevent illegal, improper, or otherwise inappropriate actions, such as theft, from occurring in connection with our services.
We could also be subject to fines or other penalties which in the aggregate could harm our business. Additionally, the luxury design products our sellers sell could be subject to recalls and other remedial actions and product safety, labeling, and licensing concerns may require us to voluntarily remove selected items from our online marketplace.
We could also be subject to fines or other penalties which in the aggregate could harm our business. 26 Additionally, the luxury design items our sellers sell could be subject to recalls and other remedial actions and product safety, labeling, and licensing concerns may require us to voluntarily remove selected items from our online marketplace.
Furthermore, while the GDPR and U.K. GDPR remain substantially similar for the time being, the U.K. GDPR is currently under review in the United Kingdom and there may be further changes made to it over the next few years, including in ways that may differ from the GDPR, which could result in further compliance obligations.
GDPR remain substantially similar for the time being, the U.K. GDPR is currently under review in the United Kingdom and there may be further changes made to it over the next few years, including in ways that may differ from the GDPR, which could result in further compliance obligations.
If actual results differ from our estimates, the trading price of our common stock may decline. In addition, in the past, we have generally recognized higher net revenue in the fourth quarter. In anticipation of increased activity during the fourth quarter, we may incur significant additional expenses, including additional marketing and staffing in our support operations.
If actual results differ from our estimates, the trading price of our common stock may decline. We have generally recognized higher net revenue in the fourth quarter. In anticipation of increased activity during the fourth quarter, we may incur significant additional expenses, including additional marketing and staffing in our support operations.
As a result, we may have difficulty identifying sellers who meet our standards for providing luxury design products and our customer service requirements. If we fail to attract new sellers or drive continued or increased listings, our ability to grow our business and our results of operations would suffer.
As a result, we may have difficulty identifying sellers who meet our standards for providing luxury design items and our customer service requirements. If we fail to attract new sellers or drive continued or increased listings, our ability to grow our business and our results of operations would suffer.
Additionally, we may be subject to allegations that an antique, vintage, or other luxury design product we listed and sold through our online marketplace is not authentic. Such controversy could negatively impact our reputation and brand and harm our business and results of operations.
Additionally, we may be subject to allegations that an antique, vintage, or other luxury design item we listed and sold through our online marketplace is not authentic. Such controversy could negatively impact our reputation and brand and harm our business and results of operations.
We may experience fluctuations in our tax obligations and effective tax rate. We are subject to taxation in the United States and in numerous other jurisdictions. We record tax expense based on current tax payments and our estimates of future tax payments, which may include reserves for estimates of probable settlements of tax 36 audits.
We may experience fluctuations in our tax obligations and effective tax rate. We are subject to taxation in the United States and in other jurisdictions. We record tax expense based on current tax payments and our estimates of future tax payments, which may include reserves for estimates of probable settlements of tax audits.
Maintaining our brand will depend largely on our ability to continue providing our sellers with service that is consistent with the level of quality associated with the luxury design products they are listing and on the quality of our vetting specialists who represent our brand to new and existing sellers.
Maintaining our brand will depend largely on our ability to continue providing our sellers with service that is consistent with the level of quality associated with the luxury design items they are listing and on the quality of our vetting specialists who represent our brand to new and existing sellers.
To facilitate our future growth and profitability, we are investing in our advertising, promotion, public relations, and marketing programs.
To help facilitate our future growth and profitability, we are investing in our advertising, promotion, public relations, and marketing programs.
In order to attract buyers to our online marketplace, the prices for the luxury design products sold through our online marketplace may need to be lowered in order to compete with these pricing strategies, which could negatively affect GMV and in turn, our net revenue.
In order to attract buyers to our online marketplace, the prices for the luxury design items sold through our online marketplace may need to be lowered in order to compete with these pricing strategies, which could negatively affect GMV and in turn, our net revenue.
Some of the luxury design products sold through our online marketplace on behalf of our sellers may expose us to product liability claims and litigation or regulatory action relating to personal injury, environmental, or property damage.
Some of the luxury design items sold through our online marketplace on behalf of our sellers may expose us to product liability claims and litigation or regulatory action relating to personal injury, environmental, or property damage.
We intend to take advantage of certain exemptions under the JOBS Act from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.
We are taking advantage of certain exemptions under the JOBS Act from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.
We list luxury design products from numerous sellers located throughout the United States and from over 90 countries, and the items listed by our sellers may contain materials such as fur, python, ivory, and other exotic animal product components, that are subject to regulation or cultural patrimony considerations.
We list luxury design items from numerous sellers located throughout the United States and from over 75 countries, and the items listed by our sellers may contain materials such as fur, python, ivory, and other exotic animal product components, that are subject to regulation or cultural patrimony considerations.
In addition, all 50 states have laws, including obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers, and others.
In addition, all 50 states have laws that include obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers, and others.
Economic conditions may also be affected by global health crises, such as the COVID-19 pandemic, natural disasters, such as earthquakes, hurricanes, floods, severe storms, and wildfires, and wars, social unrest, political tensions, or other unexpected events, which may include further embargoes, regional instability and geopolitical shifts, that may adversely impact our business and operating results to an extent that cannot be predicted.
Economic conditions may also be affected by global health crises, natural disasters, such as earthquakes, hurricanes, floods, severe storms, and wildfires, and wars, social unrest, political tensions, or other unexpected events, which may include further embargoes, regional instability, and geopolitical shifts that may adversely impact our business and operating results to an extent that cannot be predicted.
These potential impacts may have a material adverse effect on our business, financial condition, including on our financial statements of operations and cash flow, operating results, and liquidity. The delivery services could also be affected by industry consolidation, insolvency, or government shut-downs.
These potential impacts may have a material adverse effect on our business, financial condition, including on our financial statements of operations and cash flow, operating results, and liquidity. The delivery services could also be affected by industry consolidation, insolvency, or government shutdowns.
Further, any disruption in the operations of a substantial number of sellers, such as interruptions in delivery services, disruption due to public health crises, such as the COVID-19 pandemic, natural disasters, inclement weather, or political unrest, could also result in negative experiences for a substantial number of buyers.
Further, any disruption in the operations of a substantial number of sellers, such as interruptions in delivery services or disruption due to public health crises, natural disasters, inclement weather, or political unrest, could also result in negative experiences for a substantial number of buyers.
To the extent we do not accurately predict the evolving preferences of our buyers or are unable to identify and vet sellers of luxury design products who address such buyer preferences, our ability to grow our business and our results of operations would suffer.
To the extent we do not accurately predict the evolving preferences of our buyers or are unable to identify sellers of luxury design items who address such buyer preferences, our ability to grow our business and our results of operations would suffer.
We may 34 be unable to locate and hire qualified professionals with requisite technical and public company experience when and as needed. In addition, new employees will require time and training to learn our business and operating processes and procedures.
We may be unable to identify and hire qualified professionals with requisite technical and public company experience when and as needed. In addition, new employees will require time and training to learn our business and operating processes and procedures.
We intend to deepen our penetration in our existing verticals for luxury design products and continue to explore additional verticals to serve existing, and attract new, sellers and buyers.
We intend to deepen our penetration in our existing verticals for luxury design items and continue to explore additional verticals to serve existing, and attract new, sellers and buyers.
For example, in the event a potential third-party strike occurs, this may cause orders to be lost or delivered late, which could result in canceled customer orders, reduced GMV and net revenue, and negatively impact net loss. It is possible that a potential third-party strike could also result in increased shipping costs and buyer accommodations.
For example, a third-party strike may result in increased shipping costs and buyer accommodations and may cause orders to be lost or delivered late, which could result in canceled customer orders, reduced GMV and net revenue, and negatively impact net loss. It is possible that a potential third-party strike could also result in increased shipping costs and buyer accommodations.
The GDPR is subject to changing interpretations due to decisions of data protection authorities, courts, and related legislative efforts both E.U.-wide and in particular jurisdictions. Due to the GDPR and the implementation following Brexit of the U.K. General Data Protection Regulation (“U.K.
The GDPR is subject to changing interpretations due to decisions of data protection authorities, courts, and related legislative efforts both E.U.-wide and in particular jurisdictions. Due to the GDPR and the implementation following Brexit of the U.K.
Risks related to rapid climate change may have an increasingly adverse impact on our business, our sellers’ businesses, and our buyers in the longer term. Any of our primary locations and the locations of our buyers and sellers may be vulnerable to the adverse effects of climate change.
Risks related to rapid climate change may have an increasingly adverse impact on our business, our sellers’ businesses, and our buyers. Any of our primary locations and the locations of our buyers and sellers may be vulnerable to the adverse effects of climate change.
The adoption of any laws or regulations that adversely affect the popularity or growth in use of the Internet or our services, including laws or regulations that undermine open and neutrally administered Internet access, could decrease user demand for our service offerings and increase our cost of doing business.
Additionally, the adoption of any laws or regulations that adversely affect the popularity or growth in use of or access to the Internet or mobile networks or our services, including laws or regulations that undermine open and neutrally administered Internet access, could decrease user demand for our service offerings and increase our cost of doing business.
From time to time, we may become involved in litigation matters, such as matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, accessibility, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
From time to time, we have, and may in the future, become involved in legal proceedings, claims, or litigation matters, such as matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, accessibility, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
Use of social media, emails, and push notifications may harm our reputation or subject us to fines or other penalties. We use social media, emails, and push notifications as part of our omni-channel approach to marketing and communications with sellers and buyers.
Use of social media, emails, phone calls, text messages, and push notifications may harm our reputation or subject us to fines or other penalties. We use social media, emails, phone calls, text messages, and push notifications as part of our omni-channel approach to marketing and communications with sellers and buyers.
Transaction loss expense associated with our buyer protection program accounted for approximately 87%, 85%, and 81% of the provision for transaction losses in the fiscal years ended December 31, 2023, 2022, and 2021, respectively, with discretionary buyer reimbursements, which are part of the buyer protection program, constituting a small portion thereof.
Transaction loss expense associated with our buyer protection program accounted for approximately 70%, 87%, and 85%, of the provision for transaction losses in the years ended December 31, 2024, 2023, and 2022, respectively, with discretionary buyer reimbursements, which are part of the buyer protection program, constituting a small portion thereof.
These laws, rules and regulations are constantly evolving, and we expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the EU and other jurisdictions.
These privacy and data protection laws, rules, and regulations are quickly evolving, and we expect that there will continue to be new proposed laws, rules, regulations, and industry standards concerning privacy, data protection, and information security in the United States, UK, EU, and other jurisdictions in which we operate.
For example, the reduction in workforce may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, and decreased employee morale. In addition, while positions have been eliminated, certain functions necessary to our operations remain.
For example, reductions in workforce may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, and decreased employee morale. In addition, while certain positions may be eliminated, other functions necessary to our operations remain.
For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was unable to continue their operations and the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations.
For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was unable to continue their operations and the FDIC was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations.
Our use and other processing of personal information and other data is subject to laws and obligations relating to privacy and data protection, and our failure to comply with such laws and obligations could harm our business.
Risks Related to Data Privacy and Cybersecurity, and Infrastructure Our use and other processing of personal information and other data is subject to laws and obligations relating to privacy and data protection, and our failure to comply with such laws and obligations could harm our business.
You should not rely on period-to-period comparisons of our results of operations as an indication of our future performance.
You should not rely on period-to-period comparisons of our net revenue or results of operations as an indication of our future performance.
Data Protection Act of 2018), we may experience difficulty retaining or obtaining new E.U. or U.K. sellers, or current and new sellers may limit their selling into the European Union, due to the legal requirements, compliance cost, potential risk exposure, and uncertainty for them about their own compliance obligations with respect to the GDPR and U.K. GDPR.
GDPR, we may experience difficulty retaining or obtaining new E.U. or U.K. sellers, or current and new sellers may limit their selling into the European Union, due to the legal requirements, compliance cost, potential risk exposure, and uncertainty for them about their own compliance obligations with respect to the GDPR and U.K. GDPR. Furthermore, while the GDPR and U.K.
Our cash, cash equivalents and short-term investments may be exposed to failure of our banking institutions. While we seek to minimize our exposure to third-party losses of our cash, cash equivalents and short-term investments, our cash held in non-interest bearing and interest-bearing accounts may exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
While we seek to minimize our exposure to third-party losses of our cash, cash equivalents and short-term investments, our cash held in non-interest bearing and interest-bearing accounts that may exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
In particular, we have incurred, and expect to continue to incur, significant expense and devote substantial management effort to complying with the requirements of Section 404. We have hired, and intend to hire, additional accounting and finance personnel with system implementation experience and expertise regarding compliance with the Sarbanes-Oxley Act.
We have incurred, and expect to continue to incur, significant expense and devote substantial management effort to complying with the requirements of Section 404 of the Sarbanes-Oxley Act. For example, we have hired, and may in the future need to hire, additional accounting and finance personnel with system implementation experience and expertise regarding compliance with the Sarbanes-Oxley Act.
Further, these and other factors may cause our net revenue and results of operations to fall below the expectations of market analysts and investors in future periods, which could cause the market price of our common stock to decline substantially. Any decline in the market price of our common stock would cause the value of your investment to decline.
Further, these and other factors may cause our net revenue and results of operations to fall below our expectations or the expectations of market analysts and investors in future periods, which could cause the market price of our common stock to decline substantially.
Additionally, we may be bound by contractual requirements applicable to our collection, use, processing and disclosure of various types of data, including personal information, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters.
Additionally, we are, and will continue to be, bound by contractual requirements applicable to our collection, use, processing and disclosure of various types of data, such as via Data Processing Addenda, including personal information, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters.
We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the JOBS Act.
We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
We believe that our existing cash, cash equivalents and short-term investments, together with any cash generated from operations, will be enough to meet our anticipated cash needs for at least the next 12 months.
We believe that our existing cash, cash equivalents, and short-term investments will be enough to meet our anticipated cash needs for at least the next 12 months.
Further, we make certain assumptions when planning our expenses based on our expected revenue based in part on historical results. Because our operating expenses are relatively fixed in the short term, any failure to achieve our revenue expectations would have a direct, adverse effect on our results of operations.
Our business is subject to seasonal fluctuations, and, as a result, we make certain assumptions when planning our expenses based on our expected revenue based in part on historical results. Because our operating expenses are relatively fixed in the short term, any failure to achieve our revenue expectations would have a direct, adverse effect on our results of operations.
In the United States, rules and regulations governing data privacy and security include those promulgated under the authority of the Federal Trade Commission Act, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California’s California Consumer Privacy Act of 2018 (“CCPA”) and California Privacy Rights Act of 2020 (“CPRA”), and other state and federal laws relating to privacy, consumer protection, and data security.
In the United States, rules and regulations governing data privacy and security include those promulgated under the authority of the Federal Trade Commission Act, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the CCPA and CPRA, and other state and federal laws relating to privacy, consumer protection, and data security.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor a discussion of how material risks from cybersecurity threats could materially affect us, see “Risk Factors—Risks Related to Privacy, Cybersecurity, and Infrastructure—If sensitive information about our sellers and buyers or other third parties with whom we transact business is disclosed, or if we or our third-party providers are subject to cyber-attacks, use of our online marketplace could be curtailed, we may be exposed to liability, and our reputation would suffer.”
Biggest changeFor a discussion of how material risks from cybersecurity threats could materially affect us, see “Risk Factors—Risks Related to Privacy, Cybersecurity, and Infrastructure—If sensitive information about our sellers and buyers or other third parties with whom we transact business is disclosed, or if we or our third-party providers are subject to cyber-attacks, use of our online marketplace could be curtailed, we may be exposed to liability, and our reputation would suffer.” Governance Our Board of Directors is ultimately responsible for the Company's risk oversight, including cybersecurity and privacy risks.
As of the date of this Annual Report on Form 10-K, we are not aware of any material risks from cybersecurity threats that have materially affected us, including our business strategy, results of operations, or financial condition.
As of the date of this Annual Report on Form 10-K, we are not aware of any material incidents or risks from cybersecurity threats that have materially affected us, including our business strategy, results of operations, or financial condition.
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Item 1C. Cybersecurity We are committed to protecting the security of our systems and the data we handle. We are currently designing a program to align with international best practices used in our industry, such as the Cyber Security Framework from the National Institute of Standards and Technology (“NIST”).
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Item 1C. Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as our business depends on both buyers and sellers trusting that their shopping experience with us is both reliable and safe.
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Our Board of Directors has ultimate oversight over cybersecurity risk assessment and management, which it administers through the Audit Committee. The Audit Committee oversees our cybersecurity policies and practices, internal controls regarding information security, and compliance with legal and regulatory requirements regarding cybersecurity risks. The Audit Committee receives periodic updates on cybersecurity matters from the leaders of our management team.
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We have integrated cybersecurity risk management into our broader risk management framework in many ways, including (i) our regular updates to the Audit Committee, (ii) our information technology and security related internal controls and (iii) our global incident response and vulnerability management programs. We view cybersecurity as a shared responsibility across the Company.
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As part of our overall enterprise risk management processes and to better evaluate our cybersecurity risks, we are conducting a business impact analysis by leveraging what we anticipate being an annual company-wide enterprise risk management assessment to understand the relationship between our critical business operations and our information technology systems.
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All employees are required to complete yearly security training, and we periodically perform tabletop exercises with management participation. Further, our cross-functional teams work together to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.
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We are partnering with third party service providers to assist us in achieving our cybersecurity goals. We also have a cyber risk insurance policy designed to help us mitigate risk exposure by offsetting costs involved with recovery and remediation after a cybersecurity breach or similar event.
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We use various security tools and processes to help prevent, identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner, including, but not limited to, internal reporting, monitoring and detection tools and a vulnerability identification program.
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Recognizing the complexity and evolving nature of cybersecurity threats, we engage with a range of external experts, including cybersecurity consultants in evaluating and testing our risk management systems. These partnerships enable us to leverage specialized knowledge and insights, with a goal of ensuring our cybersecurity strategies and processes remain at the forefront of industry best practices.
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Our collaboration with these third parties includes regular audits, threat assessments, and consultation on security enhancements.
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In order to mitigate data or security incidents that may originate from third party vendors or suppliers, we conduct both privacy and security assessments to properly identify, prioritize, assess and remediate any third party risks, and require security and privacy addenda to our contracts where applicable.
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The nature of our business exposes us to cybersecurity threats and attacks that can lead to the unauthorized acquisition or access, compromise, loss, misuse or theft of our data, including personal information, confidential information or intellectual property.
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Our Board of Directors has delegated responsibility for oversight of cybersecurity risks to the Audit Committee. The Audit Committee comprises board members with diverse expertise, including risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.
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Our Audit Committee is charged with reviewing and discussing our policies with respect to risk assessment and risk management, which includes overseeing our major financial, privacy, security, cybersecurity, and technology risk exposures and the steps our management has taken to monitor and control these exposures.
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At the management level, our Head of Engineering and the system operations team are primarily responsible for identifying, assessing, monitoring, and managing cybersecurity. Our team also regularly partners with a firm with cybersecurity specialists, implementing best practices and building a cybersecurity framework around identifying, protecting, detecting, responding, and recovering from cybersecurity threats.
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The Audit Committee receives reports from senior management, including our periodic committee meetings, which include, on a rotating basis, in-depth presentations on specific areas of risk and regular enterprise risk management updates.
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In addition to our scheduled meetings, our Global Incident Response Plan ensures that significant developments or incidents, even if immaterial to us, are reviewed regularly by a cross-functional team to determine whether further escalation to the Audit Committee is appropriate, ensuring the committee's and the Board of Directors’ oversight is timely and responsive.
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Our Global Incident Response Plan also includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 40

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeEven if any particular litigation or claim is not resolved in a manner that is adverse to our interests, such litigation can have a negative impact on us because of defense and settlement costs, diversion of management resources from our business, and other factors. Item 4. Mine Safety Disclosures Not applicable. 43 PART II
Biggest changeEven if any particular litigation or claim is not resolved in a manner that is adverse to our interests, such litigation can have a negative impact on us because of defense and settlement costs, diversion of management resources from our business, and other factors. Item 4. Mine Safety Disclosures Not applicable. 41 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Biggest changeHolders of Record As of the close of business on February 24, 2025, there were 85 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or other nominees.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock has been listed on the Nasdaq Stock Market under the symbol “DIBS” since June 10, 2021. Prior to that date, there was no public trading market for our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock has been listed on the Nasdaq Global Market under the symbol “DIBS” since June 10, 2021. Prior to that date, there was no public trading market for our common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers In August 2023, the Board of Directors authorized a Stock Repurchase Program to repurchase up to an aggregate of $20.0 million of our common stock.
Sales of Unregistered Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers In August 2023, the Board of Directors authorized the Company to repurchase up to an aggregate of $20.0 million of its common stock (“2023 Stock Repurchase Program”).
Dividend Policy We have never declared or paid cash dividends on our capital stock. We intend to retain all available funds and future earnings and do not anticipate paying cash dividends in the foreseeable future.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We have never declared or paid cash dividends on our capital stock. We intend to retain all available funds and future earnings and do not anticipate paying cash dividends in the foreseeable future.
The following table presents details of our monthly share repurchases for the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share (a) Total number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs (in thousands) October 1, 2023 - October 31, 2023 116,194 $ 3.87 116,194 $ 18,174 November 1, 2023 - November 30, 2023 167,263 $ 4.44 167,263 $ 17,431 December 1, 2023 - December 31 2023 205,067 $ 4.52 205,067 $ 16,504 Total 488,524 488,524 (a) Average price per share includes broker commissions.
The following table presents details of our monthly share repurchases for the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share (a) Total number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs (in thousands) October 1, 2024 - October 31, 2024 314,946 $ 4.42 314,946 $ 7,693 November 1, 2024 - November 30, 2024 443,298 $ 4.03 443,298 $ 5,905 December 1, 2024 - December 31 2024 566,708 $ 3.74 566,708 $ 3,788 Total 1,324,952 1,324,952 (a) Average price per share includes broker commissions.
As of December 31, 2023, 823,483 shares have been purchased for a total cost of $3.5 million since the commencement of the program and approximately $16.5 million remains available for future purchases under the program.
In August 2024, the Board of Directors authorized the Company to repurchase up to an aggregate of $10.0 million of its common stock (“2024 Stock Repurchase Program”). As of December 31, 2024, 6,443,522 shares have been purchased for a total cost of $31.6 million and approximately $3.8 million remains available for future purchases under the 2024 Stock Repurchase Program.
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Holders of Record As of the close of business on February 1, 2024, there were approximately 106 stockholders of record of our common stock.
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In June 2024, the Board of Directors authorized an increase to the Company’s 2023 Stock Repurchase Program to an aggregate repurchase amount of $25.5 million, and subsequently announced the completion of its 2023 Stock Repurchase Program.
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Use of Proceeds from Public Offering of Common Stock On June 14, 2021, we completed our IPO, selling 6,612,500 shares of our common stock at a price of $20.00 per share (including shares subject to the underwriters’ over-allotment option) for net proceeds of $123.0 million after deducting underwriters’ discounts and commissions, before deducting offering costs.
Added
(b) On August 20, 2024, the Board of Directors authorized a 2024 Stock Repurchase Program to repurchase up to an aggregate of $10.0 million of our common stock. The Company’s officers and directors are required to comply with the Company’s securities trading policy at all times, including during a repurchase program.
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The offer and sale of the shares in the IPO was registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-256188), which was declared effective by the SEC on June 9, 2021.
Added
The securities trading policy, among other things, prohibits trading in the Company’s securities when in possession of material non-public information and restricts the ability of certain officers or director from transacting in the Company’s securities during specific blackout periods, subject to certain limited exceptions, including transactions pursuant to a Rule 10b5-1 trading plan that complies with the conditions of Rule 10b5-1 of the Exchange Act.
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There has been no material change in the planned use of the IPO proceeds as described in our final prospectus dated June 9, 2021 and filed with the SEC on June 10, 2021, pursuant to Rule 424(b) of the Securities Act.
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As of the date of this Annual Report on Form 10-K, we cannot predict with certainty all of the particular uses for the net proceeds, or the amounts that we will actually spend on the uses set forth in the prospectus. Sales of Unregistered Equity Securities None.
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(b) On August 4, 2023, the Board of Directors authorized a Stock Repurchase Program to repurchase up to an aggregate of $20.0 million of our common stock. 44 Securities Authorized for Issuance under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our 2024 proxy statement set forth in the section titled “Securities Authorized for Issuance under Equity Compensation Plans” to be filed with the SEC within 120 days of the year ended December 31, 2023 (the “Proxy Statement”).
Removed
Performance Graph We have presented below the cumulative total return to our stockholders in comparison to the Nasdaq Composite Index (Nasdaq Composite) and Russell 2000. All values assume a $100 initial investment at the market close on June 10, 2021, the date our common stock began trading on the Nasdaq Stock Market, through December 31, 2023.
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The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock.
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This performance graph shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our other filings under the Securities Act or the Exchange Act. Item 6. [Reserved] 45

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur changes in operating assets and liabilities were impacted by a negative change in operating lease liabilities of $2.8 million due to the continued lease payments on our prior NYC headquarters, a $1.5 million negative change in prepaid and other current assets primarily related to timing of prepayments including the current portion of a significant payment in the fourth quarter of 2023 relating to our platform hosting expense, and a $2.1 million negative change in other assets, primarily related to the long-term portion of the prepayment referenced above and the broker fee paid in connection with our subleasing of our prior NYC headquarters, as discussed in Note 10 “Leases.” 56 Net cash used in operating activities of $27.9 million for the year ended December 31, 2022, was driven primarily by the cash impact of net loss and negative changes in our operating assets and liabilities, including a $5.2 million change in accounts payable and accrued expenses due to timing of invoices and payments, $0.6 million of which relating to our September 2022 reduction in workforce, as well as a $3.0 million change in payables due to sellers primarily due to the timing of payments, and a $2.7 million change in operating lease liabilities due to the continued lease payments on our prior NYC headquarters.
Biggest changeOur changes in operating assets and liabilities were impacted by a negative change in operating lease liabilities of $2.8 million due to the continued lease payments on our prior NYC headquarters, a $1.5 million negative change in prepaid and other current assets primarily related to timing of prepayments including the current portion of a significant payment in the fourth quarter of 2023 relating to our platform hosting expense, and a $2.1 million negative change in other assets, primarily related to the long-term portion of the prepayment referenced above and the broker fee paid in connection with our subleasing of our prior NYC headquarters.
Gross profit has been, and will continue to be, affected by various factors, including leveraging economies of scale, the costs associated with hosting our platform, the level of amortization of our internal-use software, the fluctuations in shipping costs and our ability to pass these costs on to buyers, and the extent to which we expand our operations.
Gross profit has been, and will continue to be, affected by various factors, including leveraging economies of scale, the costs associated with hosting our platform, the level of amortization of our internal-use software, the fluctuations in shipping costs including our ability to pass these costs on to buyers, and the extent to which we expand our operations.
We also believe that the presentation of this non-GAAP financial measure provides an additional tool for investors to use in comparing our core business and results of operations over multiple periods with other companies in our industry, many of which present similar non-GAAP financial measures to investors, and to analyze our operating performance.
We also believe that the presentation of this non-GAAP financial measure provides an additional tool for investors to use in comparing our core 50 business and results of operations over multiple periods with other companies in our industry, many of which present similar non-GAAP financial measures to investors, and to analyze our operating performance.
General and Administrative General and administrative expenses include payroll, employee benefits, stock-based compensation, other headcount-related expenses associated with finance, legal, facility and human resources related personnel, lease expense, net of sublease income, business liability insurance, accounting, professional fees, and depreciation and amortization of property and equipment. We expense all general and administrative expenses as incurred.
General and Administrative General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related expenses associated with finance, legal, facility and human resources related personnel, lease expense, net of sublease income, business liability insurance, accounting, professional fees, and depreciation of property and equipment. We expense all general and administrative expenses as incurred.
Our future capital requirements will depend on many factors, including: • the emergence of competing online marketplaces and other adverse marketing developments; • the timing and extent of our sales and marketing and technology development expenditures; and • any investments, acquisitions or other similar strategic endeavors we may choose to pursue in the future.
Our future capital requirements will depend on many factors, including: • the emergence of competing online marketplaces and other adverse market developments; • the timing and extent of our sales and marketing and technology development expenditures; and • any investments, acquisitions or other similar strategic endeavors we may choose to pursue in the future.
While our significant accounting policies are described in greater detail in Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements, we believe that the following policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. Revenue Recognition We generate revenue from seller marketplace services and other services.
While our significant accounting policies are described in greater detail in Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements, we believe that the following policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. 53 Revenue Recognition We generate revenue from seller marketplace services and other services.
As our growth rates fluctuate or other unforeseen factors arise, the impact of these seasonality trends on our results of operations may become more or less pronounced. We enable fulfillment and shipping, but do not own or manage inventory. If our growth rates change, the impact of these seasonality trends on our results of operations may become more pronounced.
As our growth rates fluctuate or other unforeseen factors arise, the impact of these seasonality trends on our results of operations may become more or less pronounced. 51 We enable fulfillment and shipping, but do not own or manage inventory. If our growth rates change, the impact of these seasonality trends on our results of operations may become more pronounced.
Our historical performance for GMV may not be indicative of future performance in GMV. Number of Orders We define Number of Orders as the total number of orders placed or reported through the 1stDibs online marketplace in a given month, minus cancellations within that month.
Number of Orders We define Number of Orders as the total number of orders placed or reported through the 1stDibs online marketplace in a given month, minus cancellations within that month. Our historical performance for Number of Orders may not be indicative of future performance in Number of Orders.
The non-GAAP financial measures presented should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a 54 substitute for, comparable financial measures calculated in accordance with GAAP.
The non-GAAP financial measures presented should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with GAAP.
Cost of revenue also includes expenses associated with payroll, employee benefits, stock-based compensation, other headcount-related expenses associated with operations personnel supporting revenue-related operations and logistics, consulting costs, and amortization expense related to our capitalized internal-use software. In certain transactions where our shipping services are elected by sellers, we enable shipping of items purchased from the seller to the buyer.
Cost of revenue also includes expenses associated with payroll, employee benefits, stock-based compensation, other headcount-related expenses associated with personnel supporting revenue-related operations and logistics, consulting costs, and amortization expense related to our capitalized internal-use software. In certain transactions where our shipping services are elected by sellers, we facilitate shipping of items purchased from the seller to the buyer.
While these are non-cash charges, we may need to replace the assets being depreciated and amortized in the future and Adjusted EBITDA does not reflect cash requirements for these replacements or new capital expenditure requirements; • The exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be an important component of our compensation strategy; • The exclusion of other income, net, which includes interest income related to our cash, cash equivalents and short-term investments, interest expense, and realized and unrealized gains and losses on foreign currency exchange; • The exclusion of gain on sale of Design Manager, which is a one-time sale of our wholly owned subsidiary; and • The exclusion of strategic alternative expenses in connection with capital return strategies, buy- and sell-side mergers, acquisitions and partnerships, sale of a business or subsidiary, business optimization costs related to revisions of operational objectives and priorities, cost saving initiatives related to restructuring charges and integration costs, in all cases outside the ordinary course.
While these are non-cash charges, we may need to replace the assets being depreciated in the future and Adjusted EBITDA does not reflect cash requirements for these replacements or new capital expenditure requirements; • The exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be an important component of our compensation strategy; • The exclusion of other income, net, which includes interest income related to our cash, cash equivalents and short-term investments, and realized and unrealized gains and losses on foreign currency exchange; • The exclusion of gain on sale of Design Manager, which is a one-time sale of our wholly owned subsidiary; and • The exclusion of strategic alternative expenses in connection with capital return strategies, buy- and sell-side mergers, acquisitions and partnerships which include integration costs, sale of a business or subsidiary, business optimization costs related to revisions of operational objectives and priorities which include restructuring charges, in all cases outside the ordinary course.
Cash Flows from Investing Activities Net cash used in investing activities was $100.2 million for the year ended December 31, 2023, and was primarily due to $191.1 million of purchases of short-term investments, offset by $92.7 million of maturities of short-term investments.
Net cash used in investing activities was $100.2 million for the year ended December 31, 2023, and was primarily due to $191.1 million of purchases of short-term investments, offset by $92.7 million of maturities of short-term investments.
While management believes that our current cash, cash equivalents and short-term investments are sufficient to fund our operating expenses, capital expenditure requirements and any potential share repurchases under the Stock Repurchase Program for at least the next 12 months, we may need to borrow funds or raise additional equity to achieve our longer-term business objectives.
While management believes that our current cash, cash equivalents and short-term investments are sufficient to fund our operating expenses, capital expenditure requirements and any anticipated share repurchases under the 2024 Stock Repurchase Program for at least the next 12 months, we may need to borrow funds or raise additional equity to achieve our longer-term business objectives.
We expect operating losses and negative cash flows from operations to continue in the foreseeable future as we continue to strategically invest in growth activities. Our principal use of cash is to fund our operations including platform development to support our strategic initiatives and potential share repurchases under the Stock Repurchase Program.
We expect operating losses and negative cash flows from operations to continue in the foreseeable future as we continue to strategically invest in growth activities. Our principal use of cash is to fund our operations including platform development to support our strategic initiatives and anticipated share repurchases under the 2024 Stock Repurchase Program.
Our online marketplace seller stock value, the sum of the listed stock value of all available products listed on our online marketplace, was consistent year over year and exceeded $10.0 billion as of both December 31, 2023 and 2022. An individual listing’s stock value is calculated as the item’s current price multiplied by its quantity available for sale.
Our online marketplace seller stock value, the sum of the listed stock value of all available products listed on our online marketplace, remained consistent year over year and exceeded $10.0 billion as of both December 31, 2024 and 2023. An individual listing’s stock value is calculated as the item’s current price multiplied by its quantity available for sale.
As of December 31, 2023, we had 6.3 million users compared to 5.5 million as of December 31, 2022, and approximately 1.7 million listings, compared to 1.5 million as of December 31, 2022. Users represent non-seller visitors who register on our website, including both buyers and prospective buyers, and are identified by a unique email address.
As of December 31, 2024, we had 7.0 million users compared to 6.3 million as of December 31, 2023, and approximately 1.8 million listings, compared to 1.7 million as of December 31, 2023. Users represent non-seller visitors who register on our website, including both buyers and prospective buyers, and are identified by a unique email address.
Listing fees accounted for 4%, 2%, and 2% of our net revenue in the years ended December 31, 2023, 2022, and 2021, respectively.
Listing fees accounted for 3%, 4%, and 2% of our net revenue in the years ended December 31, 2024, 2023, and 2022, respectively.
We enable fulfillment and shipping, but do not take ownership of or manage inventory. 50 Gross Profit and Gross Margin Gross profit is net revenue less cost of revenue, and gross margin is gross profit as a percentage of net revenue.
We facilitate fulfillment and shipping, but do not take ownership of or manage inventory. 46 Gross Profit and Gross Margin Gross profit is net revenue less cost of revenue, and gross margin is gross profit as a percentage of net revenue.
By disrupting the way these items are bought and sold, we are both expanding access to, and growing the market for, luxury design products. 1stDibs began in 2000 with the vision of bringing the magic of the Paris flea market online by creating a listings site for top vintage and antique furniture sellers.
By disrupting the way these items are bought and sold, we are both expanding access to, and growing the market for, luxury design. 1stDibs began over two decades ago with the vision of bringing the magic of the Paris flea market online by creating a listings site for top vintage and antique furniture sellers.
We evaluate whether it is appropriate to recognize revenue on a gross or net basis based upon our evaluation of whether we obtain control of the specified goods or services by considering if we are primarily responsible for fulfillment of the promise, have inventory risk, or have latitude in establishing pricing and selecting suppliers, among other factors. 57 Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization.
We evaluate whether it is appropriate to recognize revenue on a gross or net basis based upon our evaluation of whether we obtain control of the specified goods or services by considering if we are primarily responsible for fulfillment of the promise, have inventory risk, or have latitude in establishing pricing and selecting suppliers, among other factors.
The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA: Year Ended December 31, (in thousands) 2023 2022 2021 Net loss $ (22,699) $ (22,538) $ (20,963) Depreciation and amortization 2,278 2,710 3,112 Stock-based compensation expense 12,363 11,214 2,839 Other income, net (8,342) (3,376) (1,502) Provision for income taxes 14 37 21 Gain on sale of Design Manager — (9,684) — Strategic alternative expenses 3,046 967 — Adjusted EBITDA (unaudited) $ (13,340) $ (20,670) $ (16,493) Seasonality We have historically experienced increased sales during the fourth quarter holiday shopping season compared to the other quarters which has generally resulted in increased GMV and net revenue during the fourth quarter of each fiscal year.
The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA: Year Ended December 31, (in thousands) 2024 2023 2022 Net loss $ (18,633) $ (22,699) $ (22,538) Depreciation and amortization 1,986 2,278 2,710 Stock-based compensation expense 14,776 12,363 11,214 Other income, net (7,626) (8,342) (3,376) Provision for income taxes 44 14 37 Gain on sale of Design Manager — — (9,684) Strategic alternative expenses 1,444 3,046 967 Adjusted EBITDA (unaudited) $ (8,009) $ (13,340) $ (20,670) Seasonality We have historically experienced increased sales during the fourth quarter holiday shopping season compared to the other quarters which has generally resulted in increased GMV and net revenue during the fourth quarter of each fiscal year.
Seller marketplace services primarily consist of marketplace transactions, subscriptions, and listing fees. Other services primarily consist of advertising revenues generated from displaying ads on our online marketplace.
Seller marketplace services primarily consist of marketplace transactions, subscriptions, and listing fees. Other services consist of other charges to our sellers including advertising revenues generated from displaying ads on our online marketplace.
Growth and Retention of our Active Buyers Our success depends in part on our ability to grow and retain our Active Buyer base. Our number of Active Buyers was 60,716 as of December 31, 2023 compared to 67,598 as of December 31, 2022.
Growth and Retention of our Active Buyers Our success depends in part on our ability to grow and retain our Active Buyer base. Our number of Active Buyers was 64,306 as of December 31, 2024 compared to 60,716 as of December 31, 2023.
Our marketplace transaction fees represent the majority of our net revenue and accounted for 71% of our net revenue in each of the years ended December 31, 2023, 2022, and 2021.
Our marketplace transaction fees represent the majority of our net revenue and accounted for 74%, 71%, and 71% of our net revenue in the years ended December 31, 2024, 2023, and 2022, respectively.
The provision for transaction losses also includes bad debt expense associated with our accounts receivable balance. 51 Results of Operations The following table summarizes our results of operations for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 2021 Net revenue $ 84,684 $ 96,849 $ 102,731 Cost of revenue 25,111 29,670 32,167 Gross profit 59,573 67,179 70,564 Operating expenses: Sales and marketing 36,640 44,776 47,414 Technology development 21,644 24,437 19,110 General and administrative 28,587 27,594 21,293 Provision for transaction losses 3,729 5,933 5,191 Gain on sale of Design Manager — (9,684) — Total operating expenses 90,600 93,056 93,008 Loss from operations (31,027) (25,877) (22,444) Other income, net: Interest income 6,639 1,606 146 Interest expense — (11) (16) Other, net 1,703 1,781 1,372 Total other income, net 8,342 3,376 1,502 Net loss before income taxes (22,685) (22,501) (20,942) Provision for income taxes (14) (37) (21) Net loss $ (22,699) $ (22,538) $ (20,963) The following table summarizes our results of operations as a percentage of net revenue for the periods indicated: Year Ended December 31, 2023 2022 2021 Net revenue 100 % 100 % 100 % Cost of revenue 30 31 31 Gross profit 70 69 69 Operating expenses: Sales and marketing 43 46 46 Technology development 26 25 19 General and administrative 34 29 21 Provision for transaction losses 4 6 5 Gain on sale of Design Manager — (10) — Total operating expenses 107 96 91 Loss from operations (37) (27) (22) Other income, net: Interest income 8 2 — Interest expense — — — Other, net 2 2 2 Total other income, net 10 4 2 Net loss before income taxes (27) (23) (20) Provision for income taxes — — — Net loss (27) % (23) % (20) % 52 Comparison of the Years Ended December 31, 2023 and 2022 Net Revenue Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Net revenue $ 84,684 $ 96,849 $ (12,165) (13) % Net revenue was $84.7 million for the year ended December 31, 2023, as compared to $96.8 million for the year ended December 31, 2022.
The provision for transaction losses also includes bad debt expense associated with our accounts receivable balance. 47 Results of Operations The following table summarizes our results of operations for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 2022 Net revenue $ 88,257 $ 84,684 $ 96,849 Cost of revenue 24,831 25,111 29,670 Gross profit 63,426 59,573 67,179 Operating expenses: Sales and marketing 38,084 36,640 44,776 Technology development 21,165 21,644 24,437 General and administrative 27,372 28,587 27,594 Provision for transaction losses 3,020 3,729 5,933 Gain on sale of Design Manager — — (9,684) Total operating expenses 89,641 90,600 93,056 Loss from operations (26,215) (31,027) (25,877) Other income, net: Interest income 5,942 6,639 1,606 Interest expense — — (11) Other, net 1,684 1,703 1,781 Total other income, net 7,626 8,342 3,376 Net loss before income taxes (18,589) (22,685) (22,501) Provision for income taxes (44) (14) (37) Net loss $ (18,633) $ (22,699) $ (22,538) The following table summarizes our results of operations as a percentage of net revenue for the periods indicated: Year Ended December 31, 2024 2023 2022 Net revenue 100 % 100 % 100 % Cost of revenue 28 30 31 Gross profit 72 70 69 Operating expenses: Sales and marketing 43 43 46 Technology development 24 26 25 General and administrative 31 34 29 Provision for transaction losses 4 4 6 Gain on sale of Design Manager — — (10) Total operating expenses 102 107 96 Loss from operations (30) (37) (27) Other income, net: Interest income 7 8 2 Interest expense — — — Other, net 2 2 2 Total other income, net 9 10 4 Net loss before income taxes (21) (27) (23) Provision for income taxes — — — Net loss (21) % (27) % (23) % 48 Comparison of the Years Ended December 31, 2024 and 2023 Net Revenue Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Net revenue $ 88,257 $ 84,684 $ 3,573 4 % Net revenue was $88.3 million for the year ended December 31, 2024, as compared to $84.7 million for the year ended December 31, 2023.
General and Administrative Year Ended December 31, (in thousands) 2023 2022 $ Change % Change General and administrative $ 28,587 $ 27,594 $ 993 4 % General and administrative expense was $28.6 million for the year ended December 31, 2023, as compared to $27.6 million for the year ended December 31, 2022.
General and Administrative Year Ended December 31, (in thousands) 2024 2023 $ Change % Change General and administrative $ 27,372 $ 28,587 $ (1,215) (4) % General and administrative expense was $27.4 million for the year ended December 31, 2024, as compared to $28.6 million for the year ended December 31, 2023.
Subscription fees accounted for 24% of our net revenue for each of the years ended December 31, 2023 and 2022.
Subscription fees accounted for 22%, 24%, and 24% of our net revenue in the years ended December 31, 2024, 2023, and 2022, respectively.
However, in the years ended December 31, 2023, and 2022 we have not experienced meaningful increases and in some recent periods we have seen decreases in GMV and net revenue in the fourth quarter, as we believe they have been adversely impacted, both directly and indirectly, by macroeconomic factors.
However, in the years ended December 31, 2023 and 2022 we did not experience meaningful increases and had seen decreases in GMV and net revenue in the fourth quarter, as we believed they had been adversely impacted, both directly and indirectly, by macroeconomic factors.
Our cost of revenue and sales and marketing expenses generally follow this trend, with our highest costs being incurred in the fourth quarter; however, similar to net revenue and GMV, cost of revenue and sales and marketing expenses have not followed this trend for the years ended December 31, 2023 and 2022 due to macroeconomic factors.
Our cost of revenue and sales and marketing expenses generally follow this trend, with our highest costs being incurred in the fourth quarter; but similar to GMV and net revenues, cost of revenue and sales and marketing expenses have not followed this trend in the prior years due to macroeconomic factors.
In the year ended December 31, 2023, we generated a net loss of $(22.7) million and Adjusted EBITDA of $(13.3) million, compared to a net loss of $(22.5) million and Adjusted EBITDA of $(20.7) million for the year ended December 31, 2022.
In the year ended December 31, 2024, we generated a net loss of $18.6 million and Adjusted EBITDA of $8.0 million, compared to a net loss of $22.7 million and Adjusted EBITDA of $13.3 million for the year ended December 31, 2023.
See “Non-GAAP Financial Measures” for more information and for a reconciliation of net loss to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP. Restructuring Charges In June 2023, we announced a workforce reduction designed to reduce operating costs and realign investment priorities involving the reduction of approximately 20% of the Company’s global workforce.
See “Non-GAAP Financial Measures” for more information and for a reconciliation of net loss to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP. Restructuring Charges In September 2022, we announced and implemented a restructuring plan to reduce operational costs and realign investment priorities involving the reduction of approximately 10% of our workforce.
Gross Profit and Gross Margin Gross profit was $59.6 million and gross margin was 70.3% for the year ended December 31, 2023, as compared to gross profit of $67.2 million and gross margin of 69.4% for the year ended December 31, 2022.
Gross Profit and Gross Margin Gross profit was $63.4 million and gross margin was 71.9% for the year ended December 31, 2024, as compared to gross profit of $59.6 million and gross margin of 70.3% for the year ended December 31, 2023.
Our historical performance for Number of Orders may not be indicative of future performance in Number of Orders. Active Buyers We define Active Buyers as buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations.
Active Buyers We define Active Buyers as buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations.
The decrease of $2.2 million, or 37%, was primarily driven by a decrease in damage claims as a result of the decrease in GMV as well as new policies implemented in partnership with our carriers.
The decrease of $0.7 million, or 19%, was primarily driven by a decrease in damage claims as a result of new policies implemented by us and in partnership with our carriers.
The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the fair value of our common stock, expected stock price volatility, the expected term of the award, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.
We have not issued any stock options during the years ended December 31, 2024 or 2023; however, for stock options issued prior, the fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the closing price of the Company's common stock on the grant date, expected stock price volatility, the expected term of the award, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.
Liquidity and Capital Resources As of December 31, 2023, we had cash, cash equivalents and short-term investments of $139.3 million and an accumulated deficit of $313.7 million. Net cash used in operating activities was $13.6 million in the year ended December 31, 2023.
Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and short-term investments of $103.9 million and an accumulated deficit of $332.4 million. Net cash used in operating activities was $2.9 million in the year ended December 31, 2024.
We also intend to continue strategically investing in our technology development efforts to improve and expand our platform. We expect the majority of our technology development expenses will result from consulting and/or headcount-related expenses. We expect provision for transaction losses to vary based on fluctuations in GMV.
We expect the majority of our technology development expenses will result from consulting and/or headcount-related expenses. We also intend to continue making strategic investments in marketing to drive future net revenue growth. We expect provision for transaction losses to vary based on fluctuations in GMV.
As a result of the reduction, we incurred approximately $2.0 million in restructuring charges during the year ended December 31, 2023, consisting primarily of employee severance and benefits costs. We do not expect to incur any significant additional charges related to restructuring in the fiscal year ended December 31, 2023.
As a result of the reduction, we incurred approximately $2.0 million in restructuring charges during the year ended December 31, 2023, consisting primarily of employee severance and benefits costs. During the year ended December 31, 2024, the Company incurred $1.4 million of additional employee severance and benefits costs relating to a further workforce reduction.
Operating Expenses Sales and Marketing Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Sales and marketing $ 36,640 $ 44,776 $ (8,136) (18) % Sales and marketing expense was $36.6 million for the year ended December 31, 2023, as compared to $44.8 million for the year ended December 31, 2022.
Operating Expenses Sales and Marketing Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Sales and marketing $ 38,084 $ 36,640 $ 1,444 4 % Sales and marketing expense was $38.1 million for the year ended December 31, 2024, as compared to $36.6 million for the year ended December 31, 2023.
Other Income, Net Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Total other income, net $ 8,342 $ 3,376 $ 4,966 147 % Other income, net was $8.3 million for the year ended December 31, 2023, as compared to $3.4 million for the year ended December 31, 2022.
Other Income, Net Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Total other income, net $ 7,626 $ 8,342 $ (716) (9) % Other income, net was $7.6 million for the year ended December 31, 2024, as compared to $8.3 million for the year ended December 31, 2023.
The decrease of $2.8 million, or 11%, was primarily due to a $2.3 million decrease in salaries and benefits and a $0.5 million decrease in stock-based compensation expense, both resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023.
The decrease of $0.5 million, or 2%, was primarily driven by a $1.0 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023, which were partially offset by annual compensation increases in March, including a $0.3 million increase in stock-based compensation expense.
As of December 31, 2023, 823,483 shares have been purchased for a total cost of $3.5 million since the commencement of the program and approximately $16.5 million remains available for future purchases under the program.
Stock Repurchase Program As of December 31, 2024, 6,443,522 shares have been purchased for a total cost of $31.6 million since the commencement of both our 2023 and 2024 stock repurchase programs and approximately $3.8 million remains available for future purchases under the 2024 Stock Repurchase Program.
Year Ended December 31, (dollars in thousands) 2023 2022 2021 GMV $ 362,316 $ 425,375 $ 447,471 Number of Orders 133,072 148,399 158,061 Active Buyers 60,716 67,598 72,420 Adjusted EBITDA (unaudited) $ (13,340) $ (20,670) $ (16,493) Gross Merchandise Value We define GMV as the total dollar value from items sold by our sellers through 1stDibs in a given month, minus cancellations within that month, and excluding shipping and sales taxes.
These key operating and financial metrics may vary from period to period and should not be viewed as indicative of other metrics. 44 Year Ended December 31, (dollars in thousands) 2024 2023 2022 GMV $ 362,274 $ 362,316 $ 425,375 Number of Orders 139,239 133,072 148,399 Active Buyers 64,306 60,716 67,598 Adjusted EBITDA (unaudited) $ (8,009) $ (13,340) $ (20,670) Gross Merchandise Value We define GMV as the total dollar value from items sold by our sellers through 1stDibs in a given month, minus cancellations within that month, and excluding shipping and U.S. sales taxes.
Additionally, some sellers have no monthly subscription fees and higher commission rates, however, we no longer offer this option to new sellers. Listing fee revenue is collected when sellers pay us for promoting certain products on their behalf and at their discretion through our online marketplace. Advertisements consist of impression-based ads displayed on our online marketplace on the seller’s behalf.
Listing fee revenue is collected when sellers pay us for promoting certain products on their behalf and at their discretion through our online marketplace. Advertisements consist of impression-based ads displayed on our online marketplace on the seller’s behalf.
Cost of Revenue Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Cost of revenue $ 25,111 $ 29,670 $ (4,559) (15) % Cost of revenue was $25.1 million for the year ended December 31, 2023, as compared to $29.7 million for the year ended December 31, 2022.
Cost of Revenue Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Cost of revenue $ 24,831 $ 25,111 $ (280) (1) % Cost of revenue was $24.8 million for the year ended December 31, 2024, as compared to $25.1 million for the year ended December 31, 2023.
Provision for Transaction Losses Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Provision for transaction losses $ 3,729 $ 5,933 $ (2,204) (37) % Provision for transaction losses was $3.7 million for the year ended December 31, 2023, as compared to $5.9 million for the year ended December 31, 2022.
Provision for Transaction Losses Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Provision for transaction losses $ 3,020 $ 3,729 $ (709) (19) % Provision for transaction losses was $3.0 million for the year ended December 31, 2024, as compared to $3.7 million for the year ended December 31, 2023.
Depreciation and amortization are computed using the straight-line method over the estimated useful lives.
Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives.
Net Cash provided by financing activities was $2.0 million for the year ended December 31, 2022 related to the proceeds from the exercise of stock options. Off-Balance Sheet Arrangements For the periods presented, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Net cash used in financing activities was $3.6 million for the year ended December 31, 2023 due mainly to the purchase of $3.4 million of our common stock as part of our 2023 Stock Repurchase Program. Off-Balance Sheet Arrangements For the periods presented, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
We have a commission fee structure that is a function of the item’s category and price. Our commission fees range from 5% to 50% of GMV and processing fees are 3% of the buyer’s total payment, net of expected refunds.
Our commission fees range from 5% to 50% of GMV and we charge processing fees, which are approximately 3% of the buyer’s total payment, net of expected refunds.
We categorize buyers into cohorts based on the date of their first purchase on the 1stDibs platform. GMV attributed to a buyer cohort represents the total dollar value from items purchased by that buyer cohort in a given period, minus cancellations within that period and excluding shipping and sales taxes.
GMV attributed to a buyer cohort represents the total dollar value from items purchased by that buyer cohort in a given period, minus cancellations within that period and excluding shipping and U.S. sales taxes.
Accordingly, these non-GAAP financial measures should be considered as supplemental in nature, and are not intended, and should not be construed, as a substitute for the related financial information calculated in accordance with GAAP.
Accordingly, these non-GAAP financial measures should be considered as supplemental in nature, and are not intended, and should not be construed, as a substitute for the related financial information calculated in accordance with GAAP. These limitations of Adjusted EBITDA include the following: • The exclusion of certain recurring, non-cash charges, such as depreciation and amortization of property and equipment.
Revenue is recognized as we transfer control of promised goods or services transfers to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
Revenue is recognized as we transfer control of promised goods or services to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Control is transferred when the buyer and seller have agreed to the sale. We do not obtain legal title to or control the goods being purchased.
There was also a $1.1 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023. 53 Technology Development Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Technology development $ 21,644 $ 24,437 $ (2,793) (11) % Technology development expense was $21.6 million for the year ended December 31, 2023, as compared to $24.4 million for the year ended December 31, 2022.
This increase was partially offset by a $1.0 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023, partially offset by annual compensation increases in March. 49 Technology Development Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Technology development $ 21,165 $ 21,644 $ (479) (2) % Technology development expense was $21.2 million for the year ended December 31, 2024, as compared to $21.6 million for the year ended December 31, 2023.
We had no Active Buyers who represented 5% or more of on-platform GMV for the years ended December 31, 2023 or 2022. Active Buyers drive our on-platform GMV and net revenue and contribute to the network effects that allow us to attract new sellers and exclusive inventory.
Active Buyers drive our on-platform GMV and net revenue and contribute to the network effects that allow us to attract new sellers and exclusive inventory. 45 During the year ended December 31, 2024, we retained 23% of the 2023 on-platform GMV from buyers acquired in 2023; consistent with the year ended December 31, 2023, where we also retained 23% of the 2022 on-platform GMV from buyers acquired in 2022.
Marketplace transaction fees are collected when sellers pay us commissions ranging from 5% to 50% of GMV and processing fees are 3% of the buyer’s total payment, net of expected refunds. If a seller accepts a return or refund of an on-platform purchase, the related commission and processing fees are refunded.
Seller marketplace services primarily consist of marketplace transactions, subscriptions, and listing fees. Marketplace transaction fees are collected when sellers pay us commissions ranging from 5% to 50% of GMV, and processing fees, which are approximately 3% of the buyer’s total payment, net of expected refunds.
Expected volatility was calculated based on the implied volatilities from market comparisons of certain publicly traded companies and other factors. The expected option term was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as we do not have sufficient historical data to develop an estimate based on participant behavior.
The expected option term was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as we did not have sufficient historical data to develop an estimate based on participant behavior at the time of the latest stock option grant. The risk-free interest rate was based on the U.S.
We anticipate that gross margin may fluctuate from quarter to quarter based on variability in the costs associated with hosting our online marketplace and supporting order processing. 55 We intend to continue making strategic investments in marketing to drive future net revenue growth.
We anticipate that gross margin may fluctuate from quarter to quarter based on variability in the costs associated with hosting our online marketplace and supporting order processing. We intend to continue strategically investing in our technology development efforts, inclusive of investments in machine learning and artificial intelligence, to improve and expand our platform.
Other Services Other services consist of advertisements and, prior to the sale of Design Manager, software services and accounted for 1%, 3% and 4% of our net revenue in the years ended December 31, 2023, 2022, and 2021, respectively. Advertising revenue is generated when impression-based ads are displayed on our online marketplace on our sellers’ behalf.
Other Services Other services consist of other charges to our sellers including advertising revenues generated from displaying ads on our online marketplace and accounted for 1%, 1% and 3% of our net revenue in the years ended December 31, 2024, 2023, and 2022, respectively.
GMV was $362.3 million for the year ended December 31, 2023 compared to $425.4 million for the year ended December 31, 2022, a decrease of 15%. Our net revenue was $84.7 million for the year ended December 31, 2023, compared to $96.8 million for the year ended December 31, 2022, a decrease of 13%.
GMV remained flat year over year and was $362.3 million for each of the years ended December 31, 2024 and 2023. Our net revenue was $88.3 million for the year ended December 31, 2024, compared to $84.7 million for the year ended December 31, 2023, an increase of 4%.
If we are unable to raise additional capital when we need it, it could harm our business, results of operations, and financial condition. Stock Repurchase Program In August 2023, the Board of Directors authorized a Stock Repurchase Program to repurchase up to an aggregate of $20.0 million of our common stock.
If we are unable to raise additional capital when we need it, it could harm our business, results of operations, and financial condition.
The decrease of $4.6 million, or 15%, was primarily due to a $1.5 million decrease in credit card processing fees due to the decrease in GMV, and a $1.4 million decrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023.
The decrease of $0.3 million, or 1%, was primarily driven by a $0.5 million decrease in salaries and benefits resulting from decreases in average headcount from the prior period, primarily related to our reduction in workforce in June 2023, partially offset by annual compensation increases in March.
We believe we are a leading online marketplace for these luxury design products based on the aggregate number of such listings on our online marketplace and our Gross Merchandise Value (“GMV”). Our thoroughly vetted seller base, in-depth marketing content, and custom-built technology platform create trust in our brand and facilitate high-consideration purchases.
We believe we are a leading online marketplace for these luxury design items based on the aggregate number of listings on our online marketplace and our Gross Merchandise Value (“GMV”).
We regularly review and may adjust our processes for calculating these metrics to 47 improve their accuracy. These key operating and financial metrics may vary from period to period and should not be viewed as indicative of other metrics.
We regularly review and may adjust our processes for calculating these metrics to improve their accuracy.
As a result of the reduction, we incurred approximately $0.7 million in restructuring charges in the year ended December 31, 2022, consisting primarily of employee severance and benefits costs. As of December 31, 2022, the restructuring plan was completed. Sale of Design Manager On June 29, 2022, we sold 100% of our equity interest in Design Manager for $14.8 million.
As a result of the reduction, we incurred approximately $0.7 million in restructuring charges in the year ended December 31, 2022, consisting primarily of employee severance and benefits costs. In June 2023, we announced a workforce reduction designed to further reduce operating costs and further realign investment priorities involving the reduction of approximately 20% of our global workforce.
On-platform GMV accounted for $346.6 million, or 96%, $409.4 million, or 96%, and $432.6 million, or 97% of GMV in the years ended December 31, 2023, 2022 and 2021, respectively. We view GMV as a measure of the total economic activity generated by our online marketplace and as an indicator of the scale, growth, and health of our online marketplace.
On-platform GMV accounted for $346.3 million, or 96% , $346.6 million, or 96%, and $409.4 million, or 96%, of GMV in the years ended December 31, 2024, 2023 and 2022, respectively.
Subscriptions provide access to our online marketplace, allowing sellers, who are our customers, to execute successful purchase transactions with buyers.
If a seller accepts a return or refund of an on-platform purchase, the related commission and processing fees are refunded. Subscriptions provide access to our online marketplace, allowing sellers, who are our customers, to execute successful purchase transactions with buyers.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 Net cash used in operating activities $ (13,556) $ (27,914) Net cash (used in) provided by investing activities (100,232) 12,641 Net cash (used in) provided by financing activities (3,629) 2,035 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 349 (278) Net (decrease) increase in cash, cash equivalents, and restricted cash $ (117,068) $ (13,516) Cash Flows from Operating Activities Net cash used in operating activities was $13.6 million for the year ended December 31, 2023, and was driven primarily by net revenue decreasing at a faster pace than operating expenses as described in the “Results of Operations” section.
Net cash used in operating activities was $13.6 million for the year ended December 31, 2023, and was driven primarily by net revenue decreasing at a faster pace than operating expenses as described in the “Results of Operations” section.
Seller Marketplace Services Seller marketplace services consist of marketplace transactions, subscriptions, and listings, and accounted for substantially all of our net revenue in the years ended December 31, 2023, 2022, and 2021, respectively. Marketplace Transaction Fees Our sellers pay us a commission and processing fee for the successful sale of an item listed on our online marketplace.
Our Business Model We generate revenue primarily from fees from our seller marketplace services as well as other services, including advertisements. 43 Seller Marketplace Services Seller marketplace services consist of marketplace transactions, subscriptions, and listings, and accounted for substantially all of our net revenue in the years ended December 31, 2024, 2023, and 2022, respectively.
Cash Flows from Financing Activities Net cash used in financing activities was $3.6 million for the year ended December 31, 2023, due mainly to the purchase of $3.4 million of our common stock as part of our Stock Repurchase Program.
Cash Flows from Financing Activities Net cash used in financing activities was $30.7 million for the year ended December 31, 2024, and was driven primarily by $27.7 million in purchases of our common stock as part of our 2023 and 2024 stock repurchase programs and $3.8 million of payments for taxes related to net share settlements of stock-based compensation awards, partially offset by $0.8 million in proceeds from the exercise of stock options.
The increase of $5.0 million, or 147%, was primarily driven by an increase in interest income due to our shift in investment strategies in cash, cash equivalents and short-term investments providing higher rates of return.
The decrease of $0.7 million, or 9%, was due primarily to interest income on our cash, cash equivalents, and short-term investments which decreased in the current year due to less cash, cash equivalents, and short-term investments as well as lower interest rates.
The risk-free interest rate was based on the U.S. Treasury bond yield with an equivalent term. We have not paid dividends and have no foreseeable plans to pay dividends. The fair value of restricted stock units are estimated on the date of grant based on the fair value of our common stock.
Treasury bond yield with an equivalent term. We have not paid dividends and have no foreseeable plans to pay dividends.
The figures below represent our on-platform GMV from our online marketplace by buyer cohort for the year ended December 31, 2023. We expect the current macroeconomic factors to continue to negatively impact our operations into 2024. We plan to invest in strategic initiatives to drive supply growth through more sellers and listings.
The figures below represent our on-platform GMV from our online marketplace by buyer cohort for the year ended December 31, 2024.
Net cash provided by investing activities was $12.6 million for the year ended December 31, 2022 and was driven primarily by the $14.6 million of proceeds from the sale of Design Manager, partially offset by $1.9 million of development of internal use software.
Cash Flows from Investing Activities Net cash provided by investing activities was $22.3 million for the year ended December 31, 2024, and was driven primarily by $110.3 million maturities and sales of short-term investments, partially offset by $86.4 million purchases of short-term investments.
Additionally, some sellers have no monthly subscription fees and higher commission rates, however, we no longer offers this option to new sellers. Subscription fees accounted for 24%, 24%, and 23% of our net revenue in the years ended December 31, 2023, 2022, and 2021, respectively.
Subscription fees accounted for 22% and 24% of our net revenue for the years ended December 31, 2024 and 2023, respectively.
The total Number of Orders placed or reported through the 1stDibs online marketplace for the year ended December 31, 2023 was 133,072 compared to 148,399 for the year 48 ended December 31, 2022. Similar to GMV and net revenue, we believe these metrics have been negatively impacted, directly and indirectly, by macroeconomic factors.
The total Number of Orders placed or reported through the 1stDibs online marketplace was 139,239 for the year ended December 31, 2024, compared to 133,072 for the year ended December 31, 2023. We had no Active Buyers who represented 5% or more of on-platform GMV for the years ended December 31, 2024 or 2023.
In over two decades of operating history, we have strengthened our brand and deepened our seller relationships. We launched our e-commerce platform in 2013 and transitioned to a full e-commerce marketplace model in 2016. As of December 31, 2023, we operate an e-commerce marketplace with approximately 7,800 unique sellers, compared to approximately 5,600 as of December 31, 2022.
As of December 31, 2024, we operate an e-commerce marketplace with approximately 5,900 unique sellers, compared to approximately 7,800 as of December 31, 2023. In 2024, we shifted our seller acquisition strategy and monetization approach to concentrate on fewer, but more highly engaged sellers.
Soon thereafter, we moved our headquarters to New York City and focused primarily on adding U.S.-based sellers to our site. The quality of our initial seller base enabled us to build a reputation in the design industry as a trusted source for unique luxury design products.
The quality of our initial seller base enabled us to build a reputation in the design industry as a trusted source for unique luxury design. Since then, we have strengthened our brand as well as deepened and broadened our seller relationships. We launched our e-commerce platform in 2013 and transitioned to a full e-commerce marketplace model in 2016.
During the year ended December 31, 2023, we retained 23% of the 2022 on-platform GMV from buyers acquired in 2022; this is a decrease from the year ended December 31, 2022, where we retained 27% of the 2021 on-platform GMV from buyers acquired in 2021. We define new buyers as those who placed their first order on our online marketplace.
We define new buyers as those who placed their first order on our online marketplace. We categorize buyers into cohorts based on the date of their first purchase on the 1stDibs platform.
The increase of $1.0 million, or 4%, was primarily driven by a $1.5 million increase in stock-based compensation expense, and a $1.1 million increase in salaries and benefits, primarily due to our annual equity grants and compensation increases which occur each March and included additional bonuses awarded during the year ended December 31, 2023.
These decreases were partially offset by a $1.4 million increase in stock-based compensation expense, primarily due to equity grants which occur annually in March.
The decrease in gross profit was primarily driven by net revenue decreasing $7.6 million more than cost of revenue, as outlined above. The increase in gross margin percentage was primarily driven by a decrease in our cost of revenue, as explained above, decreasing at a faster pace than the decrease in net revenue.
The increase in gross profit and gross margin for the year ended December 31, 2024 was primarily driven by our initiatives to improve our take rates, contributing to an increase in net revenue, as well as our cost savings initiatives in the second half of 2023 which contributed to a decrease in our cost of revenue, as outlined above.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+2 added−1 removed5 unchanged
Biggest changeThe remainder of cash, cash equivalents and short-term investments are held for working capital purposes. We do not enter into investments for trading or speculative purposes. 58 Foreign Currency Risk Our net revenue is primarily denominated in U.S. dollars, Euros, and British pounds, depending on the currency selection of the seller.
Biggest changeForeign Currency Risk Our net revenue is primarily denominated in U.S. dollars, Euros, and British pounds, depending on the currency selection of the seller. Our cost of revenue and operating expenses are primarily denominated in U.S. dollars.
At times, our cash balances with individual banking institutions are in excess of federally insured limits. We have not experienced any credit losses related to our cash, cash equivalents, and short-term investments balances. Interest Rate Sensitivity Interest rate risk relates to the loss we could incur in our cash portfolios due to a change in interest rates.
At times, our cash balances with individual banking institutions are in excess of federally insured limits. We have not experienced any credit losses related to our cash, cash equivalents, and short-term investments balances. 54 Interest Rate Sensitivity Interest rate risk relates to the loss we could incur in our cash portfolios due to a change in interest rates.
This risk is mitigated by requiring upfront payment for many of our services and due to our diverse customer base, dispersed over various geographic regions and industrial sectors. For the years ended December 31, 2023 and 2022, no single customer accounted for more than 10% of our net revenue.
This risk is mitigated by requiring upfront payment for many of our services and due to our diverse customer base, dispersed over various geographic regions and industrial sectors. For the years ended December 31, 2024 and 2023, no single customer accounted for more than 10% of our net revenue.
Due to the nature of our cash, cash equivalents and short-term investments, we would expect a 100 basis point increase or decrease in interest rates would result in an approximate increase or decrease of $0.8 million in our cash, cash equivalents and short-term investments.
Due to the nature of our cash, cash equivalents and short-term investments, we would expect a hypothetical 100 basis point increase or decrease in interest rates to result in an approximate increase or decrease of $0.7 million in our cash, cash equivalents and short-term investments.
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe certain metrics, including our GMV and net revenue, have been negatively impacted, both directly and indirectly, by macroeconomic factors, including inflation and as a result significant capital market and housing market volatility.
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe certain metrics have been impacted, both directly and indirectly, by macroeconomic factors, including inflation and as a result significant capital market and housing market volatility.
We cannot assure you our business will not be affected in the future by inflation. 59
We cannot assure you our business will not be affected in the future by inflation. 55
As of December 31, 2023, we would expect an adverse 10% change in current exchange rates would result in no more than a $2.9 million decrease in net revenue. Credit Risk We are exposed to credit risk on accounts receivable balances.
As of December 31, 2024, we would expect an adverse 10% change in current exchange rates would result in no more than a $3.2 million decrease in net revenue for the year ended December 31, 2024. Credit Risk We are exposed to credit risk on accounts receivable balances.
Our cost of revenue and operating expenses are primarily denominated in U.S. dollars. As our online marketplace continues to grow globally, our results of operations and cash flows may be subject to fluctuations due to the change in foreign exchange rates.
As our online marketplace continues to grow globally, our results of operations and cash flows may be subject to fluctuations due to the change in foreign exchange rates.
Our principal use of cash, cash equivalents and short-term investments is to fund our operations including platform development to support our strategic initiatives. Additionally, in August 2023, the Board of Directors authorized a Stock Repurchase Program to repurchase up to an aggregate of $20.0 million of our common stock.
Our principal use of cash, cash equivalents and short-term investments is to fund our operations including platform development to support our strategic initiatives and anticipated share repurchases under the 2024 Stock Repurchase Program. The remainder of cash, cash equivalents and short-term investments are held for working capital purposes. We do not enter into investments for trading or speculative purposes.
Removed
As of December 31, 2023, we had cash, cash equivalents and short-term investments of $139.3 million. We generally hold our cash for immediate operating needs in non-interest bearing checking accounts and the majority of the remaining cash and cash equivalents are held in interest bearing money market funds.
Added
As of December 31, 2024, we had cash, cash equivalents and short-term investments of $103.9 million. Our cash and cash equivalents consist primarily of demand and money market accounts, as well as available-for-sale debt securities with an original maturity of 90 days or less. Our short-term investments consist primarily of U.S.
Added
Government agency and Treasury securities, as well as commercial paper and corporate notes which have an original maturity greater than 90 days and are highly liquid in nature.

Other DIBS 10-K year-over-year comparisons