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What changed in TheRealReal, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TheRealReal, Inc.'s 2024 and 2025 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 2025 report.

+261 added−290 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-21)

Top changes in TheRealReal, Inc.'s 2025 10-K

261 paragraphs added · 290 removed · 231 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAs of December 31, 2024, we had 3,011 full-time equivalent employees. Additionally, we rely on independent contractors and temporary personnel to supplement our workforce, primarily in our authentication centers. None of our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our relations with our employees to be positive.
Biggest changeHuman Capital Resources Our employees are guided by our mission to empower consignors and buyers to extend the life cycle of luxury goods. As of December 31, 2025, we had 3,140 full-time equivalent employees. Additionally, we rely on independent contractors and temporary personnel to supplement our workforce, primarily in our authentication centers.
We recognize that in addition to minimizing work-related injuries and illness, a safe and healthy work environment supports employee retention and morale and enhances the quality of products and services. We treat all applicable health and safety regulations as a minimum standard as we are committed to high standards for our working environments that protect the well-being of all employees.
We recognize that in addition to minimizing work-related injuries and illness, a safe and healthy work environment supports employee retention and morale and enhances the quality of products and services. We treat applicable health and safety regulations as a minimum standard as we are committed to high standards for our working environments that protect the well-being of all employees.
Our flagship stores are typically 8,000 to 10,000 square feet with thousands of unique items for sale and are located in highly desirable, densely populated locations with strong foot traffic. 5 Table of Contents Our Market The existing luxury resale market is outdated, fragmented, difficult to access and laden with counterfeit goods.
Our flagship stores are typically 8,000 to 10,000 5 Table of Contents square feet with thousands of unique items for sale and are located in highly desirable, densely populated locations with strong foot traffic. Our Market The existing luxury resale market is fragmented, difficult to access and laden with counterfeit goods.
Since our inception, we have cultivated a loyal and engaged consignor and buyer base through continuous investment in our technology platform, logistics infrastructure and people. We offer a wide selection of authenticated, primarily pre-owned luxury goods on our online marketplace bearing the brands of thousands of luxury and premium designers.
Since our inception, we have cultivated a loyal and engaged consignor and buyer base through continuous investment in our technology platform, logistics infrastructure, brand and people. We offer a wide selection of authenticated, primarily pre-owned luxury goods on our online marketplace bearing the brands of thousands of luxury and premium designers.
We continued to focus on employees’ overall well-being in 2024 through a range of programs that support access to care, along with resources and tools to address the following pillars of wellness: physical, mental/emotional, financial, and community. Corporate Information We were incorporated in the state of Delaware in March 2011.
We continued to focus on employees’ overall well-being in 2025 through a range of programs that support access to care, along with resources and tools to address the following pillars of wellness: physical, mental/emotional, financial, and community. Corporate Information We were incorporated in the state of Delaware in March 2011.
The top-selling luxury designers on our online marketplace include Cartier, Chanel, Christian Dior, Gucci, Hermès, Louis Vuitton, Prada, Rolex, Yves Saint Laurent, Tiffany & Co. and Van Cleef & Arpels. We offer products across multiple categories including women’s fashion, men’s fashion, jewelry and watches.
The top-selling luxury designers on our online marketplace include Cartier, Chanel, Christian Dior, Gucci, Hermès, Louis Vuitton, Prada, Rolex, Saint Laurent, Tiffany & Co., Van Cleef & Arpels and Bvlgari. We offer products across multiple categories including women’s fashion, men’s fashion, jewelry and watches.
We primarily rely on copyright and trade secret laws to protect our proprietary technologies and processes, including the algorithms we use throughout our business. Our principal trademark assets include the registered trademark “The RealReal” and our logos and taglines. Our trademarks are valuable assets that support our brand and consumers’ perception of our services and merchandise.
We rely on copyright, patent, and trade secret laws to protect our proprietary technologies and processes, including the algorithms we use throughout our business. Our principal trademark assets include the registered trademark “The RealReal” and our logos and taglines. Our trademarks are valuable assets that support our brand and consumers’ perception of our services and merchandise.
Our sales professionals remove friction from the consignment process and build lasting relationships with our consignors. In 2024, over 80% of our gross merchandise value ("GMV") came from repeat consignors. Our unique service model incentivizes consumers to consign by making the process easy.
Our sales professionals remove friction from the consignment process and build lasting relationships with our consignors. In 2025, over 80% of our gross merchandise value ("GMV") came from repeat consignors. Our unique service model incentivizes consumers to consign by making the process easy.
Our consignors can earn up to 90% of the proceeds from the sale of their consigned items in commissions and achieved an overall commission rate of approximately 62% in 2024. • We offer a range of payment options for consignors and businesses.
Our consignors can earn up to 90% of the proceeds from the sale of their consigned items in commissions and achieved an overall commission rate of approximately 62% in 2025. • We offer a range of payment options for consignors and businesses.
In 2024, we sold goods bearing the brands of thousands of luxury and premium designers, including highly coveted items such as rare watches and handbags. • We provide a gateway to luxury brands.
In 2025, we sold goods bearing the brands of thousands of luxury and premium designers, including highly coveted items such as rare watches and handbags. • We provide a gateway to luxury brands.
Our online marketplace generates and aggregates hundreds of millions of unique data points, including data from approximately 44.5 million item sales since our inception. Each consigned item also has up to 50 unique attributes. Informed by this data, we have developed proprietary machine learning technology and business processes to optimize our operations, including supply sourcing, merchandising, authentication, pricing and marketing.
Our online marketplace generates and aggregates hundreds of millions of unique data points, including data from over 50 million item sales since our inception. Each consigned item also has up to 50 unique attributes. Informed by this data, we have developed proprietary machine learning technology and business processes to optimize our operations, including supply sourcing, merchandising, authentication, pricing and marketing.
Information contained on, or that can be accessed through, our website is not incorporated by reference into this or any other report we file with, or furnish to, the SEC , and you should not consider information on our website to be part of this or any other report we file with, or furnish to, the SEC .
Information contained on, or that can be accessed through, our website is not incorporated by reference into this or any other report we file with, or furnish to, the SEC , and you should not consider information on our website to be part of 9 Table of Contents this or any other report we file with, or furnish to, the SEC .
Our principal executive offices are located at 55 Francisco Street, Suite 150, San Francisco, California 94133, and our telephone number is (855) 435-5893.
Our principal executive offices are located at 55 Francisco Street, Suite 400, San Francisco, California 94133, and our telephone number is (855) 435-5893.
We continually review our development efforts to assess the existence and patentability of new intellectual property and intend to pursue patent protection to the extent we believe it would be beneficial and cost-effective. We control access to and use of our intellectual property through confidentiality procedures, non-disclosure agreements with third parties and our employment and contractor agreements.
We continually review our development efforts to assess the existence and patentability of new intellectual property and pursue patent protection to the extent we believe it is beneficial and cost-effective. We control access to and use of our intellectual property through confidentiality procedures, non-disclosure agreements with third parties and our employment and contractor agreements.
Sell-through ratio is defined as GMV in the measurement period divided by the aggregate initial value of items added to our online marketplace in that period. Our online marketplace sell-through ratio in 2024 was approximately 85%. Our Buyers We make it easy for buyers to shop our vast, yet curated selection of authenticated, primarily pre-owned luxury goods.
Sell-through ratio is defined as GMV in the measurement period divided by the aggregate initial value of items added to our online marketplace in that period. Our online marketplace sell-through ratio in 2025 was over 80%. Our Buyers We make it easy for buyers to shop our vast, yet curated selection of authenticated, primarily pre-owned luxury goods.
We leverage our proprietary technology and data analytics to provide world-class service, making consignment easy, convenient, reliable and fast. As a result, we unlock luxury supply from first-time consignors, convert consignors who typically consign at local brick-and-mortar shops to our online marketplace and drive high repeat consignment rates.
Our sales team, enabled by our proprietary technology and data analytics, provides world-class service, making consignment easy, convenient, reliable and fast. As a result, we unlock luxury supply from first-time consignors, convert consignors who typically consign at local brick-and-mortar shops to our online marketplace and drive high repeat consignment rates.
In 2024, we had approximately 1 million active buyers and approximately 88% of our GMV came from repeat buyers. As we continue to unlock exclusive luxury supply, we aim to attract new buyers and drive repeat purchases from our existing buyers. • We offer a seamless buying experience.
In 2025, we had over 1 million active buyers and over 80% of our GMV came from repeat buyers. As we continue to unlock exclusive luxury supply, we aim to attract new buyers and drive repeat purchases from our existing buyers. • We offer a seamless buying experience.
Talent Development and Training We believe that the training and development of our employees is critical to our long-term success. We offer a variety of employee training programs, including training specific to business functions, enabling us to provide our consignors and buyers with a consistent luxury experience.
Talent Development and Training We believe that the training and development of our employees is critical to our long-term success. We offer a variety of employee training programs, including training specific to business functions, enabling us to provide our consignors and buyers with a consistent luxury experience. Our authentication teams receive training based on expertise level.
These smaller footprint neighborhood stores are located in areas we have identified as having a large amount of potential customers. In addition, we operate several larger footprint flagship stores in Los Angeles, California and New York, New York.
These smaller footprint neighborhood stores are located in areas we have identified as having a large amount of potential customers. These stores attract new customers and provide an in person consignment experience for our consignors. In addition, we operate several larger footprint flagship stores in San Francisco, California, Los Angeles, California and New York, New York.
The Sustainability Task Force, through several individual working groups, has concentrated its efforts on specific, meaningful topics, including preferred materials, transportation optimization, employee travel, employee experience, reducing energy expenditures, limiting use of packaging materials, and waste.
The Sustainability Task Force, through several individual working groups, has concentrated its efforts on specific, meaningful topics, including preferred materials, transportation optimization, employee travel, employee experience, reducing energy expenditures, limiting use of packaging materials, and waste. In 2025, the Sustainability Task Force continued to focus on projects related to packaging, employee engagement, and energy efficiency at our authentication centers.
We utilize state-of-the-art gemological devices, including proprietary gemstone technology, to assist these experts. Additionally, across all of our categories, our experts leverage proprietary item and consignor risk scoring algorithms to assist in authentication.
Our gemologists and horologists inspect and authenticate fine jewelry and watches, and each piece we sell comes with an authentication certificate. We utilize state-of-the-art gemological devices, including proprietary gemstone technology, to assist these experts. Additionally, across all of our categories, our experts leverage proprietary item and consignor risk scoring algorithms to assist in authentication.
This process includes, among other things, inspecting the item for attributes such as appropriate brand markings, date codes, serial tags and hologram stickers. We use proprietary artificial intelligence ("AI") microphotography to assist in authenticating multiple categories, including high-end handbags. Our gemologists and horologists inspect and authenticate fine jewelry and watches, and each piece we sell comes with an authentication certificate.
This process includes, among other things, inspecting the item for attributes such as appropriate brand markings, date codes, serial tags and hologram stickers. We use proprietary artificial intelligence ("AI") to assist in identifying and authenticating multiple categories. For instance, we use AI and microphotography to assist in authenticating high-end handbags.
We have built a vibrant online marketplace that we believe expands the overall luxury market, promotes the recirculation of luxury goods and contributes to a more sustainable world. A strong network effect drives the growth of our online marketplace.
We have built a vibrant online marketplace that we believe expands the overall luxury market, promotes the recirculation of luxury goods and contributes to a more sustainable world. The Company executes against three strategic pillars that amplify one another to drive sustainable, profitable growth.
Our scale and broad reach combined with our technology-driven online marketplace and proprietary data enable consignors to realize optimal value for their pre-owned luxury goods. In November 2022, we launched a pricing tool for our consignors that provides transparency and detail on commission rates for specific categories and other aspects of the take 6 Table of Contents rate structure.
Our scale and broad reach combined with our technology-driven online marketplace and proprietary data enable consignors to realize optimal value for 6 Table of Contents their pre-owned luxury goods.
Our Fair Labor Standards Act-exempt employees receive an annual performance review and our people managers have quarterly meetings with their employees to address performance and development, as appropriate. As a part of our onboarding program, we have developed an engagement monitoring plan for our employees in the form of personal check-ins and questionnaires.
Each employee receives training appropriate to the scope and nature of their role. As a part of our onboarding program, we have developed an engagement monitoring plan for our employees in the form of personal check-ins and questionnaires.
Removed
In 2024, the Sustainability Task Force was reorganized to expand its capabilities and increase its membership, and focused on projects related to packaging, employee engagement, and energy efficiency at our authentication centers. Human Capital Resources Our employees are guided by our mission to empower consignors and buyers to extend the life cycle of luxury goods.
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The three components are: unlocking supply through our growth playbook, driving operational efficiency aided by technology, automation, and proprietary data and obsessing over service for buyers and consignors. A strong network effect drives the growth of our online marketplace.
Removed
Community We work to inspire and empower our employees to think creatively and authentically, share their ideas, bring their whole selves to work, and strive for greatness every day.
Added
None of our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our relations with our employees to be positive. We conduct annual employee engagement surveys to better understand employees’ sentiment across a range of topics.
Removed
We are committed to providing an equal employment opportunity regardless of race, color, ancestry, religion, sex, national origin, sexual orientation, age, citizenship, marital status, disability, gender identity or expression, or veteran status. Strategy. We believe that creating a more sustainable future by growing the circular economy requires us to bring different perspectives together.
Removed
We believe that a more sustainable future is an equitable one, and that growing the circular economy requires us to unlock the power of differences and solve problems together in new and meaningful ways. We are committed to building a strong culture of trust, safety, collaboration, and belonging to fuel our purpose, people and performance. Engagement.
Removed
In 2024, we conducted our annual employee engagement survey to better understand employees’ sentiment across a range of topics and factors; management, teamwork, inclusion, and alignment, were among our top scoring factors. In 2024, our engagement efforts focused on well-being, leadership, communication, and inclusion.
Removed
As part of our work to build a culture of trust, we encourage employees to share real-time feedback on culture, bias, discrimination and harassment, or behavior that does not reflect our values and policies through our company-wide employee reporting tool. The RealReal, Inc. Foundation. The RealReal, Inc.
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Foundation was founded at the time of our initial public offering in 2019 with the aim of advancing equity in the communities in which we operate through access to education.
Removed
Since its formation, the foundation has provided annual college scholarships and supported numerous community organizations, including the Success Bound Youth Leadership Academy, the Secaucus Youth Alliance, Enterprise for Youth, Friendly House, Education Forward Arizona and the Virgil Abloh™ "Post-Modern" Scholarship Fund, which aims to preserve his vision for a more diverse and equitable fashion industry.
Removed
For example, we support our sales professionals by providing a three-week virtual onboarding sequence conducted through peer-to-peer, facilitated and self-learning sessions, followed by continuous professional development programs . 9 Table of Contents Our authentication teams receive training based on expertise level. Entry-level authenticators receive approximately 40 to 80 hours of training depending on their specialty in fashion or fine jewelry.
Removed
Progression through the authentication training program is an additional minimum of 80 hours of training and at least three months per level. Training hours and tenure increase with expertise, with a Graduate Gemologist certification from GIA required in the highest levels of specialty in fine jewelry. Each employee receives training appropriate to the scope and nature of their role.
Removed
In 2022, we implemented the REAL Respect program, which provides community guidelines for our employees, consignors and buyers aimed toward creating a positive and safe experience for all.
Removed
In 2023, we launched TRR Secure, a smartphone security application that enables field employees to discreetly contact emergency services via multiple channels if they are in a situation that makes them feel uneasy, unsafe or uncomfortable.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Our Merchandising and Fulfillment • We may not be able to attract, train and retain specialized personnel and skilled employees. • We may not be able to identify and lease authentication centers in suitable geographic regions. • We may experience damage or destruction to our authentication centers or retail stores in which we store of the majority of the consigned luxury goods we offer through our online marketplace. • Shipping is a critical part of our business and any changes in our shipping arrangements, costs, interruptions in shipping or damage to products in transit could adversely affect our operating results. • We may be unable to successfully leverage technology, including artificial intelligence and machine learning, to automate and drive efficiencies in our operations. 11 Table of Contents Risks Related to Data Security, Privacy and Fraud • We rely on third parties to host our website and mobile app and to process payments. • Failure of our data or cyber security could cause us to incur unexpected expenses or compromise our data assets. • We may incur significant losses from fraud.
Biggest changeRisks Related to Our Merchandising and Fulfillment • We may not be able to attract, train and retain specialized personnel and skilled employees. • We may not be able to identify and lease authentication centers in suitable geographic regions. • We may experience damage or destruction to our authentication centers or retail stores in which we store of the majority of the consigned luxury goods we offer through our online marketplace. • Shipping is a critical part of our business and any changes in our shipping arrangements, costs, interruptions in shipping or damage to products in transit could adversely affect our operating results. 11 Table of Contents • We may be unable to successfully leverage technology, including artificial intelligence and machine learning, to automate and drive efficiencies in our operations.
Risks Relating to Our Strategy • We may be unable to execute on our retail strategy. • Expansion of our operations internationally will require significant management attention and resources. • Our growth strategies may not be successful.
Risks Relating to Our Strategy • We may be unable to execute on our retail strategy. • Our growth strategies may not be successful. • Expansion of our operations internationally will require significant management attention and resources.
Risks Related to Our Employees • We may be unable to attract and retain key personnel or effectively manage leadership succession. • Labor-related matters, including labor disputes, may adversely affect our operations. Risks Related to Our Intellectual Property • If we cannot successfully protect our intellectual property, our business could suffer.
Risks Related to Our Leadership and Employees • We may be unable to attract and retain key personnel or effectively manage leadership succession. • Labor-related matters, including labor disputes, may adversely affect our operations. Risks Related to Our Intellectual Property • If we cannot successfully protect our intellectual property, our business could suffer.
As we grow our business, our revenue growth rates may continue to decline in future periods due to a number of factors, including our inability to attract and retain consignors, general economic conditions, including a recession, increased market adoption against which future growth will be measured, increasing competition, slowing demand for items on our online marketplace from existing and new customers, changes to our commission structure, take rate or business model, changes in our total product mix, including as a result of our strategic shift to focus on higher value items or our failure to capitalize on growth opportunities.
As we grow our business, our revenue growth rates may continue to decline in future periods due to a number of factors, which may include our inability to attract and retain consignors, general economic conditions, including a recession, increased market adoption against which future growth will be measured, increasing competition, slowing demand for items on our online marketplace from existing and new customers, changes to our commission structure, take rate or business model, changes in our total product mix, including as a result of our strategic shift to focus on higher value items or our failure to capitalize on growth opportunities.
The counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2025 Notes and the 2028 Notes (and are likely to do so on each exercise date of the capped call transactions), or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversions of the 2025 Notes and the 2028 Notes or otherwise.
The counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2028 Notes (and are likely to do so on each exercise date of the capped call transactions), or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversions of the 2028 Notes or otherwise.
For example, the California Consumer Privacy Act (the “CCPA”), that requires covered companies to provide disclosures to California consumers and afford such consumers qualified privacy rights, such as rights of access, deletion and to opt-out of the sales and "sharing" of their personal information, which relates to "cross context behavioral advertising" or more commonly known as targeted advertising.
For example, the California Consumer Privacy Act (the “CCPA”) requires covered companies to provide disclosures to California consumers and afford such consumers qualified privacy rights, such as rights of access, deletion and to opt-out of the sales and "sharing" of their personal information, which relates to "cross context behavioral advertising" or more commonly known as targeted advertising.
Risks Relating to Litigation and Regulatory Uncertainty • We are currently, and may be in the future, party to lawsuits and other claims. • Our use and other processing of personal information and other data is subject to laws and obligations. • Regulation of “cookie” tracking technologies or changes in such technologies could harm our business and operating results. • We pay or collect sales taxes in all jurisdictions which require such taxes. • Failure to comply with applicable laws or regulations may subject us to fines, penalties, loss of licensure, registration, facility closures or other governmental enforcement action. • Application of existing tax laws, rules or regulations are subject to interpretation by taxing authorities. • Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. • If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information.
Risks Relating to Litigation and Regulatory Uncertainty • We are currently, and may be in the future, party to lawsuits and other claims. • Our use and other processing of personal information and other data is subject to laws and obligations. • Regulation of “cookie” tracking technologies or changes in such technologies could harm our business and operating results. • We pay or collect sales taxes in all jurisdictions which require such taxes. • Failure to comply with applicable laws or regulations may subject us to fines, penalties, loss of licensure, registration, facility closures or other governmental enforcement action. • Applications of existing tax laws, rules or regulations are subject to interpretation of taxing authorities. • Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. • If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information.
These provisions include the following: • establish a classified board of directors so that not all directors are elected at one time; • permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • provide that directors may only be removed for cause; • require super-majority voting to amend some provisions in our certificate of incorporation and bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • prohibit stockholders from calling special meetings of stockholders; • prohibit stockholder action by written consent; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; • restrict the forum for certain litigation against us to Delaware; and 27 Table of Contents • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
These provisions include the following: • establish a classified board of directors so that not all directors are elected at one time; • permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • provide that directors may only be removed for cause; • require super-majority voting to amend some provisions in our certificate of incorporation and bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • prohibit stockholders from calling special meetings of stockholders; • prohibit stockholder action by written consent; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; • restrict the forum for certain litigation against us to Delaware; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Some of our competitors may have greater resources than we do, which may allow them to derive greater revenue and profits from their existing buyer bases, acquire consignors at lower costs, achieve more favorable total product mixes or respond more quickly than we can to new or emerging technologies, such as artificial intelligence, and changes in consumer shopping behavior or preferences.
Some of our competitors may have greater resources than we do, which may allow them to derive greater revenue and profits from their existing buyer bases, acquire consignors at lower costs, achieve more favorable total product mixes or respond more quickly than we can to new or emerging technologies, such as artificial intelligence and machine learning, and changes in consumer shopping behavior or preferences.
Any actual or perceived compromise of our systems or data security measures or those of third parties with whom we do business, or any failure to prevent or mitigate the loss of personal or other confidential information and delays in detecting or providing notice of any such compromise or loss could disrupt our operations, damage our reputation, cause some participants to decrease or stop their use of our online marketplace and subject us to litigation, government action, increased transaction 21 Table of Contents fees, remediation costs, regulatory fines or penalties or other additional costs and liabilities, as well as reputational impact, that could adversely affect our business, financial condition and operating results.
Any actual or perceived compromise of our systems or data security measures or those of third parties with whom we do business, or any failure to prevent or mitigate the loss of personal or other confidential information and delays in detecting or providing notice of any such compromise or loss could disrupt our operations, damage our reputation, cause some participants to decrease or stop their use of our online marketplace and subject us to litigation, government action, increased transaction fees, remediation costs, regulatory fines or penalties or other additional costs and liabilities, as well as reputational impact, that could adversely affect our business, financial condition and operating results.
Subject to certain exceptions and qualifications, the indenture governing our 2029 Notes (the “2029 Notes Indenture”) restricts our ability to, among other things, (i) grant or incur liens securing indebtedness; (ii) incur, assume or guarantee additional indebtedness; (iii) enter into transactions with affiliates; (iv) sell or otherwise dispose of assets, including capital stock of subsidiaries; (v) in the case of the Company and any future guarantor (if any), consolidate, amalgamate or merge with or into, or sell all or substantially all of its assets to, another person; (vi) make certain restricted payments or other investments; and (vii) pay dividends or make other distributions (including loans and other advances).
Subject to certain exceptions and qualifications, the 2029 Notes Indenture restricts our ability to, among other things, (i) grant or incur liens securing indebtedness; (ii) incur, assume or guarantee additional indebtedness; (iii) enter into transactions with affiliates; (iv) sell or otherwise dispose of assets, including capital stock of subsidiaries; (v) in the case of the Company and any future guarantor (if any), consolidate, amalgamate or merge with or into, or sell all or substantially all of its assets to, another person; (vi) make certain restricted payments or other investments; and (vii) pay dividends or make other distributions (including loans and other advances).
Such economic uncertainty and the resulting decrease in the rate of new luxury goods purchases in the primary market may have a corresponding impact on luxury resale, which could manifest in a number of ways, including fewer individuals choosing to consign their goods with us, resulting in a decrease of items available in our online marketplace, fewer individuals choosing to buy pre-owned luxury goods, resulting in lower active buyer growth and order volume, and lower AOV due to a combination of lower average selling price per item and/or fewer items per average order, any of which could have an adverse effect on our business and operating results.
Such economic uncertainty and the resulting decrease in the rate of new luxury goods purchases in the primary market may have a corresponding impact on luxury resale, which could manifest in a number of ways, including but not limited to fewer individuals choosing to consign their goods with us, resulting in a decrease of items available in our online marketplace, fewer individuals choosing to buy pre-owned luxury goods, resulting in lower active buyer growth and order volume, and lower AOV due to a combination of lower average selling price per item and/or fewer items per average order, any of which could have an adverse effect on our business and operating results.
The market price of our common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our consignor or buyer base, the level of consignor and buyer engagement, revenue or other operating results; • adverse economic and market conditions, including declines in consumer discretionary spending, currency fluctuations, inflation, disruptions in the financial industry and geopolitical instability; • the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors; • variations between our actual operating results and the expectations of securities analysts, investors and the financial community; • any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information or our failure to meet expectations based on this information; • additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales; • hedging activities by market participants; 26 Table of Contents • sudden increased or decreased interest in our stock from retail investors; • substantial fluctuations in the daily trading volume of our common stock; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; • changes in operating performance and stock market valuations of companies in our industry, including our competitors; • price and volume fluctuations in the stock market, including as a result of trends in the economy; • lawsuits threatened or filed against us; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • other events or factors, including those resulting from war or incidents of terrorism, or responses to these events or threats to public health.
The market price of our common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our consignor or buyer base, the level of consignor and buyer engagement, revenue or other operating results; • adverse economic and market conditions, including declines in consumer discretionary spending, currency fluctuations, inflation, disruptions in the financial industry, increased U.S. trade tariffs and trade disputes with other countries, and geopolitical instability; • the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors; • variations between our actual operating results and the expectations of securities analysts, investors and the financial community; • any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information or our failure to meet expectations based on this information; • additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales; • hedging activities by market participants; • sudden increased or decreased interest in our stock from retail investors; • substantial fluctuations in the daily trading volume of our common stock; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments; • changes in operating performance and stock market valuations of companies in our industry, including our competitors; 26 Table of Contents • price and volume fluctuations in the stock market, including as a result of trends in the economy; • lawsuits threatened or filed against us; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • other events or factors, including those resulting from war or incidents of terrorism, or responses to these events or threats to public health.
While we currently collect and remit sales taxes in every state that requires sales taxes to be collected, including states where we do not have a physical presence, the adoption of new laws by, or a successful assertion by the taxing authorities of one or more state or local governments requiring us to collect more taxes could result in substantial additional tax liabilities, including taxes on past sales, as well as penalties and interest, which could have a material adverse impact on our business and operating results.
While we currently collect and remit sales taxes in every state that requires sales taxes to be collected, including states where we do not have a physical presence, the adoption of new laws by, or a successful assertion by the taxing authorities of one or more state or local 24 Table of Contents governments requiring us to collect more taxes could result in substantial additional tax liabilities, including taxes on past sales, as well as penalties and interest, which could have a material adverse impact on our business and operating results.
Similarly, several other U.S. states, including Virginia, Connecticut, Colorado, Utah, Delaware, Iowa, Indiana, Kentucky, Maryland, Montana, Minnesota, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee and Texas have passed similar consumer data privacy laws that impose general data minimization obligations on covered businesses and also extend privacy rights to individuals, including the rights to opt out of targeted advertising and respect automated opt-out preference signals.
Similarly, several other U.S. states, including Virginia, Connecticut, Colorado, Utah, Delaware, Iowa, Indiana, Kentucky, Maryland, Montana, Minnesota, Nebraska, New Hampshire, New 23 Table of Contents Jersey, Oregon, Rhode Island, Tennessee and Texas have passed similar consumer data privacy laws that impose general data minimization obligations on covered businesses and also extend privacy rights to individuals, including the rights to opt out of targeted advertising and respect automated opt-out preference signals.
However, under the rules of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.
However, under the rules of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a 25 Table of Contents three-year period, the corporation’s ability to use its NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.
The capped call transactions are expected to offset the potential dilution to our common stock upon any conversion of the 2025 Notes and the 2028 Notes . In connection with establishing their initial hedges of the capped call transactions, the counterparties or their respective affiliates entered into various derivative transactions with respect to our common stock.
The capped call transactions are expected to offset the potential dilution to our common stock upon any conversion of the 2028 Notes . In connection with establishing their initial hedges of the capped call transactions, the counterparties or their respective affiliates entered into various derivative transactions with respect to our common stock.
The CCPA, as amended, removes the exclusion of employment data from its auspices, adds new consumer privacy rights (such as the right to correct inaccurate personal information, or the right to opt out of the “sharing” of personal information for the purposes of cross-context behavioral advertising), expands business’s obligations to secure contractual obligations from service providers and third parties, and expands business’s obligations with respect to automated opt-out 23 Table of Contents preference signals.
The CCPA, as amended, removes the exclusion of employment data from its auspices, adds new consumer privacy rights (such as the right to correct inaccurate personal information, or the right to opt out of the “sharing” of personal information for the purposes of cross-context behavioral advertising), expands business’s obligations to secure contractual obligations from service providers and third parties, and expands business’s obligations with respect to automated opt-out preference signals.
We must provide our consignors and buyers with a consistent luxury experience across our retail locations. In the past, our stores have been the target of theft and have also experienced property damage. Any such future incidents may result in a disruption to our retail operations and significant costs if not covered by our insurance policies.
We must provide our consignors and buyers with a 14 Table of Contents consistent luxury experience across our retail locations. In the past, our stores have been the target of theft and have also experienced property damage. Any such future incidents may result in a disruption to our retail operations and significant costs if not covered by our insurance policies.
We have consistently responded by reference to the holding in Tiffany (NY), Inc. v. eBay that factual use of a brand to describe and sell a used good is not false advertising. These matters have generally been resolved with no further communications, but some have resulted in litigation against us.
We have consistently responded by reference to the holding in Tiffany (NY), Inc. v. eBay that factual use of a brand to describe and sell a used good is not false advertising. These matters have generally been resolved 22 Table of Contents with no further communications, but some have resulted in litigation against us.
Risks Relating to Our Business and Industry • We have a history of losses and we may not be able to achieve or maintain profitability in the future. • The savings plan we implemented in February 2023 may not result in anticipated savings. • We may not return to historic levels of revenue growth rate or effectively manage growth or new opportunities. • We may not accurately forecast revenue and appropriately plan our expenses. • We have experienced seasonal and quarterly variations in our revenue and operating results. • Greater than expected product returns may exceed our reserve for returns. • We may require additional capital to support our business growth. • Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have adversely affected, and could in the future, adversely affect our business and the business of our consignors and buyers. • The failure of any bank in which we deposit our funds could reduce the amount of cash we have available.
Risks Relating to Our Business and Industry • We have a history of losses and we may not be able to achieve or maintain profitability in the future. • We may not be able to return to historic levels of revenue growth rate or effectively manage growth or new opportunities. • We may not accurately forecast revenue and appropriately plan our expenses. • We have experienced seasonal and quarterly variations in our revenue and operating results. • Greater than expected product returns may exceed our reserve for returns. • We may require additional capital to support our business growth. • Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have adversely affected, and could in the future, adversely affect our business and the business of our consignors and buyers. • The failure of any bank in which we deposit our funds could reduce the amount of cash we have available.
This activity could also cause or avoid an increase or a decrease in the market price of our common stock. 30 Table of Contents Item 1B. Unresolved Staff Comments. None.
This activity could also cause or avoid an increase or a decrease in the market price of our common stock. 29 Table of Contents Item 1B. Unresolved Staff Comments. None.
From time to time, such goods are damaged in transit which can increase return rates, increase our costs and harm our brand. Returned goods may also be damaged in transit as part of the return process which can significantly impact the price we are able to charge for such goods on our online marketplace.
From time to time, such goods are damaged in transit which can increase return rates, increase our costs and harm our brand. Returned goods may also be damaged in transit as part of the return process which can significantly impact the price we are able to charge for such goods 20 Table of Contents on our online marketplace.
Because our operating expenses are relatively fixed in the short term, any 13 Table of Contents failure to achieve our revenue expectations would have a direct adverse effect on our business, financial condition, operating results and the price of our stock. We have experienced seasonal and quarterly variations in our revenue and operating 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 business, financial condition, operating results and the price of our stock. We have experienced seasonal and quarterly variations in our revenue and operating results.
If such tax or other laws, rules or regulations are amended or interpretations are changed, 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 buyers or consignors, result in increased costs to update or expand our technical or administrative infrastructure or effectively limit the scope of our business activities if we 25 Table of Contents decided not to conduct business in particular jurisdictions.
If such tax or other laws, rules or regulations are amended or interpretations change, 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 buyers or consignors, 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.
Risks Related to Marketing and Brand Management • Our success depends on the accuracy and reliability of our authentication processes and methods. • We may not succeed in promoting and sustaining our brand. • Our marketing and advertising activity may fail to efficiently drive growth in consignors and buyers. • We rely on third parties to drive traffic to our website. • Use of social media, emails and text messages may adversely impact our reputation or subject us to fines. • The public disclosure of our ESG (as defined below) metrics and goals may subject us to risks.
Risks Related to Marketing and Brand Management • Our success depends on the accuracy and reliability of our authentication processes and methods. • We may not succeed in promoting and sustaining our brand. • Our marketing and advertising activity may fail to efficiently drive growth in consignors and buyers. • We rely on third parties to drive traffic to our website. • Use of social media, emails and text messages may adversely impact our reputation or subject us to fines. • The public disclosure of our Environmental, Social and Governance ("ESG") metrics and goals may subject us to risks.
Information concerning us or our consignors and brands, whether accurate or not, may be posted on social media platforms at any time. The harm may be immediate without affording us an opportunity for redress or correction and could have a material adverse effect on our reputation, business, operating results, financial condition and prospects.
Information concerning us or our consignors and brands, whether accurate or not, may be posted on social media platforms at any time. The harm may be immediate without affording us an opportunity for 18 Table of Contents redress or correction and could have a material adverse effect on our reputation, business, operating results, financial condition and prospects.
Transactions relating to our Convertible Senior Notes or the Warrants may dilute the ownership interest of our stockholders. The conversion or exercise of some or all of our outstanding Convertible Senior Notes or Warrants would dilute the ownership interests of existing stockholders to the extent we deliver shares upon conversion or exercise of any such Convertible Senior Notes or Warrants.
Transactions relating to our Convertible Senior Notes or the Warrants may dilute the ownership interest of our stockholders. 28 Table of Contents The conversion or exercise of some or all of our outstanding Convertible Senior Notes or Warrants would dilute the ownership interests of existing stockholders to the extent we deliver shares upon conversion or exercise of any such Convertible Senior Notes or Warrants.
Our 2029 Notes (as defined below) contain, and any other debt financing secured by us could also contain, restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities in the future.
Our Notes contain, and any other debt financing secured by us could also contain, restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities in the future.
In addition, the Company, its officers and directors and the underwriters of the Company’s initial public offering (“IPO”) were named as defendants in numerous purported securities class actions in connection with the Company’s IPO (the “Securities Litigation”). See “Part II, Item 1 – Legal Proceedings” for a description of the Securities Litigation.
In addition, the Company, its officers and directors and the underwriters of the Company’s initial public offering (“IPO”) were named as defendants in numerous purported securities class actions in connection with the Company’s IPO (the “Securities Litigation”). See “Part I, Item 3 – Legal Proceedings” for a description of the Securities Litigation.
Risks Related to Our Outstanding Notes and Warrants • We have incurred a significant amount of debt and may incur additional indebtedness in the future. • The indentures governing our Notes (as defined below) contain restrictions and other provisions that may make it more difficult to execute our strategy or to effectively compete, or that could materially affect our financial position. • Transactions relating to the Convertible Senior Notes or the Warrants may dilute the ownership interest of our stockholders. • The conversion of the Convertible Senior Notes or the cash settlement of the Warrants, if triggered, may adversely affect our financial condition and operating results. • The accounting method for the Warrants materially affects our reported financial results. • The accounting method for the Convertible Senior Notes materially affects our reported financial results.
Risks Related to Our Outstanding Notes and Warrants • We have incurred a significant amount of debt and may incur additional indebtedness in the future. • The indentures governing our Convertible Senior Notes and 2029 Notes contain restrictions and other provisions regarding events of default that may make it more difficult to execute our strategy or to effectively compete, or that could materially affect our financial position. • Transactions relating to the Convertible Senior Notes or the Warrants may dilute the ownership interest of our stockholders. • The conversion of the Convertible Senior Notes or the cash settlement of the Warrants, if triggered, may adversely affect our financial condition and operating results. • The accounting method for the Warrants materially affects our reported financial results.
We may be unable to replicate our business model for newer categories of consigned goods or different product mixes of consigned goods. In November 2022, we updated our take rate structure with the goals of optimizing take rate, limiting consignment of lower value items, and increasing supply of higher value items.
We may be unable to replicate our business model for newer categories of consigned goods or different product mixes of consigned goods. We previously updated our take rate structure with the goals of optimizing take rate, limiting consignment of lower value items, and increasing supply of higher value items.
While we carry insurance related to potential data breaches, the insurance we do carry may not be adequate to cover all possible losses that our business could suffer. We may incur significant losses from fraud. We may fail to prevent consignors from consigning stolen or counterfeit goods.
While we carry insurance related to potential data breaches, the insurance we do carry may not be adequate to cover all possible losses that our business could suffer. 21 Table of Contents We may incur significant losses from fraud. We may fail to prevent consignors from consigning stolen or counterfeit goods.
We rely on third-party payment processors to process payments made by buyers or to consignors on our online marketplace. The software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages.
We rely on third-party payment processors to process payments made by buyers or to consignors on our online marketplace. The software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, or be compromise.
Risks Relating to Demand • Our continued growth depends on attracting new and retaining repeat buyers. • National retailers and brands set their own retail prices and promotional discounts on new luxury goods, which could adversely affect our value proposition to consignors and buyers. • We must successfully gauge and respond to changing preferences among our consignors and buyers. • We may be unable to replicate our business model for newer categories of goods. • We rely on consumer discretionary spending, which is adversely affected by economic downturns. • Our industry is highly competitive and we may not be able to compete effectively.
Risks Relating to Demand • We rely on consumer discretionary spending, which is adversely affected by economic downturns, including economic recession or depression and other macroeconomic conditions or trends. • Our continued growth depends on attracting new and retaining repeat buyers. • National retailers and brands set their own retail prices and promotional discounts on new luxury goods, which could adversely affect our value proposition to consignors and buyers. • We must successfully gauge and respond to changing preferences among our consignors and buyers. • We may be unable to replicate our business model for newer categories of consigned goods. • Our industry is highly competitive and we may not be able to compete effectively.
An unfavorable outcome in this or similar litigation could adversely affect our business and could lead to other similar lawsuits. See “Part II, Item 1 – Legal Proceedings” for a description of the Chanel litigation.
An unfavorable outcome in this or similar litigation could adversely affect our business and could lead to other similar lawsuits. See “Part I, Item 3 – Legal Proceedings” for a description of the Chanel litigation.
Given the increased legislative and regulatory enforcement focus on the use of data for advertising and artificial intelligence, we may be subject to new and unexpected regulatory interpretations and rulemaking efforts, including proposals for regulation of artificial intelligence or other automated decision-making processes.
Given the increased legislative and regulatory enforcement focus on the use of data for advertising and artificial intelligence in the EU, UK, US and other jurisdictions, we may be subject to new and unexpected regulatory interpretations and rulemaking efforts, including proposals for regulation of artificial intelligence or other automated decision-making processes.
If our updated take rate structure is not successful in increasing the consignment of such items, our brand and reputation could be adversely affected, we may generate less revenue than expected, and we may choose to further refine the structure. We have a buy upfront program in an effort to generate additional supply.
If updates to our take rate structure are not successful in increasing the consignment of optimal items, our brand and reputation could be adversely affected, we may generate less revenue than expected, and we may choose to further refine the structure. We have a buy upfront program in an effort to generate additional supply.
However, the timing and magnitude of such discounting can be difficult to predict and can be brought on by unique factors such as a retailer or brand going out of business and liquidating its inventory, which may happen to a greater extent as a result of macroeconomic uncertainty, inflation, geopolitical instability due in part to the conflict between Russia and Ukraine, the Israel-Hamas war and weakened consumer demand.
However, the timing and magnitude of such discounting can be difficult to predict and can be brought on by unique factors such as a retailer or brand going out of business and liquidating its inventory, which may happen to a greater extent as a result of macroeconomic uncertainty, inflation, geopolitical instability due in part to the conflict between Russia and Ukraine, the Israel-Hamas war, increased U.S. trade tariffs and trade disputes with other countries, and weakened consumer demand.
Some of the factors that may reduce luxury spending include economic downturns, including economic recession or depression, high levels of unemployment, higher consumer debt levels, higher levels of inflation, reductions in net worth, declines in asset values, including home values, and related market and economic uncertainty, including as a result of geopolitical instability and disruptions in the financial industry.
Some of the factors that may reduce luxury spending include economic downturns, including an economic recession or depression, high levels of unemployment, higher consumer debt levels, higher levels of inflation, reductions in net worth, declines in asset values, including home values, the fluctuating value of raw materials such as gold and silver, and related market and economic uncertainty, including as a result of geopolitical instability and disruptions in the financial industry.
While we continue to invest and innovate heavily in our authentication processes and methods, and we reject any goods we believe to be counterfeit, we cannot be certain that every counterfeit item will be identified.
From time to time, we receive counterfeit goods for consignment. While we continue to invest and innovate heavily in our authentication processes and methods, and we reject any goods we believe to be counterfeit, we cannot be certain that every counterfeit item will be identified.
Many of these factors have occurred, and may occur in the future, as a result of macroeconomic uncertainty, rising interest rates, inflationary pressures, credit constraints and geopolitical instability due in part to the conflict between Russia and Ukraine and the Israel-Hamas war.
Many of these factors have occurred, and may occur in the future, as a result of recent macroeconomic uncertainty, fluctuating interest rates, inflationary pressures, credit constraints, changes in trade and tariff policy, and geopolitical instability due in part to the conflict between Russia and Ukraine and the Israel-Hamas war.
Additionally, adverse economic changes could reduce consumer confidence, and could thereby negatively affect our operating results. In the event of a prolonged economic downturn or acute recession, significant inflation, or decreased supply, consumer spending habits could be adversely affected, and we could experience lower than expected revenue. Any of these developments could harm our business, financial condition and operating results.
Additionally, adverse economic changes and uncertainty could reduce consumer confidence, and could thereby negatively affect our operating results. In the event of a prolonged economic downturn or acute recession, significant inflation, or decreased supply, consumer spending habits could be adversely affected, and we could experience lower than expected revenue.
If we fail to attract new consignors or drive repeat consignments in a cost-effective manner, or fail to convert buyers to consignors, our ability to grow our business and our operating results would be adversely affected. We may be unable to attract and retain talented sales professionals.
If we fail to attract new consignors or drive repeat consignments in a cost-effective manner, or fail to convert buyers to consignors, our ability to grow our business and our operating results would be adversely affected.
We experienced net losses of $196.4 million, $168.5 million, and $134.2 million in 2022, 2023 and 2024, respectively, and as of December 31, 2024 we had an accumulated deficit of $1,253.8 million. Our key initiatives currently include growing profitable supply, improving efficiencies, and pursuing new revenue streams.
We experienced net losses of $168.5 million, $134.2 million, and $41.8 million in 2023, 2024 and 2025, respectively, and as of December 31, 2025 we had an accumulated deficit of $1,295.6 million. Our key initiatives currently include growing profitable supply, improving efficiencies, and pursuing new revenue streams.
If we struggle to attract new consignors and buyers to our luxury resale model, or are unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially, our consignor and buyer base could be adversely affected, and our business, operating results, financial condition and brand could suffer. 18 Table of Contents We rely on third parties to drive traffic to our website.
If we struggle to attract new consignors and buyers to our luxury resale model, or are unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially, our consignor and buyer base could be adversely affected, and our business, operating results, financial condition and brand could suffer.
Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases such as the COVID-19 pandemic have adversely affected, and could in the future, adversely affect our business and the business of our consignors and buyers.
Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have adversely affected, and could in the future, adversely affect our business and the business of our consignors and buyers.
Our business and operating results are subject to global economic conditions and their impact on consumer discretionary spending, particularly in the luxury goods market.
Our business and operating results are subject to global economic conditions, including tariffs and changes to global trade policy and their impact on consumer discretionary spending, particularly in the luxury goods market.
In connection with the pricing of the 2025 Notes and the 2028 Notes , we entered into privately negotiated capped call transactions with certain counterparties. The capped call transactions cover the number of shares of our common stock initially underlying the 2025 Notes and the 2028 Notes .
The capped call transactions may affect the value of the Convertible Senior Notes and our common stock. In connection with the pricing of the 2028 Notes , we entered into privately negotiated capped call transactions with certain counterparties. The capped call transactions cover the number of shares of our common stock initially underlying the 2028 Notes .
We will continue to adjust the liability for changes in fair value until the earlier of exercise or expiration of the Warrants. The volatility introduced by changes in fair value on earnings may have an adverse effect on our quarterly and annual financial results. The accounting method for the Convertible Senior Notes materially affects our reported financial results.
We will continue to adjust the liability for changes in fair value until the earlier of exercise or expiration of the Warrants. The volatility introduced by changes in fair value on earnings may have an adverse effect on our quarterly and annual financial results.
We also have faced and may in the future face a number of challenges in closing existing stores, which may include significant exit costs, managing lease obligations and employee-related costs, including in connection with our recently announced real estate reduction plan. Closing existing stores may also limit our ability to attract new members, generate new supply and increase demand.
We also have faced and may in the future face a number of challenges in closing existing stores, which may include significant exit costs, managing lease obligations and employee-related costs. Closing existing stores may also limit our ability to attract new members, generate new supply and increase demand.
If we choose to do so, we would need to adapt to and would be subject to new risks relating to various local cultures, languages, standards, laws and regulations and policies. Our business model we employ may not appeal to consignors and buyers outside of the United States.
If we choose to do so, we would need to adapt to and would be subject to new risks relating to various local cultures, languages, standards, laws and regulations and policies as well as tariffs and trade-related restrictions, which could be significant. Our business model we employ may not appeal to consignors and buyers outside of the United States.
In addition, a significant number of our new and existing consignors greatly prefer our concierge consultation method for consigning luxury goods, which involves our sales professionals meeting with our consignors in their homes.
In addition, a significant number of our new and existing consignors greatly prefer our concierge consultation method for consigning luxury goods, which involves our sales professionals meeting with our consignors in their homes. We continue to optimize our take rate structure.
Our industry is highly competitive and we may not be able to compete effectively. 17 Table of Contents We compete with vendors of new and pre-owned luxury goods, including branded luxury goods stores, department stores, traditional brick-and-mortar consignment stores, pawn shops, auction houses, specialty retailers, discount chains, independent retail stores, the online offerings of traditional retail competitors, resale players focused on niche or single categories, as well as technology-enabled marketplaces that may offer the same or similar luxury goods and services that we offer.
We compete with vendors of new and pre-owned luxury goods, including branded luxury goods stores, department stores, traditional brick-and-mortar consignment stores, pawn shops, auction houses, specialty retailers, discount chains, independent retail stores, the online offerings of traditional retail competitors, resale players focused on niche or single categories, as well as technology-enabled marketplaces that may offer the same or similar luxury goods and services that we offer.
Any failure or perceived failure by us or any third parties with which we do business to comply with these laws, rules and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions against us by governmental entities, or litigation, and the expenditure of legal and other costs and of substantial time and resources, and fines, penalties or other liabilities.
Any failure or perceived failure by us or any third parties with which we do business to comply with these laws, rules and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions against us by governmental entities or third-party or class action litigation, and substantial time and resource expenditures, and fines, penalties or other liabilities.
If our growth strategies, including our initiatives to pursue new revenue streams, are not successful, do not generate sustainable revenue or help us achieve profitability, it could have a material adverse impact on our business and operating results.
If our growth strategies, including our initiatives to pursue new revenue streams, are not successful, do not generate sustainable revenue or help us achieve profitability, it could have a material adverse impact on our business and operating results. Expansion of our operations internationally will require significant management attention and resources.
As a result, we may be subject to periodic fluctuations in the number, brands and quality of goods sold through our online marketplace on behalf of our consignors.
As a result, we may be subject to periodic fluctuations in the number, brands and quality of goods sold through our online marketplace on behalf of our consignors, including as a result of the fluctuating value of raw materials such as gold and silver.
We have created our own purpose-built technology to operate our business, which may lack efficiency or become obsolete as we grow and we also rely on technology from third parties.
We have created our own purpose-built technology, including "Athena," our artificial intelligence 19 Table of Contents initiative to operate our business, which may lack efficiency or become obsolete as we grow and we also rely on technology from third parties.
If these technologies do not perform in accordance with our expectations, third parties change the terms and conditions that govern their relationships with us, or if competition increases for the technology and services provided by third parties, our business may be harmed. In addition, the evolution of these technologies may create unforeseen competitive pressures or cause disruption.
If these technologies do not perform in accordance with our expectations, cause us to experience operational disruptions, third parties change the terms and conditions that govern their relationships with us, or if competition increases for the technology and services provided by third parties, our business may be harmed.
We may have to develop alternative systems to determine our clients’ behavior, customize their online experience, or efficiently market to them if clients block cookies or regulations introduce additional barriers to collecting cookie data.
We may have to develop alternative systems to determine our clients’ behavior, customize their online experience, or efficiently market to them if clients block cookies or regulations introduce additional barriers to collecting cookie data. We pay or collect sales taxes in all jurisdictions which require such taxes.
Such acceleration of our debt could have a material adverse effect on our liquidity if we are unable to negotiate mutually acceptable terms with the holders of the Notes or if alternate funding is not available to us. Furthermore, if we are unable to repay the Notes upon an acceleration or otherwise, we could be forced into bankruptcy or liquidation.
Such acceleration of our debt could have a material adverse effect on our liquidity if we are unable to negotiate mutually acceptable terms with the holders of the 2028 Notes or the 2029 Notes or if alternate funding is not available to us.
We may limit the user data shared with third-party advertising partners, which could have a negative effect on our ability to maximize our advertising revenue.
Additionally, we may not be able to pursue these efforts at all. We may limit the user data shared with third-party advertising partners, which could have a negative effect on our ability to maximize our advertising revenue.
Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. 27 Table of Contents Our certificate of incorporation designates the Court of Chancery of the State of Delaware located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders.
The introduction of new products in the retail market, changes in consumer confidence or other competitive and general economic conditions, and higher than expected returns in connection with fourth quarter holiday buying may cause actual returns to exceed our reserve for returns. Any significant increase in returns that exceeds our reserves could adversely affect our revenue and operating results.
The introduction of new products in the retail market, changes in consumer confidence or other competitive and general economic conditions, and higher than expected returns in connection with fourth quarter holiday buying may cause actual returns to 13 Table of Contents exceed our reserve for returns.
While we experienced revenue growth in 2019, 2021, 2022 and 2024, our revenue for fiscal 2023 decreased compared to 2022. Our online marketplace represents a substantial departure from the traditional resale market for luxury goods.
While we experienced revenue growth in 2019, 2021, 2022, 2024 and 2025, our revenue for fiscal 2023 decreased compared to 2022. Our online marketplace represents a substantial departure from the traditional resale market for luxury goods. The resale market for luxury goods may not develop in a manner that we expect or that otherwise would be favorable to our business.
We pay or collect sales taxes in all jurisdictions which require such taxes. 24 Table of Contents An increasing number of states have considered or adopted laws that impose tax collection obligations on out-of-state sellers of goods. Additionally, in 2018, the Supreme Court of the United States ruled in South Dakota v.
An increasing number of states have considered or adopted laws that impose tax collection obligations on out-of-state sellers of goods. Additionally, in 2018, the Supreme Court of the United States ruled in South Dakota v.
Expansion of our operations internationally will require significant management attention and resources. While we have members from outside the United States who purchase items from our online marketplace, we have not expanded our physical operations internationally.
While we have members from outside the United States who purchase items from our online marketplace, we have not expanded our physical operations internationally.
We may require additional capital to support business growth. If such capital is not available to us, our business operating results and financial condition may be harmed. We may require additional funds to support our growth and respond to business challenges.
Any significant increase in returns that exceeds our reserves could adversely affect our revenue and operating results. We may require additional capital to support business growth. If such capital is not available to us, our business operating results and financial condition may be harmed. We may require additional funds to support our growth and respond to business challenges.
Additionally, the increased number of employees who work remotely during a public health emergency or outbreak could introduce additional operational risk, such as an increased vulnerability to cyber-attacks, and harm productivity and collaboration.
Additionally, the increased number of employees who work remotely during a public health emergency or outbreak could introduce additional operational risk, such as an increased vulnerability to cyber-attacks, and harm productivity and collaboration. In addition, the risks and uncertainties described elsewhere in this “Risk Factors” section may be exacerbated by a public health issue.
We rely in part on digital advertising, including search engine marketing, to promote awareness of our online marketplace, grow our business, attract new consignors and buyers and increase engagement with existing consignors and buyers. In particular, we rely on search engines and major mobile app stores as important marketing channels.
We rely on third parties to drive traffic to our website. We rely in part on digital advertising, including search engine marketing, to promote awareness of our online marketplace, grow our business, attract new consignors and buyers and increase engagement with existing consignors and buyers.
Risks Relating to Supply We may not be able to obtain sufficient new and recurring supply of pre-owned luxury goods. 15 Table of Contents Our success depends on our ability to generate a consistent supply of luxury goods to sell through our stores and online marketplace. To do this we must cost-effectively attract, retain and grow relationships with consignors.
Our success depends on our ability to generate a consistent supply of luxury goods to sell through our stores and online marketplace. To do this we must cost-effectively attract, retain and grow relationships with consignors.
While we expect these 20 Table of Contents technologies to improve productivity in many of our merchandising operations, including pricing, copywriting, authentication, photography and photo retouching, any flaws or failures of such technologies could cause interruptions in and delays to our operations which may harm our business. Artificial intelligence technologies create specific risks that require tailored oversight.
While we expect these technologies to improve productivity in many of our merchandising operations, including pricing, copywriting, authentication, photography and photo retouching, any flaws or failures, or unforeseen or impermissible third-party use, of such technologies could cause interruptions in and delays to our operations which may harm our business.
We lease facilities to store and accommodate the logistics infrastructure required to merchandise and ship the pre-owned luxury goods we sell through our online marketplace.
We may not be able to identify and lease authentication centers in suitable geographic regions. We lease facilities to store and accommodate the logistics infrastructure required to merchandise and ship the pre-owned luxury goods we sell through our online marketplace.
Third parties may dispute the scope of that doctrine and challenge our ability to reference their intellectual property in the course of our business. For instance, from time to time, we are contacted by companies controlling brands of goods consignors sell, demanding that we cease referencing those brands in connection with such sales, whether in advertising or on our website.
For instance, from time to time, we are contacted by companies controlling brands of goods consignors sell, demanding that we cease referencing those brands in connection with such sales, whether in advertising or on our website.
If we are unable to protect our trademarks or domain names, our brand recognition and reputation would suffer, we would incur significant expense reestablishing brand equity and our operating results would be adversely impacted.
If we are unable to protect our trademarks or domain names, our brand recognition and reputation would suffer, we would incur significant expense reestablishing brand equity and our operating results would be adversely impacted. Risks Relating to Litigation and Regulatory Uncertainty We are currently, and may be in the future, party to lawsuits and other claims.
You should consider our business and prospects in light of the risks and difficulties we may encounter.
Changes in our market make it difficult to assess our future performance. You should consider our business and prospects in light of the risks and difficulties we may encounter.
As we continue to add capacity, capabilities and automation, our operations will become increasingly complex and challenging and may be subject to additional regulation.
We are building automation, artificial intelligence, machine learning and other capabilities to drive efficiencies in our merchandising and fulfillment operations. As we continue to add capacity, capabilities and automation, our operations will become increasingly complex and challenging and may be subject to additional regulation.
The new California Privacy Protection Agency completed its first round of rulemaking but has left many new requirements, such as data privacy and security risk assessments and the right to opt out of certain data profiling activities, for its second round of rulemaking, which began in March 2023 and has yet to be finalized.
The new California Privacy Protection Agency completed its first round of rulemaking but has left many new requirements, such as data privacy and security risk assessments and the right to opt out of certain data profiling activities. It remains unclear how these new amendments will be interpreted or enforced.
Shipping is a critical part of our business and any changes in our shipping arrangements, costs, interruptions in shipping or damage to products in transit could adversely affect our operating results. Our business depends on shipping vendors to meet our shipping needs.
For example, in May 2024, we experienced a fire on the roof of one of our leased Secaucus warehouses. Shipping is a critical part of our business and any changes in our shipping arrangements, costs, interruptions in shipping or damage to products in transit could adversely affect our operating results.
In addition, competition for qualified employees and personnel in the retail industry is intense and turnover amongst our sales professionals within a few years is not uncommon.
The process of identifying and hiring sales professionals with the combination of skills and attributes required in these roles can be difficult and can require significant time. In addition, competition for qualified employees and personnel in the retail industry is intense and turnover amongst our sales professionals within a few years is not uncommon.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor a discussion of whether and how any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including our business strategy and results of operations, see “Risk Factors – Risks Related to Data Security, Privacy and Fraud,” which are incorporated by reference into this Item 1C. 31 Table of Contents In the three most recently completed fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial.
Biggest changeWhile no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected the Company, for a discussion of whether and how any such risks are reasonably likely to materially affect the Company, including our business strategy and results of operations and financial condition, see “Risk Factors – Risks Related to Data Security, Privacy and Fraud,” which are incorporated by reference into this Item 1C.
Incident Response Team and Outside Resources : We have formed an Incident Response Team that monitors and mitigates material risks from cybersecurity threats. This team is composed of members from the information security, engineering and legal teams.
Incident Response Team and Outside Resources : We have an Incident Response Team that monitors and mitigates material risks from cybersecurity threats. This team is composed of members from the information security, engineering and legal teams.
In 2024, as part of our Enterprise Risk Management Program, our Internal Audit team identified and prioritized the most critical risks that could impact our ability to achieve our business priorities and make risk-informed strategic decisions. With management’s input, our Board and Internal Audit team have identified cybersecurity as one of the risks that merits the highest level of prioritization.
In 2025, as part of our Enterprise Risk Management Program, our Internal Audit team identified and prioritized the most critical risks that could impact our ability to achieve our business priorities and make risk-informed strategic decisions. With management’s input, our Board and Internal Audit team have identified cybersecurity as one of the risks that merits the highest level of prioritization.
The following is a summary of our governance processes related to cybersecurity risk management: Board : Our full Board receives biannual updates on cybersecurity from our Chief Technology and Product Officer (the “CTPO”) or head of cybersecurity (the “CISO”) to, among other items, review cybersecurity incidents, review key metrics on our cybersecurity program and related risk management programs, and discuss our cybersecurity programs and goals.
The following is a summary of our governance processes related to cybersecurity risk management: Board : Our full Board receives annual updates on cybersecurity from our Chief Technology and Product Officer (the “CTPO”) or head of cybersecurity (the “CISO”) to, among other items, review cybersecurity incidents, review key metrics on our cybersecurity program and related risk management programs, and discuss our cybersecurity programs and goals.
As discussed above, our CTPO or CISO reports biannually to the full Board and quarterly to the Audit Committee about risks from cybersecurity threats among other cybersecurity related matters.
As discussed above, our CTPO or CISO reports annually to the full Board and quarterly to the Audit Committee about risks from cybersecurity threats among other cybersecurity related matters.
In addition, we employ a range of tools and services to inform our assessment, identification and management of material risks from cybersecurity threats, which include from time to time: • monitoring emerging data protection laws, including the California Consumer Privacy Act and the General Data Protection Regulation, and implementing responsive changes to our processes; • undertaking periodic reviews of our policies and statements related to cybersecurity; • conducting cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • conducting phishing email simulations for employees and contractors with access to corporate email systems; • requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care; and • conducting tabletop exercises to simulate a response to a cybersecurity incident and using the findings to improve our processes and technologies.
In addition, we employ a range of tools and services to inform our assessment, identification and management of material risks from cybersecurity threats, which include from time to time: • monitoring emerging data protection laws and implementing responsive changes to our processes; • undertaking periodic reviews of our policies and statements related to cybersecurity; • conducting cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • conducting phishing email simulations for employees and contractors with access to corporate email systems; • requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care; and • conducting tabletop exercises to simulate a response to a cybersecurity incident and using the findings to improve our processes and technologies.
Cybersecurity Task Force : We have formed a cross-functional Cybersecurity Task Force that focuses on long-term cybersecurity strategy. The Cybersecurity Task Force is composed of members from the information security, engineering and legal teams and reports to our Chief Technology and Product Officer. The Cybersecurity Task Force meets periodically to discuss developments and best practices in cybersecurity incident response.
The Cybersecurity Task Force is composed of members from the information security, engineering and legal teams and reports to our Chief Technology and Product Officer. The Cybersecurity Task Force meets periodically to discuss developments and best practices in cybersecurity incident response.
This includes penalties and settlements, of which there were none. Corporate Governance Our Board of Directors provides oversight of risks from cybersecurity threats, in coordination with our Audit Committee and management team.
Corporate Governance 30 Table of Contents Our Board of Directors provides oversight of risks from cybersecurity threats, in coordination with our Audit Committee and management team.
In addition, we engage several third party service providers to monitor cybersecurity threats in the market more broadly, including in relation to phishing, data leaks on the dark web, firewalls, code security and endpoint protection. To identify risks from cybersecurity threats associated with these third-party service providers, we conduct pre-contract screening and due diligence and post-contract monitoring.
In addition, we engage several third-party service providers to monitor cybersecurity threats in the market more broadly, including in relation to phishing, artificial intelligence and machine learning, data leaks on the dark web, firewalls, code security and endpoint protection.
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To identify risks from cybersecurity threats associated with these third-party service providers, we conduct pre-contract screening and due diligence and post-contract monitoring. Cybersecurity Task Force : We have a cross-functional Cybersecurity Task Force that focuses on long-term cybersecurity strategy.
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In the three most recently completed fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located in San Francisco, California and are leased for a term that expires in 2027 with a right of renewal. We lease an aggregate of approximately 1.4 million square feet of space for storage, merchandising operations and fulfillment located in Arizona and New Jersey.
Biggest changeItem 2. Properties. Our corporate headquarters are located in San Francisco, California and are leased for a term that expires in 2037. We lease an aggregate of approximately 1.4 million square feet of space for storage, merchandising operations and fulfillment located in Arizona and New Jersey.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe parties have continued to engage in settlement discussions facilitated by a mediator. The final outcome of this litigation, including our liability, if any, with respect to Chanel’s claims, is uncertain. An unfavorable outcome in this or similar litigation could adversely affect the Company’s business and could lead to other similar lawsuits.
Biggest changeWith the parties’ consent, the magistrate judge will hold a settlement conference to facilitate further discussions between the parties on March 5, 2026. The final outcome of this litigation, including our liability, if any, with respect to Chanel’s claims, is uncertain.
On November 3, 2020, the Company sought leave to amend its Answer to assert counterclaims against Chanel, Inc. for violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, the Donnelly Act, N.Y. Gen. Bus. Law. § 340, and New York common law. The motion for leave to amend was granted on February 24, 2021.
On November 3, 2020, the 31 Table of Contents Company sought leave to amend its Answer to assert counterclaims against Chanel, Inc. for violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, the Donnelly Act, N.Y. Gen. Bus. Law. § 340, and New York common law. The motion for leave to amend was granted on February 24, 2021.
The Company discloses material contingencies when a loss is not probable but reasonably possible. 32 Table of Contents On November 14, 2018, Chanel, Inc. sued the Company in the U.S. District Court for the Southern District of New York. The Complaint alleged federal and state law claims of trademark infringement, unfair competition, and false advertising.
The Company discloses material contingencies when a loss is not probable but reasonably possible. On November 14, 2018, Chanel, Inc. sued the Company in the U.S. District Court for the Southern District of New York. The Complaint alleged federal and state law claims of trademark infringement, unfair competition, and false advertising.
For this reason, the Company cannot currently estimate the loss or range of possible losses it may experience in connection with this litigation. Item 4. Mine Safety Disclosures. None. 33 Table of Contents PART II
While the Company intends to defend vigorously against this litigation, there can be no assurance that the Company will be successful in its defense. For this reason, the Company cannot currently estimate the loss or range of possible losses it may experience in connection with this litigation. Item 4. Mine Safety Disclosures. None. 32 Table of Contents PART II
The Company is not able to predict or reasonably estimate the ultimate outcome or loss or range of possible losses relating to this claim.
An unfavorable outcome in this or similar litigation could adversely affect the Company’s business and could lead to other similar lawsuits. The Company is not able to predict or reasonably estimate the ultimate outcome or loss or range of possible losses relating to this claim.
The claims are for alleged violations of Sections 11 and 15 of the Securities Act. On February 23, 2024, plaintiff filed a motion for class certification, which has been set for hearing on February 25, 2025. While the Company intends to defend vigorously against this litigation, there can be no assurance that the Company will be successful in its defense.
The claims are for alleged violations of Sections 11 and 15 of the Securities Act. On February 23, 2024, plaintiff filed a motion for class certification. On July 22, 2025, the court entered an order denying the motion for class certification. On September 19, 2025, plaintiff filed a notice of appeal of the class certification decision, which appeal remains pending.
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The parties engaged in settlement discussions moderated by the mediator over the course of two years but were unable to reach a settlement or any reasonable range. On October 6, 2025, the stay was lifted, and the parties appeared for a conference before the magistrate judge to discuss a schedule for the remainder of the litigation on October 14, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of the close of business on February 14, 2025, there were 111 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.
Biggest changeStockholders As of the close of business on February 18, 2026, there were 94 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.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item with respect to our equity compensation plans will be incorporated by reference to our 2025 proxy statement set forth in the section titled “Equity Compensation Plan Information” that will be filed with the SEC within 120 days of the year ended December 31, 2024 (the “Proxy Statement”).
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item with respect to our equity compensation plans will be incorporated by reference to our 2026 proxy statement set forth in the section titled “Equity Compensation Plan Information” that will be filed with the SEC within 120 days of the year ended December 31, 2025 (the “Proxy Statement”).
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. Reserved 34 Table of Contents
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. Reserved 33 Table of Contents

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe following tables set forth our results of operations (in thousands) and such data as a percentage of revenue for the periods presented: Year Ended December 31, 2024 2023 2022 (In thousands) Revenue: Consignment revenue $ 473,396 $ 415,572 $ 384,979 Direct revenue 64,580 79,160 158,726 Shipping services revenue 62,508 54,572 59,788 Total revenue 600,484 549,304 603,493 Cost of revenue: Cost of consignment revenue 53,801 58,120 56,963 Cost of direct revenue 55,809 74,343 141,661 Cost of shipping services revenue 43,353 40,563 56,178 Total cost of revenue 152,963 173,026 254,802 Gross profit 447,521 376,278 348,691 Operating expenses: Marketing 55,256 58,275 62,988 Operations and technology 260,827 257,041 278,628 Selling, general and administrative 187,737 183,793 195,342 Restructuring 196 43,462 896 Total operating expenses 504,016 542,571 537,854 Loss from operations (56,495) (166,293) (189,163) Change in fair value of warrant liability (68,167) — — Gain on extinguishment of debt 4,177 — — Interest income 7,943 8,805 3,191 Interest expense (21,384) (10,701) (10,472) Other income, net — — 171 Loss before provision for income taxes (133,926) (168,189) (196,273) Provision for income taxes 276 283 172 Net loss $ (134,202) $ (168,472) $ (196,445) 41 Table of Contents Year Ended December 31, 2024 2023 2022 Revenue: Consignment revenue 79 % 76 % 64 % Direct revenue 11 14 26 Shipping services revenue 10 10 10 Total revenue 100 100 100 Cost of revenue: Cost of consignment revenue 9 11 9 Cost of direct revenue 9 14 24 Cost of shipping services revenue 7 7 9 Total cost of revenue 25 32 42 Gross profit 75 68 58 Operating expenses: Marketing 9 11 11 Operations and technology 43 47 46 Selling, general and administrative 31 33 33 Restructuring — 8 — Total operating expenses 83 99 90 Loss from operations (8) (31) (32) Change in fair value of warrant liability (11) — — Gain on extinguishment of debt 1 — — Interest income 1 2 1 Interest expense (4) (2) (2) Other income, net — — — Loss before provision for income taxes (21) (31) (33) Provision for income taxes — — — Net loss (21) % (31) % (33) % Comparison of 2024 and 2023 Consignment Revenue Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Consignment revenue $ 473,396 $ 415,572 $ 57,824 14 % Consignment revenue increased by $57.8 million, or 14%, in 2024 compared to 2023.
Biggest changeThe following tables set forth our results of operations (in thousands) and such data as a percentage of revenue for the periods presented: Year Ended December 31, 2025 2024 2023 (In thousands) Revenue: Consignment revenue $ 535,877 $ 473,396 $ 415,572 Direct revenue 91,091 64,580 79,160 Shipping services revenue 65,877 62,508 54,572 Total revenue 692,845 600,484 549,304 Cost of revenue: Cost of consignment revenue 56,582 53,801 58,120 Cost of direct revenue 70,682 55,809 74,343 Cost of shipping services revenue 48,759 43,353 40,563 Total cost of revenue 176,023 152,963 173,026 Gross profit 516,822 447,521 376,278 Operating expenses: Marketing 63,251 55,256 58,275 Operations and technology 275,916 260,827 257,041 Selling, general and administrative 201,589 187,737 183,793 Restructuring charges — 196 43,462 Total operating expenses 540,756 504,016 542,571 Loss from operations (23,934) (56,495) (166,293) Change in fair value of warrant liability (35,769) (68,167) — Gain on extinguishment of debt 40,785 4,177 — Interest income 4,257 7,943 8,805 Interest expense (27,701) (21,384) (10,701) Other income, net 926 — — Loss before provision for income taxes (41,436) (133,926) (168,189) Provision for income taxes 363 276 283 Net loss $ (41,799) $ (134,202) $ (168,472) 40 Table of Contents Year Ended December 31, 2025 2024 2023 Revenue: Consignment revenue 77 % 79 % 76 % Direct revenue 13 11 14 Shipping services revenue 10 10 10 Total revenue 100 100 100 Cost of revenue: Cost of consignment revenue 8 9 11 Cost of direct revenue 10 9 14 Cost of shipping services revenue 7 7 7 Total cost of revenue 25 25 32 Gross profit 75 75 68 Operating expenses: Marketing 9 9 11 Operations and technology 40 43 47 Selling, general and administrative 29 31 33 Restructuring charges — — 8 Total operating expenses 78 83 99 Loss from operations (3) (8) (31) Change in fair value of warrant liability (5) (11) — Gain on extinguishment of debt 6 1 — Interest income 1 1 2 Interest expense (4) (4) (2) Other income, net — — — Loss before provision for income taxes (5) (21) (31) Provision for income taxes — — — Net loss (5) % (21) % (31) % Comparison of 2025 and 2024 Consignment Revenue Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Consignment revenue $ 535,877 $ 473,396 $ 62,481 13 % Consignment revenue increased by $62.5 million, or 13%, in 2025 compared to 2024.
In connection with the 2024 Note Exchange, the Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company’s common stock to the holders of the Exchanged Notes at an exercise price of $1.71, subject to certain cashless exercise provisions and adjustment in accordance with the terms of the warrants (the “Warrants”) (see “Note 4 – Fair Value Measurement” to the financial statements included in this report for further details on the terms of the Warrants).
In connection with the 2024 Note Exchange, the Company issued Warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company’s common stock to the holders of the Exchanged Notes at an exercise price of $1.71, subject to certain cashless exercise provisions and adjustment in accordance with the terms of the Warrants (see “Note 4 – Fair Value Measurement” to the financial statements included in this report for further details on the terms of the Warrants).
(8) One time expenses for the year ended December 31, 2024 consists of vendor services settlement and estimated losses, net of estimated insurance recoveries related to the fire at one of our New Jersey authentication centers. See "Note 12 - Commitments and Contingencies" in the notes to the audited financial statements for disclosure regarding the event.
One time expenses for the year ended December 31, 2024 consists of vendor services settlement and estimated losses, net of estimated insurance recoveries related to the fire at one of our New Jersey authentication centers. See "Note 12 - Commitments and Contingencies" in the notes to the audited financial statements for disclosure regarding the event.
NMV NMV represents the value of sales from both consigned goods and our inventory net of platform-wide discounts less product returns and order cancellations and excludes the effect of buyer incentives, shipping fees and sales tax. We believe NMV is a supplemental measure of the scale and growth of our online marketplace.
Net Merchandise Value ("NMV") NMV represents the value of sales from both consigned goods and our inventory net of platform-wide discounts less product returns and order cancellations and excludes the effect of buyer incentives, shipping fees and sales tax. We believe NMV is a supplemental measure of the scale and growth of our online marketplace.
We believe our existing cash and cash equivalents as of December 31, 2024 will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months. Our primary capital requirements include contractual obligations related to our operating leases, our indebtedness, certain non-cancellable contracts and compensation and benefits payments to support our strategic plans.
We believe our existing cash and cash equivalents as of December 31, 2025 will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months. Our primary capital requirements include contractual obligations related to our operating leases, our indebtedness, certain non-cancellable contracts and compensation and benefits payments to support our strategic plans.
Adjusted EBITDA means net loss before interest income, interest expense, provision for income taxes, and depreciation and amortization, further adjusted to exclude stock-based compensation, payroll taxes on employee stock transactions, restructuring, CEO separation benefits and transition costs, gain on extinguishment of debt, change in fair value of warrant liability and certain one time expenses.
Adjusted EBITDA means net loss before interest income, interest expense, provision for income taxes, and depreciation and amortization, further adjusted to exclude stock-based compensation, payroll taxes on employee stock transactions, restructuring, CEO separation benefits and transition costs, gain on extinguishment of debt, change in fair value of warrant liability, legal settlements, and certain one time expenses.
(6) The gain on extinguishment of debt for the year ended December 31, 2024 reflects the difference between the carrying value of the Exchanged Notes and the fair value of the 2029 Notes.
The gain on extinguishment of debt for the year ended December 31, 2024 reflects the difference between the carrying value of the 2024 Exchanged Notes and the fair value of the 2029 Notes.
The capped call transactions are generally expected to reduce potential dilution to our common stock upon any conversion of the notes and/or offset any cash payments we are required to make in excess of the principal amount of the 2025 Notes and the 2028 Notes, as the case may be, with such reduction and/or offset subject to a cap.
The capped call transactions are generally expected to reduce potential dilution to our common stock upon any conversion of the notes and/or offset any cash payments we are required to make in excess of the principal amount of the converted 2028 Notes, as the case may be, with such reduction and/or offset subject to a cap.
We expect these expenses to continue to decrease as a percentage of revenue over the longer term. 39 Table of Contents Restructuring Restructuring expense is primarily comprised of right-of-use asset and fixed asset impairments, severance benefits, and other related charges, including net gain on lease terminations.
We expect these expenses to continue to decrease as a percentage of revenue over the longer term. 38 Table of Contents Restructuring Restructuring expense is primarily comprised of right-of-use asset and fixed asset impairments, severance benefits, and other related charges, including net gain on lease terminations.
For additional details related to our 2029 Notes, please see “Note 6 – Non-convertible Notes, Net” to the financial statements included in this report. 48 Table of Contents Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance.
For additional details related to our 2029 Notes, please see “Note 6 – Non-convertible Notes, Net” to the financial statements included in this report. 47 Table of Contents Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance.
Our growth has been driven in significant part by repeat sales by existing consignors concurrent with growth of our consignor base. In 2024 and 2023, repeat consignors accounted for over 80% of GMV. Buyer growth and retention . We grow our business by attracting and retaining buyers.
Our growth has been driven in significant part by repeat sales by existing consignors concurrent with growth of our consignor base. In 2025 and 2024, repeat consignors accounted for over 80% of GMV. Buyer growth and retention . We grow our business by attracting and retaining buyers.
We expect to maintain this full valuation allowance for the foreseeable future. 40 Table of Contents Results of Operations The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in the Annual Report.
We expect to maintain this full valuation allowance for the foreseeable future. 39 Table of Contents Results of Operations The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in the Annual Report.
Prior year comparisons for 2023 and 2022 are included in “Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Prior year comparisons for 2024 and 2023 are included in “Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Our AOV reflects both the average price of items sold as well as the number of items per order. Our AOV is a key driver of our operating leverage. 38 Table of Contents Components of our Operating Results Revenue Our revenue is comprised of consignment revenue, direct revenue and shipping services revenue. • Consignment revenue .
Our AOV reflects both the average price of items sold as well as the number of items per order. Our AOV is a key driver of our operating leverage. 37 Table of Contents Components of our Operating Results Revenue Our revenue is comprised of consignment revenue, direct revenue and shipping services revenue. • Consignment revenue .
We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy . We recognize shipping services revenue over time as the shipping activit y occurs. Shipping services revenue excludes the effect of buyer incentives and sales tax.
We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy . We recognize shipping services revenue over time as the shipping activit y occurs, net of immaterial buyer incentives. Shipping services revenue excludes the effect of sales tax.
We do not reduce GMV to reflect product returns or order cancellations, which totaled 24.4%, 26.4%, and 26.5% of GMV in 2024, 2023, and 2022, respectively. GMV includes amounts paid for both consigned goods and our inventory net of platform-wide discounts and excludes the effect of buyer incentives, shipping fees and sales tax.
We do not reduce GMV to reflect product returns or order cancellations, which totaled 24.2%, 24.4% and 26.4% of GMV in 2025, 2024 and 2023, respectively. GMV includes amounts paid for both consigned goods and our inventory net of platform-wide discounts and excludes the effect of buyer incentives, shipping fees and sales tax.
As a result of this seasonality, we typically see stronger AOV and more rapid sell-through in the fourth quarter. 36 Table of Contents Key Financial and Operating Metrics The key operating and financial metrics that we use to assess the performance of our business are set forth below for 2024, 2023, and 2022.
As a result of this seasonality, we typically see stronger AOV and more rapid sell-through in the fourth quarter. 35 Table of Contents Key Financial and Operating Metrics The key operating and financial metrics that we use to assess the performance of our business are set forth below for 2025, 2024, and 2023.
Our retail stores provide an alternative location to drop off consigned items and an opportunity to interact with our authentication experts. Consignors may also utilize our complimentary shipping directly to our authentication centers. We leverage our proprietary transactional database and market insights from approximately 44.5 million item sales since our inception to deliver optimal pricing and rapid sell-through.
Our retail stores provide an alternative location to drop off consigned items and an opportunity to interact with our authentication experts. Consignors may also utilize our complimentary shipping directly to our authentication centers. We leverage our proprietary transactional database and market insights from over 50 million item sales since our inception to deliver optimal pricing and rapid sell-through.
Take rates vary depending on the total value of goods sold through our online marketplace on behalf of a particular consignor as well as the category and price point of the items. In 2024 and 2023, our overall take rate on consigned goods was 38.4% and 37.5% respectively.
Take rates vary depending on the total value of goods sold through our online marketplace on behalf of a particular consignor as well as the category and price point of the items. In 2025 and 2024, our overall take rate on consigned goods was 37.7% and 38.4% respectively.
We count as a member any user who has registered an email address on our website or downloaded our mobile app, thereby agreeing to our terms of service. 35 Table of Contents Factors Affecting Our Performance To analyze our business performance, determine financial forecasts and help develop long-term strategic plans, we focus on the factors described below.
A member is any user who has registered an email address on our website or downloaded our mobile app, thereby agreeing to our terms of service. 34 Table of Contents Factors Affecting Our Performance To analyze our business performance, determine financial forecasts and help develop long-term strategic plans, we focus on the factors described below.
When we deliver purchased items to our buyers, we charge shipping fees to buyers for the outbound shipping and handling services. We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy. Shipping services revenue excludes the effect of buyer incentives and sales tax.
When we deliver purchased items to our buyers, we charge shipping fees to buyers for the outbound shipping and handling services. We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy. Shipping services revenue is recognized net of immaterial buyer incentives and excludes the effect of sales tax.
We generate revenue from orders processed through our website, mobile app and retail stores. Our omni-channel experience enables buyers to purchase anytime and anywhere. We have a global base of more than 38.6 million members as of December 31, 2024.
We generate revenue from orders processed through our website, mobile app and retail stores. Our omni-channel experience enables buyers to purchase anytime and anywhere. We have a global base of more than 40 million members as of December 31, 2025.
We also generate shipping services revenue from the shipping 37 Table of Contents fees for consigned products returned by our buyers to us within policy. We recognize shipping services revenue over time as the shipping activity occurs. Shipping services revenue excludes the effect of buyer incentives and sales tax.
We also generate shipping services revenue from the shipping 36 Table of Contents fees for consigned products returned by our buyers to us within policy. We recognize shipping services revenue over time as the shipping activity occurs, net of immaterial buyer incentives. Shipping services revenue excludes the effect of sales tax.
For additional details related to our Convertible Senior Notes, please see “Note 7 – Convertible Senior Notes, Net” and "Note 17 — Subsequent Events" to the financial statements included in this report. 2029 Notes and Warrants On February 29, 2024, the Company entered into exchange agreements with certain holders (the “Exchange Holders”) of its Convertible Senior Notes to exchange (i) $145.8 million in aggregate principal amount of the 2025 Notes and (ii) $6.5 million in aggregate principal amount of the 2028 Notes (together, the “Exchanged Notes”) for $135.0 million in aggregate principal amount of the Company’s 4.25%/8.75% PIK/Cash Senior Secured Notes due 2029 (the “2029 Notes”), pursuant to an indenture.
For additional details related to our Convertible Senior Notes and the 2025 Note Exchanges, please see “Note 7 – Convertible Senior Notes, Net” to the financial statements included in this report. 2029 Notes and Warrants On February 29, 2024, the Company entered into exchange agreements with certain holders (the “Exchange Holders”) of its then outstanding 2025 Notes and 2028 Notes to exchange (i) $145.8 million in aggregate principal amount of the 2025 Notes and (ii) $6.5 million in aggregate principal amount of the 2028 Notes (together, the “Exchanged Notes”) 46 Table of Contents for $135.0 million in aggregate principal amount of the Company’s 4.25%/8.75% PIK/Cash Senior Secured Notes due 2029 (the “2029 Notes”), pursuant to the 2029 Notes Indenture.
Our cash requirements related to certain other non-cancellable purchase commitments associated primarily with software services and hosting arrangements, were approximately $17.6 million, of which approximately $8.1 million is expected to be paid within the next 12 months.
Our cash requirements related to certain other non-cancellable purchase commitments associated primarily with software services and hosting arrangements, were approximately $17.2 million, of which approximately $9.2 million is expected to be paid within the next 12 months.
Our buyer acquisition cost (“BAC”) for a given period is comprised of our total advertising spend for acquiring both buyers and consignors, which is principally the cost of television, digital and direct mail advertising, divided by the number of buyers acquired in that period.
We closely monitor our efficiency in acquiring new buyers. Our buyer acquisition cost (“BAC”) for a given period is comprised of our total advertising spend for acquiring both buyers and consignors, which is principally the cost of television, digital and direct mail advertising, divided by the number of buyers acquired in that period.
In addition to scaling our physical infrastructure, growing our single-SKU business operations requires that we attract, train and retain highly-skilled personnel for purposes of authentication, copywriting, merchandising, pricing and fulfilling orders. We have invested substantially in technology to automate our operations and support growth, including proprietary machine learning technology to support efficiency and quality.
In addition to scaling our physical infrastructure, growing our single-SKU business operations requires that we attract, train and retain highly-skilled personnel for purposes of authentication, copywriting, merchandising, pricing and fulfilling orders. We have invested substantially in technology to automate our operations and support growth.
We measure the ratio of demand versus supply in a given period, which we refer to as our online marketplace sell-through ratio. Sell-through ratio is defined as GMV in the period divided by the aggregate initial value of items added to our online marketplace in the period. In 2024, our online marketplace sell-through ratio was approximately 85%.
We measure the ratio of demand versus supply in a given period, which we refer to as our online marketplace sell-through ratio. Sell-through ratio is defined as GMV in the period divided by the aggregate initial value of items added to our online marketplace in the period. In 2025, our online marketplace sell-through ratio was over 80%.
As of December 31, 2024, 15% of our buyers during the last twelve months also consigned items, and 48% of our consignors also made purchases. We believe this approach effectively captures the flywheel effect that strengthens the network dynamics of our online marketplace.
As of December 31, 2025, 16% of our buyers during the last twelve months also consigned items, and 50% of our consignors also made purchases. We believe this approach effectively captures the flywheel effect that strengthens the network dynamics of our online marketplace.
Our 2025 Notes will mature on June 15, 2025, unless earlier redeemed or repurchased by the Company or converted and our 2028 Notes will mature on March 1, 2028, unless earlier redeemed or repurchased by the Company or converted. • Non-convertible Notes.
Our 2028 Notes will mature on March 1, 2028, unless earlier redeemed or repurchased by the Company or converted and our 2031 Notes will mature on February 15, 2031, unless earlier redeemed or repurchased by the Company or converted. • Non-convertible Notes.
As of December 31, 2024, our cash requirements related to our Non-convertible Notes that are included on our balance sheet and the related periodic interest payments were $225.8 million, of which $12.2 million is expected to be paid within the next 12 months. • Non-cancellable purchase commitments.
As of December 31, 2025, our cash requirements related to our Non-convertible Notes that are included on our balance sheet and the related periodic interest payments were $213.6 million, of which $12.7 million is expected to be paid within the next 12 months. • Non-cancellable purchase commitments.
(7) The change in fair value of warrant liability for the year ended December 31, 2024 reflects the remeasurement of the warrants issued by the Company in connection with the 2024 Note Exchange in February 2024.
(6) The change in fair value of warrant liability for the years ended December 31, 2025 and December 31, 2024 reflects the remeasurement of the Warrants issued by the Company in connection with the 2024 Note Exchange in February 2024.
As of December 31, 2024, our cash requirements related to our operating leases on our authentication centers, retail stores, and corporate offices that are included in our balance sheet were $124.5 million, of which $28.8 million is expected to be paid within the next 12 months. • Convertible Senior Notes.
As of December 31, 2025, our cash requirements related to our operating leases on our authentication centers, retail stores, and corporate offices that are included in our balance sheet were $104.6 million, of which $30.1 million is expected to be paid within the next 12 months. • Convertible Senior Notes.
As of December 31, 2024, our cash requirements related to our Convertible Senior Notes that are included on our balance sheet and the related periodic interest payments were $287.0 million, of which $30.0 million is expected to be paid within the next 12 months.
As of December 31, 2025, our cash requirements related to our Convertible Senior Notes that are included on our balance sheet and the related periodic interest payments were $281.3 million, of which $8.1 million is expected to be paid within the next 12 months.
We believe this metric reflects scale, brand awareness, buyer acquisition and engagement. Average Order Value (“AOV”) Average order value (“AOV”) means the average value of all orders placed across our online marketplace and retail stores, excluding the effect of buyer incentives, shipping fees and sales taxes. Our focus on luxury goods across multiple categories drives a consistently strong AOV.
Average Order Value (“AOV”) AOV means the average value of all orders placed across our online marketplace and retail stores, excluding the effect of buyer incentives, shipping fees and sales taxes. Our focus on luxury goods across multiple categories drives a consistently strong AOV.
The fair value of the warrant liability is estimated using the Black-Scholes-Merton option-pricing model, which incorporates inherent uncertainties and generally requires significant judgement including factors such as the risk-free interest rate and the expected volatility of the price of the underlying stock.
The fair value of the warrant liability is estimated using the Black-Scholes-Merton option-pricing model, which incorporates inherent uncertainties and generally requires significant judgment including factors such as the risk-free interest rate and the expected volatility of the price of the underlying stock. Changes in fair value are recognized on our statements of operations.
Prior year comparisons are included in "Park II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Cash Flows The following table summarizes our cash flows for the periods indicated. Prior year comparisons are included in "Park II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Changes in fair value are recognized on our statements of operations. 51 Table of Contents Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies” to our financial statements included elsewhere in this Annual Report on Form 10-K for recently issued accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K. 52 Table of Contents Item 7A.
Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies” to our financial statements included elsewhere in this Annual Report on Form 10-K for recently issued accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K. 50 Table of Contents
Gain on Extinguishment of Debt Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Gain on extinguishment of debt $ 4,177 $ — $ 4,177 100 % Gain on extinguishment of debt increased by $4.2 million, or 100% in 2024 compared to 2023.
Gain on Extinguishment of Debt Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Gain on extinguishment of debt $ 40,785 $ 4,177 $ 36,608 100 % Gain on extinguishment of debt increased by $36.6 million, or over 100% in 2025 compared to 2024.
We expect these expenses to decrease as a percentage of revenue over the longer term. 44 Table of Contents Selling, General and Administrative Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Selling, general and administrative $ 187,737 $ 183,793 $ 3,944 2 % Selling, general and administrative expense increased by $3.9 million, or 2%, in 2024 compared to 2023.
We expect these expenses to decrease as a percentage of revenue over the longer term. Selling, General and Administrative Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Selling, general and administrative $ 201,589 $ 187,737 $ 13,852 7 % Selling, general and administrative expense increased by $13.9 million, or 7%, in 2025 compared to 2024.
We have transformed the luxury consignment experience by removing the friction and pain points inherent in the traditional consignment model. For consignors, we offer concierge at-home consultation and pickup as well as virtual consultations. Consignors may also drop off items at our luxury consignment offices.
We have transformed the luxury consignment experience by removing the friction and pain points inherent in the traditional consignment model. Our growth playbook centers on scalable supply engine, and helps us forge enduring relationships with our consignors. We offer concierge at-home consultation and pickup as well as virtual consultations. Consignors may also drop off items at our luxury consignment offices.
(5) Restructuring for the year ended December 31, 2023 consists of impairment of right-of-use assets and property and equipment, employee severance charges, gain on lease terminations, and other charges, including legal and transportation expenses. Restructuring for the year ended December 31, 2022 consists of employee severance payments and benefits.
(4) Restructuring for the year ended December 31, 2023 consists of impairment of right-of-use assets and property and equipment, employee severance charges, gain on lease terminations, and other charges, including legal and transportation expenses in connection with the savings plan implemented in February 2023.
Net Cash Used in Investing Activities During 2024, net cash used in investing activities was $25.6 million, which consisted of $14.2 million for purchases of property and equipment, net, including leasehold improvements, and $11.8 million for capitalized proprietary software costs.
Net Cash Used in Investing Activities During 2025, net cash used in investing activities was $29.2 million, which primarily consisted of $18.6 million for purchases of property and equipment, net, including leasehold improvements, and $12.9 million for capitalized proprietary software costs.
Year Ended December 31, 2024 2023 2022 (In thousands, except AOV and percentages) GMV $ 1,829,463 $ 1,725,983 $ 1,815,983 NMV $ 1,382,875 $ 1,269,880 $ 1,335,506 Consignment revenue $ 473,396 $ 415,572 $ 384,979 Direct revenue $ 64,580 $ 79,160 $ 158,726 Shipping services revenue $ 62,508 $ 54,572 $ 59,788 Number of orders 3,359 3,300 3,757 Take rate 38.4 % 37.5 % 36.0 % Active buyers 972 922 998 AOV $ 545 $ 523 $ 483 GMV GMV represents the total amount paid for goods across our online marketplace in a given period.
Year Ended December 31, 2025 2024 2023 (In thousands, except AOV and percentages) GMV $ 2,130,007 $ 1,829,463 $ 1,725,983 NMV $ 1,614,120 $ 1,382,875 $ 1,269,880 Consignment revenue $ 535,877 $ 473,396 $ 415,572 Direct revenue $ 91,091 $ 64,580 $ 79,160 Shipping services revenue $ 65,877 $ 62,508 $ 54,572 Number of orders 3,587 3,359 3,300 Take rate 37.7 % 38.4 % 37.5 % Active buyers 1,056 972 922 AOV $ 594 $ 545 $ 523 Gross Merchandise Value ("GMV") GMV represents the total amount paid for goods across our online marketplace in a given period.
The net change in our operating assets and liabilities was primarily the result of cash inflows due to an increase of $11.5 million in consignor payables and an increase of $13.1 million in other accrued and current liabilities, partially offset by cash outflows due to a decrease of $20.9 million in operating lease liabilities.
The net change in our operating assets and liabilities was primarily the result of cash outflows due to a decrease of $22.2 million in operating lease liabilities, an increase of $12.5 million in accounts receivable, and an increase of $9.5 million in inventory, partially offset by cash inflows due to an increase of $21.8 million 45 Table of Contents in consignor payables and an increase of $12.7 million in other accrued and current liabilities.
Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. 49 Table of Contents The following table provides a reconciliation of net loss to Adjusted EBITDA (in thousands): Year Ended December 31, 2024 2023 2022 (In thousands) Adjusted EBITDA Reconciliation: Net loss $ (134,202) $ (168,472) $ (196,445) Add (deduct): Depreciation and amortization 33,100 31,695 27,669 Interest income (7,943) (8,805) (3,191) Interest expense (1) 21,384 10,701 10,472 Provision for income taxes 276 283 172 EBITDA (87,385) (134,598) (161,323) Stock-based compensation (2) 29,082 34,273 46,138 CEO separation benefits and transition costs (3) 782 159 2,499 Payroll taxes on employee stock transactions 371 195 451 Legal settlements (4) 600 1,340 456 Restructuring (5) 196 43,462 896 Gain on extinguishment of debt (6) (4,177) — — Change in fair value of warrant liability (7) 68,167 — — One time expenses (8) 1,672 — (1,571) Adjusted EBITDA $ 9,308 $ (55,169) $ (112,454) (1) As of December 31, 2024, interest expense includes $4.8 million of accrued PIK interest which is a non-cash interest expense.
The following table provides a reconciliation of net loss to Adjusted EBITDA (in thousands): Year Ended December 31, 2025 2024 2023 (In thousands) Adjusted EBITDA Reconciliation: Net loss $ (41,799) $ (134,202) $ (168,472) Add (deduct): Depreciation and amortization 33,004 33,100 31,695 Interest income (4,257) (7,943) (8,805) Interest expense (1) 27,701 21,384 10,701 Provision for income taxes 363 276 283 EBITDA 15,012 (87,385) (134,598) Stock-based compensation 28,943 29,082 34,273 CEO separation benefits and transition costs (2) — 782 159 Payroll taxes on employee stock transactions 1,454 371 195 Legal settlements (3) — 600 1,340 Restructuring (4) — 196 43,462 Gain on extinguishment of debt (5) (40,785) (4,177) — Change in fair value of warrant liability (6) 35,769 68,167 — One time expenses (7) 1,711 1,672 — Adjusted EBITDA $ 42,104 $ 9,308 $ (55,169) (1) As of December 31, 2025 and December 31, 2024, interest expense includes $6.0 million and $4.8 million of PIK interest, respectively, which is a non-cash interest expense.
Our GMV from buyers who are also consignors has increased over time due to the effectiveness of our flywheel. Buyer acquisition cost. Our financial performance depends on effectively managing the expenses we incur to attract and retain buyers. We closely monitor our efficiency in acquiring new buyers.
Our GMV from buyers who are also consignors has increased over time due to the effectiveness of our flywheel and more recently through tools to encourage flywheel behavior like the "Reconsign" module on our platform. Buyer acquisition cost. Our financial performance depends on effectively managing the expenses we incur to attract and retain buyers.
Year Ended December 31, 2024 2023 2022 (In thousands) Net cash (used in) provided by: Operating activities $ 26,846 $ (61,268) $ (91,557) Investing activities (25,587) (42,128) (36,922) Financing activities (4,759) 226 4,101 Net decrease in cash, cash equivalents and restricted cash $ (3,500) $ (103,170) $ (124,378) Net Cash Used in Operating Activities During 2024, net cash provided by operating activities was $26.8 million, which consisted of a net loss of $134.2 million, adjusted by non-cash charges of $158.2 million and cash inflows due to a net change of $2.8 million in our operating assets and liabilities.
Year Ended December 31, 2025 2024 2023 (In thousands) Net cash (used in) provided by: Operating activities $ 37,010 $ 26,846 $ (61,268) Investing activities (29,224) (25,587) (42,128) Financing activities (28,870) (4,759) 226 Net decrease in cash, cash equivalents and restricted cash $ (21,084) $ (3,500) $ (103,170) Net Cash Provided by Operating Activities During 2025, net cash provided by operating activities was $37.0 million, which consisted of a net loss of $41.8 million, adjusted by $88.1 million of non-cash inflows and cash outflows due to a net change of $9.3 million in our operating assets and liabilities.
A portion of the net proceeds from the sale of the 2025 Notes and the 2028 Notes was used to fund the net cost of entering into the capped call transactions described below.
A portion of the net proceeds from the sale of the 2028 Notes was used to fund the net cost of entering into the capped call transactions described below. We did not receive any cash proceeds from the issuance of the 2031 Notes in the 2025 Note Exchanges.
The increase in our take rate was due to the update of our consignor commission structure (effective November 1, 2022). Additionally, we earn revenue from our subscription program, First Look, in which we offer buyers early access to the items we sell in exchange for a monthly fee. • Direct revenue .
The decrease in our take rate was due to sales mix into higher value items. Additionally, we earn revenue from our subscription program, First Look, in which we offer buyers early access to the items we sell in exchange for a monthly fee. • Direct revenue .
The increase was due to the gain recorded from the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2029 Notes (See Note 6 — Non-convertible Notes, Net).
The increase was due to the gain recorded from the extinguishment of the 2025 Exchanged Notes (as defined below) and the issuance of the 2031 Notes during the year ended December 31, 2025 (See Note 7 — Convertible Senior Notes, Net).
We may seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.
We may seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.
The increase was primarily due to increased employee compensation related expenses due to an increase in headcount compared to the prior period. As a percentage of revenue, selling, general and administrative decreased to 31% in 2024 from 33% in 2023. These expenses may vary from period to period as a percentage of revenue.
The increase was primarily due to increased employee costs, primarily offset by a decrease in legal fees. As a percentage of revenue, selling, general and administrative decreased to 29% in 2025 from 31% in 2024. These expenses may vary from period to period as a percentage of revenue.
As a percentage of revenue, marketing expense decreased to 9% in 2024 from 11% and 2023. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments. We expect these expenses to decrease as a percentage of revenue over the longer term.
As a percentage of revenue, marketing expense remained flat at 9% in 2025 and 2024. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments.
On February 10, 2025, pursuant to the 2025 Notes Exchange, we issued $146.7 million in aggregate principal amount of the 2031 Notes in exchange for $183.3 million in aggregate principal amount of our 2028 Notes.
Convertible Senior Notes In connection with the February 2025 Note Exchange, on February 10, 2025, we entered into private, separately negotiated transactions and issued $146.7 million in aggregate principal amount of our 2031 Notes in exchange for $183.3 million in aggregate principal amount of our 2028 Notes.
Interest Income Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Interest income $ 7,943 $ 8,805 $ (862) (10) % 45 Table of Contents Interest income decreased by $0.9 million, or 10%, in the year ended December 31, 2024 compared to the year ended December 31, 2023 due to lower average cash balances.
Interest Income Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Interest income $ 4,257 $ 7,943 $ (3,686) (46) % Interest income decreased by $3.7 million, or 46%, in the year ended December 31, 2025 compared to the year ended December 31, 2024 due to lower average cash balances.
(4) The legal settlement charges for the year ended December 31, 2023 reflect legal settlement expenses arising from the settlement of two former employees’ individual claims and California Private Attorney General Actions initiated against the Company on behalf of such former employees and those similarly situated.
The CEO separation benefits and transition costs for the year ended December 31, 2023 consists of retention bonuses for certain executives incurred in connection with our founder's resignation in 2022. 48 Table of Contents (3) The legal settlement charges for the year ended December 31, 2023 reflect legal settlement expenses arising from the settlement of two former employees’ individual claims and California Private Attorney General Actions initiated against the Company on behalf of such former employees and those similarly situated.
We continue to strategically invest in technology, as innovation positions us to scale and support growth into the future. Seasonality. Historically, we have observed trends in seasonality of supply and demand in our business. Specifically, our supply increases in the third and fourth quarters, and our demand increases in the fourth quarter.
We have continued to elevate our authentication operations through the combination of technology, our proprietary data, and artificial intelligence capabilities to support efficiency and quality. We continue to strategically invest in technology, as innovation positions us to scale and support growth into the future. Seasonality. Historically, we have observed trends in seasonality of supply and demand in our business.
Our take rate structure is primarily based on the category and the price point of the sold items. For example, under the current take rate structure, consignors can earn 20% commission on all sold items under $100, and up to 90% commission on watches sold for over $7,500.
For example, under the current take rate structure, consignors can earn 20% commission on all sold items under $100, and up to 90% commission on watches sold for over $7,500. We launched a pricing tool for our consignors that provides detail on commission rates for specific categories and other aspects of the take rate structure.
Consignment revenue gross margin increased by 262 basis points in the year ended December 31, 2024 compared to the year ended December 31, 2023, driven by the improvement in take rate and the reduction in overhead costs.
Consignment revenue gross margin increased by 81 basis points in the year ended December 31, 2025 compared to the year ended December 31, 2024, driven by the increase in consignment revenue and increased operational efficiencies.
Cost of Direct Revenue Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Cost of direct revenue $ 55,809 $ 74,343 $ (18,534) (25) % As a percent of direct revenue 86 % 94 % Cost of direct revenue decreased by $18.5 million, or 25%, in 2024 compared to 2023.
Cost of Direct Revenue Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Cost of direct revenue $ 70,682 $ 55,809 $ 14,873 27 % As a percent of direct revenue 78 % 86 % Cost of direct revenue increased by $14.9 million, or 27%, in 2025 compared to 2024.
While our significant accounting policies are more fully described in Note 2—Summary of Significant Accounting Policies, we believe that the accounting estimates discussed below involve a significant level of estimation uncertainty by management. 2024 Note Exchange During the year ended December 31, 2024 , we accounted for the 2024 Note Exchange as a debt extinguishment and recorded a gain on extinguishment as the difference between the carrying amount of the Exchanged Notes and the fair value of the 2029 Note s.
While our significant accounting policies are more fully described in Note 2—Summary of Significant Accounting Policies, we believe that the accounting estimates discussed below require the most significant management judgment. 2025 Note Exchanges 49 Table of Contents During the year ended December 31, 2025 , we accounted for the February 2025 Note Exchange and August 2025 Note Exchange as debt extinguishments and recorded gains on extinguishment of $37.1 million and $3.7 million, respectively, as the difference between the carrying amount of the respective Exchanged Notes and the fair value of the 2031 Notes issued in the respective 2025 Note Exchanges.
In February 2024, we exchanged $145.8 million of the 2025 Notes and $6.5 million of the 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (the “2024 Note Exchange”). As a result of the 2024 Note Exchange, we significantly extended the average maturity date of our outstanding indebtedness (see Note 6 - Non-convertible Notes, Net).
In March 2021, we received net proceeds of $244.5 million from our 2028 Notes and the related capped call transactions. In February 2024, we exchanged $145.8 million of our 2025 Notes and $6.5 million of our 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (the "2024 Note Exchange") (see Note 6 — Non-convertible Notes, Net).
Interest Expense Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Interest expense $ (21,384) $ (10,701) $ 10,683 100 % Interest expense increased by $10.7 million, or 100%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to the contractual interest expense related to the 2029 Notes issued in February 2024.
Interest Expense Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Interest expense $ (27,701) $ (21,384) $ 6,317 30 % Interest expense increased by $6.3 million, or 30%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The capped call transactions cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the 2025 Notes and the 2028 Notes sold in the offering.
In connection with the issuance of the 2028 Notes, we entered into privately negotiated capped call transactions, with certain of the initial purchasers or their affiliates. The capped call transactions cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the 2028 Notes sold in the offering.
The Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company's common stock as part of the 2024 Note Exchange (as defined below) in February 2024.
Change in Fair Value of Warrant Liability Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Change in fair value of warrant liability $ (35,769) $ (68,167) $ 32,398 (48) % The Company issued warrants to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the warrants) of the Company's common stock as part of the 2024 Note Exchange in February 2024.
Shipping Services Revenue Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Shipping services revenue $ 62,508 $ 54,572 $ 7,936 15 % Shipping services revenue increased by $7.9 million, or 15%, in 2024 compared to 2023 primarily due to an increase in the standard shipping fee per order.
Shipping Services Revenue Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Shipping services revenue $ 65,877 $ 62,508 $ 3,369 5 % Shipping services revenue increased by $3.4 million, or 5%, in 2025 compared to 2024 primarily due to a 7% increase in the number of orders in the year ended December 31, 2025.
Direct revenue as a percentage of total revenue may vary from period to period primarily based on the amount of consignment revenue.
The increase was primarily driven by higher sales of items acquired from businesses, individual sellers, and from out of policy returns. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the amount of consignment revenue.
We adjust or re-allocate our advertising in real-time to optimize our spend across channels, buyer demographics and geographies to improve our return on advertising spend. Our BAC has declined over time, which has been driven by improving acquisition efficiencies. Scaling operations and technology.
We adjust or re-allocate our advertising in real-time to optimize our spend across channels, buyer demographics and geographies to improve our return on advertising spend. Our BAC may vary from year to year, depending upon when we choose to make more significant investments. Scaling operations and technology.
The margin profile of our direct revenue is lower than the margin profile of our consignment revenue. 43 Table of Contents Cost of Shipping Services Revenue Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Cost of shipping services revenue $ 43,353 $ 40,563 $ 2,790 7 % As a percent of shipping services revenue 69 % 74 % Cost of shipping services revenue increased by $2.8 million, or 7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to increased cost per shipment.
Cost of Shipping Services Revenue Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Cost of shipping services revenue $ 48,759 $ 43,353 $ 5,406 12 % As a percent of shipping services revenue 74 % 69 % 42 Table of Contents Cost of shipping services revenue increased by $5.4 million, or 12%, in the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to a 7% increase in the number of orders and higher carrier costs.
Marketing Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Marketing $ 55,256 $ 58,275 $ (3,019) (5) % Marketing expense decreased by $3.0 million, or 5%, in 2024 compared to 2023. The decrease was primarily due to a decrease in advertising costs.
Gross margin may vary from period to period. Marketing Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Marketing $ 63,251 $ 55,256 $ 7,995 14 % Marketing expense increased by $8.0 million, or 14%, in 2025 compared to 2024. The increase was primarily due to increased advertising costs.
These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments.
As a percentage of revenue, operations and technology expense decreased to 40% in 2025 from 43% in 2024 due to an increase in consignment revenue and improved operating efficiencies in our authentication centers. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments.
Convertible Senior Notes As of December 31, 2024, we had 2025 Notes outstanding in an aggregate principal amount of $26.7 million and 2028 Notes outstanding in an aggregate principal amount of $281.0 million.
As of December 31, 2025, we had 2028 Notes outstanding in an aggregate principal amount of $48.2 million. As a result of the 2025 Note Exchanges, as of December 31, 2025, we had 2031 Notes outstanding in an aggregate principal amount of $190.1 million (together, the "Convertible Senior Notes").
Shipping services revenue gross margin increased by 497 basis points in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to the increase in the standard shipping fee per order.
Shipping services revenue gross margin decreased by 466 basis points in the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to higher carrier costs. Total Gross Margin Our total gross margin remained flat in the year ended December 31, 2025 compared to the year ended December 31, 2024.
Operations and Technology Year Ended December 31, Change 2024 2023 Amount % (In thousands, except percentage) Operations and technology $ 260,827 $ 257,041 $ 3,786 1 % Operations and technology expense increased by $3.8 million, or 1%, in 2024 compared to 2023.
Operations and Technology Year Ended December 31, Change 2025 2024 Amount % (In thousands, except percentage) Operations and technology $ 275,916 $ 260,827 $ 15,089 6 % Operations and technology expense increased by $15.1 million, or 6%, in 2025 compared to 2024. The increase was driven by higher employee costs due to increased volume compared to the prior period.
On February 10, 2025, pursuant to the 2025 Notes Exchange, we issued $146.7 million in aggregate principal amount of our 2031 Notes in exchange for $183.3 million in aggregate principal amount of our 2028 Notes.
In February 2025, we exchanged $183.3 million aggregate principal amount of the 2028 Notes for $146.7 million aggregate principal amount of our 2031 Notes (the "February 2025 Note Exchange") (see Note 7 — Convertible Senior Notes, Net). In June 2025, the 2025 Notes matured, and the Company repaid the outstanding principal amount and accrued interest in full.
In June 2020, we received net proceeds of $143.3 million from the issuance of our 2025 Notes and the related capped call transactions. In March 2021, we received net proceeds of $244.5 million from our 2028 Notes and the related capped call transactions.
However, during the years ended December 31, 2025 and 2024, we achieved positive cash flow from operations. In July 2019, we received net proceeds of $315.5 million upon completion of our IPO on July 2, 2019. In June 2020, we received net proceeds of $143.3 million from the issuance of our 2025 Notes and the related capped call transactions.
(3) The CEO separation benefits and transition costs for the year ended December 31, 2024 consist of severance and benefits payable to John Koryl pursuant to his separation agreement. The CEO separation benefits and transition costs for the year ended December 31, 2023 consists of retention bonuses for certain executives incurred in connection with our founder's resignation in 2022.
PIK interest is added to the principal balance of the 2029 Notes semi-annually. (2) The CEO separation benefits and transition costs for the year ended December 31, 2024 consist of severance and benefits payable to John Koryl pursuant to his separation agreement.
Management assesses changes in take rates by monitoring the volume of GMV and take rate across each discrete commission grouping, encompassing commission tiers and exceptions. Active Buyers Active buyers include buyers who purchased goods through our online marketplace during the 12 months ended on the last day of the period presented, irrespective of returns or cancellations.
Active Buyers Active buyers include buyers who purchased goods through our online marketplace during the 12 months ended on the last day of the period presented, irrespective of returns or cancellations. We believe this metric reflects scale, brand awareness, buyer acquisition and engagement.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $172.2 million and an accumulated deficit of $1,253.8 million. We had restricted cash of $14.9 million as of December 31, 2024, consisting of cash deposited with a financial institution as collateral for our letters of credit, facility leases and credit cards.
We had restricted cash of $14.8 million as of December 31, 2025, consisting of cash deposited with a financial institution as collateral for our letters of credit, facility leases and credit cards. Since our inception, we have historically generated negative cash flows from operations and have primarily financed our operations through equity and convertible debt financings.

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