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

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Paragraph-level year-over-year comparison of ThredUp 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.

+204 added−214 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-03)

Top changes in ThredUp Inc.'s 2025 10-K

204 paragraphs added · 214 removed · 165 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe work diligently to attract the best talent from a diverse range of sources in order to meet the current and future demands of our business. The core objective of our compensation program is to provide a package that will attract, motivate and reward exceptional employees who must operate in a highly competitive and technologically challenging environment.
Biggest changeThe core objective of our compensation program is to provide a package that will attract, motivate and reward exceptional employees who must operate in a highly competitive and technologically challenging environment. We believe that a unique perspective is critical to solving complex problems and inspiring the world to think secondhand first.
Competitors offering the same or similar goods or services include: • secondhand marketplaces, such as eBay, Goodwill, Mercari, Poshmark, The RealReal, Vinted and Vestiaire Collective; • large online and discount retailers, such as Amazon.com, Inc., Target Corporation, Kohl’s Corporation and Walmart Inc.; • off-price retailers, such as Burlington Stores, Inc., Ross Stores, Inc. and The TJX Companies, Inc.; and • low-cost online fast-fashion retailers such as Shein and Temu.
Competitors offering the same or similar goods or services include: • secondhand marketplaces, such as eBay, Goodwill, Mercari, Poshmark, The RealReal, Vinted and Vestiaire Collective; • large online and discount retailers, such as Amazon.com, Inc., Target Corporation, and Walmart Inc.; • off-price retailers, such as Burlington Stores, Inc., Ross Stores, Inc. and The TJX Companies, Inc.; and • low-cost online fast-fashion retailers such as Shein and Temu.
Our operations are highly scalable, and we have the ability to process more than 100,000 unique SKUs per day across our existing distribution center footprint. We drive continuous operational efficiency through proprietary technology and ongoing automation of our infrastructure. Our existing processing and distribution centers are located in Arizona, Georgia, Pennsylvania, and Texas.
Our operations are highly scalable, and we have the ability to process more than 100,000 unique SKUs per day across our existing distribution center footprint. We drive continuous operational efficiency through proprietary technology and ongoing automation of our infrastructure. Our existing distribution centers are located in Arizona, Georgia, Pennsylvania, and Texas.
These laws and regulations include laws governing the processing of payments, consumer protection and other laws regarding unfair and deceptive trade practices. These laws and regulations could make internet advertising more expensive, require burdensome disclosure to consumers or visitors to our website and restrict our ability to use consumer information to improve targeted advertisements.
These laws and regulations include laws governing the processing of payments, consumer protection, privacy and other laws regarding unfair and deceptive trade practices. These laws and regulations could make internet advertising more expensive, require burdensome disclosure to consumers or visitors to our website and restrict our ability to use consumer information to improve targeted advertisements.
Similarly, apparel, shoes and accessories sold by us are also subject to import regulations in the United States concerning the use of wildlife products for commercial and non-commercial trade, including the United States Fish and Wildlife Service. We do not estimate any significant capital expenditures for environmental control matters either in 2025 or in the near future.
Similarly, apparel, shoes and accessories sold by us are also subject to import regulations in the United States concerning the use of wildlife products for commercial and non-commercial trade, including the United States Fish and Wildlife Service. We do not estimate any significant capital expenditures for environmental control matters either in 2026 or in the near future.
Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Kit, fill and return it to us using our prepaid label.
Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Bag, fill and return it to us using our prepaid label.
This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to GlobalData's assessment of the secondhand market in January 2024.
This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to GlobalData's assessment of the secondhand market in January 2025.
These patents are intended to protect our proprietary inventions relevant to our business. We continually review our development efforts to assess the existence and patentability of new intellectual property. We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost effective.
We have patents issued in the United States. These patents are intended to protect our proprietary inventions relevant to our business. We continually review our development efforts to assess the existence and patentability of new intellectual property. We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost effective.
Our infrastructure is purpose-built for “single SKU” logistics, meaning that the vast majority of items processed are unique, came from or belong to an individual seller and is individually tracked using its own stock keeping unit (“SKU”). As of December 31, 2024, we operated distribution centers that could collectively hold more than 9.0 million items.
Our infrastructure is purpose-built for “single SKU” logistics, meaning that the vast majority of items processed are unique, came from or belong to an individual seller and is individually tracked using its own stock keeping unit (“SKU”). As of December 31, 2025, we operated distribution centers that could collectively hold more than7.5 million items.
Human Capital Resources As of December 31, 2024, we had 1,630 employees and professional contractors, including 1,424 distribution center employees. To our knowledge, none of our employees is represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages and we consider our relations with our employees to be good.
Human Capital Resources As of December 31, 2025, we had 2,132 employees and professional contractors, including 1,817 distribution center employees. To our knowledge, none of our employees is represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages and we consider our relations with our employees to be good.
Our investor relations website is located at ir.thredup.com. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
These filings are also available for download free of charge on our investor relations website. Our investor relations website is located at ir.thredup.com. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
We believe RaaS will accelerate the growth of this emerging category and form the backbone of the modern resale experience. We have built a differentiated and defensible operating platform to enable resale at scale, combining: • Distributed Processing Infrastructure.
We believe RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy. We have built a differentiated and defensible operating platform to enable resale at scale, combining: • Distributed Processing Infrastructure.
On November 30, 2024, we divested 91.0% of the common stock of Remix US Holdings Inc., the parent company of Remix Global EAD (“Remix”), the operating subsidiary for our European business. As a result, we have discontinued our European operations.
Cost of revenue primarily includes outbound shipping, outbound labor and packaging costs. 4 Table of Contents On November 30, 2024, we divested 91.0% of the common stock of Remix US Holdings Inc., the parent company of Remix Global EAD (“Remix”), the operating subsidiary for our European business. As a result, we have discontinued our European operations.
Regulation We are subject to a variety of United States federal and state laws as well as international laws that affect companies conducting business on the Internet and in the retail industry, many of which are still evolving and could be interpreted in ways that could harm our business.
We also have registered domain names for websites that we use in our business, such as www.thredup.com and other variations. 5 Table of Contents Regulation We are subject to a variety of United States federal and state laws as well as international laws that affect companies conducting business on the Internet and in the retail industry, many of which are still evolving and could be interpreted in ways that could harm our business.
We rely on a combination of patents, trademarks, copyrights, trade secrets, license agreements, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements, as well as other legal and contractual rights, to establish and protect our proprietary rights. 6 Table of Contents We have patents issued in the United States.
Intellectual Property We believe that our intellectual property rights are valuable and important to our business. We rely on a combination of patents, trademarks, copyrights, trade secrets, license agreements, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements, as well as other legal and contractual rights, to establish and protect our proprietary rights.
Available Information The following filings are available through our investor relations website after we file them with the Securities and Exchange Commission (the “SEC”): Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and our Proxy Statement for our Annual Meeting of Stockholders. These filings are also available for download free of charge on our investor relations website.
In addition, full-time United States-based exempt employees are eligible for an eight weeks paid sabbatical after three years of service . 6 Table of Contents Available Information The following filings are available through our investor relations website after we file them with the Securities and Exchange Commission (the “SEC”): Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and our Proxy Statement for our Annual Meeting of Stockholders.
While we do not anticipate a reduction in force due to conflict in Ukraine, we anticipate that at least some of our Ukrainian IT specialists may be unable to work while the military conflict is unresolved. 7 Table of Contents Our human capital resources objective is to cultivate a high-performing team by recruiting, retaining, incentivizing and integrating our existing and new employees and professional contractors.
While we do not anticipate a reduction in force due to conflict in Ukraine, we anticipate that at least some of our Ukrainian IT specialists may be unable to work while the military conflict is unresolved.
We also offer Style Chat, an AI-powered chatbot, that helps customers create complete outfits based on natural language prompts that they provide.
We also offer Style Chat, an AI-powered chatbot, that helps customers create complete outfits based on natural language prompts that they provide. We generate revenue primarily from items that are sold to buyers on our website and mobile app, as well as bag fees charged to sellers for processing Clean Out Bags.
We believe that a unique perspective is critical to solving complex problems and inspiring the world to think secondhand first. We are proud to maintain a workforce that is majority female and underrepresented minorities. We are committed to identifying talent from a range of backgrounds and experiences.
We are proud to maintain a workforce that is majority female and underrepresented minorities. We are committed to identifying talent from a range of backgrounds and experiences. All full-time United States based employees are eligible to participate in our employee stock purchase plan and 401k plan.
Our culture is underpinned by our core values, including an unwavering commitment to learning, development, inclusion, diversity, equity and belonging. We believe our people are our greatest asset and are reimagining our employee experience to reflect that philosophy.
Our human capital resources objective is to cultivate a high-performing team by recruiting, retaining, incentivizing and integrating our existing and new employees and professional contractors. Our culture is underpinned by our core values, including an unwavering commitment to learning, development, inclusion, diversity, equity and belonging.
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We generate revenue primarily from items that are sold to buyers on our website and mobile app, as well as bag fees charged to sellers for processing Clean Out Kits. 5 Table of Contents Our revenue is comprised of consignment sales and direct product sales.
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Our revenue is primarily derived from consignment sales, which are recognized net of seller payouts, discounts, incentives and returns.
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With consignment sales, we recognize revenue net of seller payouts, and cost of revenue includes outbound shipping, outbound labor and packaging costs. With direct product sales, we recognize revenue on a gross basis, and cost of revenue mainly includes inventory cost, inbound shipping and inventory write-downs, as well as outbound shipping, outbound labor and packaging costs.
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We believe our people are our greatest asset and are reimagining our employee experience to reflect that philosophy. We work diligently to attract the best talent from a diverse range of sources in order to meet the current and future demands of our business.
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Our buyers generally pay us upfront when they purchase an item. Revenue from our RaaS offerings typically includes an upfront integration fee as well as ongoing service fees which are then recorded to consignment revenue.
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With RaaS, brands and retailers are leveraging our operating platform to deliver resale experiences to their customers across three main service modules: our Clean Out service, our cashout marketplace, and our full-service resale shops.
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This suite of offerings is called “Resale 360” and enables our RaaS clients to drive incremental revenue and access new customers while promoting a circular business model. As of December 31, 2024, we worked with 50 RaaS clients, including Gap, Reformation, J.Crew, Madewell, Abercrombie, and the Container Store.
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Intellectual Property We believe that our intellectual property rights are valuable and important to our business.
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We also have registered domain names for websites that we use in our business, such as www.thredup.com and other variations.
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All full-time United States based employees are eligible to participate in our employee stock purchase plan, eight weeks paid sabbatical after three years and 401k plan.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur status as an emerging growth company will end as soon as any of the following takes place: • the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; • the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; • the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or • the last day of the fiscal year ending after the fifth anniversary of the completion of the IPO.
Biggest changeWe will be an “emerging growth company” until the fiscal year-end following the fifth anniversary of the completion of ThredUp’s initial public offering (March 2026), though we may cease to be an “emerging growth company” earlier under certain circumstances, including if (i) we have more than $1,235,000 thousand in annual revenue in any fiscal year, (ii) the market value of our shares of common stock that is held by non-affiliates exceeds $700,000 thousand as of any June 30 or (iii) we issue more than $1,000,000 thousand of non-convertible debt over a three-year period.
We believe our success and revenue growth depends on a number of factors, including, but not limited to, our ability to: • cost effectively attract and retain new and existing buyers and sellers and grow our supply of high-quality secondhand items for resale through our marketplaces; • scale our revenue and achieve the operating efficiencies necessary to achieve and maintain profitability; • increase buyer and seller awareness of our brand; • anticipate and respond to changing buyer and seller preferences; • manage and improve our business processes in response to changing business needs; • process Clean Out Kits from sellers on a timely basis; • improve, expand and further automate our distribution center operations and information systems; • anticipate and respond to macroeconomic changes generally, including changes in the markets for both new and secondhand retail items; • successfully compete against established companies and new market entrants, including national retailers and brands and traditional brick-and-mortar thrift stores; • effectively scale our operations while maintaining high-quality service and buyer and seller satisfaction; • hire and retain talented employees and professional contractors at all levels of our business; • avoid or manage interruptions in our business from information technology downtime, cybersecurity breaches and other factors that could affect our physical and digital infrastructure; • fulfill and deliver Orders in a timely manner and in accordance with customer expectations, which may change over time; • maintain a high level of customer service and satisfaction; • adapt to changing conditions in our industry ; and • comply with regulations applicable to our business.
We believe our success and revenue growth depends on a number of factors, including, but not limited to, our ability to: • cost effectively attract and retain new and existing buyers and sellers and grow our supply of high-quality secondhand items for resale through our marketplaces; • scale our revenue and achieve the operating efficiencies necessary to achieve and maintain profitability; • increase buyer and seller awareness of our brand; • anticipate and respond to changing buyer and seller preferences; • manage and improve our business processes in response to changing business needs; • process Clean Out Bags from sellers on a timely basis; • improve, expand and further automate our distribution center operations and information systems; • anticipate and respond to macroeconomic changes generally, including changes in the markets for both new and secondhand retail items; • successfully compete against established companies and new market entrants, including national retailers and brands and traditional brick-and-mortar thrift stores; • effectively scale our operations while maintaining high-quality service and buyer and seller satisfaction; • hire and retain talented employees and professional contractors at all levels of our business; • avoid or manage interruptions in our business from information technology downtime, cybersecurity breaches and other factors that could affect our physical and digital infrastructure; • fulfill and deliver Orders in a timely manner and in accordance with customer expectations, which may change over time; • maintain a high level of customer service and satisfaction; • adapt to changing conditions in our industry; and • comply with regulations applicable to our business.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors is classified into three classes of directors with staggered three-year terms; • permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the Chairperson of our board of directors, our Chief Executive Officer, President or a majority of our board of directors is authorized to call a special meeting of stockholders; • provide for a dual-class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to approve, alter or repeal our bylaws; and • 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. 41 Table of Contents Moreover, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors is classified into three classes of directors with staggered three-year terms; • permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the Chairperson of our board of directors, our Chief Executive Officer, President or a majority of our board of directors is authorized to call a special meeting of stockholders; • provide for a dual-class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to approve, alter or repeal our bylaws; and • 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. 40 Table of Contents Moreover, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company.
Our quarterly results of operations have in the past and may in the future fluctuate from quarter to quarter as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the level of supply and demand for secondhand items; • fluctuations in the levels or quality of secondhand items on our marketplaces; • fluctuations in capacity as we expand our operations; • our success in engaging existing buyers and sellers and cost effectively attracting new buyers and sellers; • our ability to meet the expectations of sellers that we will process their Clean Out Kits in a timely manner; • the amount and timing of our operating expenses; • the timing of expenses and recognition of revenue; • the timing and success of new partnerships, RaaS relationships, retail offerings and referral programs; • the impact of competitive developments and our response to those developments; • our ability to manage our existing business and future growth; • actual or reported disruptions or defects in our online marketplace, such as actual or perceived privacy or data security breaches; 15 Table of Contents • economic and market conditions, particularly those affecting our industry; • fluctuations in inventories held by primary sellers and related fluctuations in promotional activities and merchandise discounting; • the impact of market volatility and economic downturns, including those caused by outbreaks of disease on our business; • costs arising from investigations, litigation, regulatory audits and similar such proceedings, including the cost of responding to claims or inquiries, participating in such proceedings and paying any adverse judgments, fines, settlement costs and other related costs; • changes in, and continuing uncertainty in relation to, the legislative or regulatory environment; • legal and regulatory compliance costs; • the number of new employees and professional contractors added; • the timing of the grant or vesting of equity awards to employees, directors, contractors or consultants; • pricing pressure as a result of competition, economic conditions, shipment delays or otherwise; • costs and timing of expenses related to the acquisition of talent, technologies, intellectual property or businesses, including potentially significant amortization costs and possible write-downs; • public health crises; and • general economic conditions throughout the world, including the inflation and interest rate environment, military conflicts, including Russia’s invasion of Ukraine, the Israel-Hamas war, other conflicts in the Middle East, and geopolitical uncertainty and instability.
Our quarterly results of operations have in the past and may in the future fluctuate from quarter to quarter as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the level of supply and demand for secondhand items; • fluctuations in the levels or quality of secondhand items on our marketplaces; • fluctuations in capacity as we expand our operations; • our success in engaging existing buyers and sellers and cost effectively attracting new buyers and sellers; • our ability to meet the expectations of sellers that we will process their Clean Out Bags in a timely manner; • the amount and timing of our operating expenses; • the timing of expenses and recognition of revenue; • the timing and success of new partnerships, RaaS relationships, retail offerings and referral programs; • the impact of competitive developments and our response to those developments; • our ability to manage our existing business and future growth; • actual or reported disruptions or defects in our online marketplace, such as actual or perceived privacy or data security breaches; 14 Table of Contents • economic and market conditions, particularly those affecting our industry; • fluctuations in inventories held by primary sellers and related fluctuations in promotional activities and merchandise discounting; • the impact of market volatility and economic downturns, including those caused by outbreaks of disease on our business; • costs arising from investigations, litigation, regulatory audits and similar such proceedings, including the cost of responding to claims or inquiries, participating in such proceedings and paying any adverse judgments, fines, settlement costs and other related costs; • changes in, and continuing uncertainty in relation to, the legislative or regulatory environment; • legal and regulatory compliance costs; • the number of new employees and professional contractors added; • the timing of the grant or vesting of equity awards to employees, directors, contractors or consultants; • pricing pressure as a result of competition, economic conditions, shipment delays or otherwise; • costs and timing of expenses related to the acquisition of talent, technologies, intellectual property or businesses, including potentially significant amortization costs and possible write-downs; • public health crises; and • general economic conditions throughout the world, including the inflation and interest rate environment, military conflicts, including Russia’s invasion of Ukraine, the Israel-Hamas war, other conflicts in the Middle East, and geopolitical uncertainty and instability.
Litigation and other claims are subject to inherent uncertainties and management’s view of these matters may change in the future. For a description of our current legal proceedings, see "Item 3. Legal Proceedings" along with "Note 11—Commitments and Contingencies" of the notes to the consolidated financial statements contained within this Annual Report on Form 10-K.
Litigation and other claims are subject to inherent uncertainties and management’s view of these matters may change in the future. For a description of our current legal proceedings, see "Item 3. Legal Proceedings" along with Note 10, Commitments and Contingencies of the notes to the consolidated financial statements contained within this Annual Report on Form 10-K.
We believe our ability to compete depends on many factors, many of which are beyond our control, including: • cost effectively attracting and retaining buyers and sellers and increasing the volume of secondhand items they buy and sell; • further developing our data science and automation capabilities; • maintaining favorable brand recognition; • effectively delivering our marketplaces to buyers and sellers; • identifying and delivering authentic, high-quality secondhand items; • maintaining and increasing the amount, diversity and quality of brands and secondhand items that we offer; • our ability to expand the means through which we acquire and offer secondhand items for resale; • the price at which secondhand items accepted onto our marketplaces are offered; • fluctuations in inventories held by primary sellers and related fluctuations in promotional activities and merchandise discounting; 12 Table of Contents • the speed and cost at which we can process and make available secondhand items and deliver purchased secondhand items to our buyers; and • the ease with which our buyers and sellers can supply, purchase and return secondhand items.
We believe our ability to compete depends on many factors, many of which are beyond our control, including: • cost effectively attracting and retaining buyers and sellers and increasing the volume of secondhand items they buy and sell; • further developing our data science and automation capabilities; • maintaining favorable brand recognition; • effectively delivering our marketplaces to buyers and sellers; • identifying and delivering authentic, high-quality secondhand items; • maintaining and increasing the amount, diversity and quality of brands and secondhand items that we offer; • our ability to expand the means through which we acquire and offer secondhand items for resale; • the price at which secondhand items accepted onto our marketplaces are offered; 11 Table of Contents • fluctuations in inventories held by primary sellers and related fluctuations in promotional activities and merchandise discounting; • the speed and cost at which we can process and make available secondhand items and deliver purchased secondhand items to our buyers; and • the ease with which our buyers and sellers can supply, purchase and return secondhand items.
Our NOLs may also be subject to limitations under state law. We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our Class A common stock less attractive to investors.
Our NOLs may also be subject to limitations under state law. We are an emerging growth company and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors.
Further, natural disasters, such as earthquakes, hurricanes, tornadoes, fires, floods and other adverse weather and climate conditions; unforeseen public health crises, such as pandemics and epidemics; political crises, such as Russia’s invasion of Ukraine and the Israel-Hamas war, terrorist attacks, war and other political instability; or other catastrophic events, whether occurring in the United States or internationally, could disrupt our operations in any of our offices and distribution centers or the operations of one or more of our third-party providers or vendors. 19 Table of Contents Further, while we carry insurance for the secondhand and resale items in our distribution centers, the number of carriers which provide for such insurance has declined, which has resulted in increased premiums and deductibles.
Further, natural disasters, such as earthquakes, hurricanes, tornadoes, fires, floods and other adverse weather and climate conditions; unforeseen public health crises, such as pandemics and epidemics; political crises, such as Russia’s invasion of Ukraine and the Israel-Hamas war, terrorist attacks, war and other political instability; or other catastrophic events, whether occurring in the United States or internationally, could disrupt our operations in any of our offices and distribution centers or the operations of one or more of our third-party providers or vendors. 18 Table of Contents Further, while we carry insurance for the secondhand and resale items in our distribution centers, the number of carriers which provide for such insurance has declined, which has resulted in increased premiums and deductibles.
We also expect that being a public company and being subject to these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
We also expect that being a public company and being subject to these rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
Any violation of the FCPA or other applicable anti-corruption laws and anti-bribery laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, suspension or disbarment from United States government contracts, substantial diversion of management’s attention, significant legal fees and fines, severe criminal or civil sanctions against us, our officers or our employees, disgorgement of profits, and other sanctions and remedial measures, and prohibitions on the conduct of our business, any of which 32 Table of Contents could harm our reputation, business, results of operations, financial condition and prospects and the price of our Class A common stock.
Any violation of the FCPA or other applicable anti-corruption laws and anti-bribery laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, suspension or disbarment from United States government contracts, substantial diversion of management’s attention, significant legal fees and fines, severe criminal or civil sanctions against us, our officers or our employees, disgorgement 31 Table of Contents of profits, and other sanctions and remedial measures, and prohibitions on the conduct of our business, any of which could harm our reputation, business, results of operations, financial condition and prospects and the price of our Class A common stock.
Additionally, public scrutiny of or complaints about technology companies or their data practices, even if unrelated to our business, industry, or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks. 25 Table of Contents Interruptions or delays in the services provided by third-party data centers, Internet service providers, our managed infrastructure or our payment processors could prevent existing and potential buyers and sellers from accessing our marketplaces, and our business could suffer.
Additionally, public scrutiny of or complaints about technology companies or their data practices, even if unrelated to our business, industry, or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks. 24 Table of Contents Interruptions or delays in the services provided by third-party data centers, Internet service providers, our managed infrastructure or our payment processors could prevent existing and potential buyers and sellers from accessing our marketplaces, and our business could suffer.
In addition, our business and financial condition could be adversely affected by unfavorable changes in or interpretations of existing laws, rules and regulations or the promulgation of new laws, rules and regulations applicable to us and our business particularly following the change in Presidential administration, including those relating to the internet and e-commerce, such as geo-blocking and other geographically based restrictions, internet advertising and price display, consumer protection, anti-corruption, antitrust and competition, economic and trade sanctions, tax, banking, data security, network and information systems security, data protection, privacy and escheatment and unclaimed property.
In addition, our business and financial condition could be adversely affected by unfavorable changes in or interpretations of existing laws, rules and regulations or the promulgation of new laws, rules and regulations applicable to us and our business particularly following the change in Presidential administration, including those relating to the internet and e-commerce, such as geo-blocking and other geographically based restrictions, internet advertising and price display, consumer protection, anti-corruption, antitrust and competition, economic and trade sanctions, tax, banking, data security, network and information systems security, data protection, privacy, AI and ML, and escheatment and unclaimed property.
If one or more of these third-party package-delivery providers increases its prices or were to experience a major work stoppage or other disruption, preventing our products from being delivered in a timely fashion or causing us to incur additional shipping costs we could not pass on to our customers, our costs could increase and our business and results of operations could be adversely affected. 11 Table of Contents We rely on consumer discretionary spending and have been and may continue to be adversely affected by economic downturns and other macroeconomic conditions or trends.
If one or more of these third-party package-delivery providers increases its prices or were to experience a major work stoppage or other disruption, preventing our products from being delivered in a timely fashion or causing us to incur additional shipping costs we could not pass on to our customers, our costs could increase and our business and results of operations could be adversely affected. 10 Table of Contents We rely on consumer discretionary spending and have been and may continue to be adversely affected by economic downturns and other macroeconomic conditions or trends.
Those enactments could harm our business operations, and our business, results of operations and financial condition. Further, application of income and tax laws is subject to interpretation and existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us.
Enactments of tax laws could harm our business operations, and our business, results of operations and financial condition. Further, application of income and tax laws is subject to interpretation and existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us.
Accordingly, these shares will be able to be freely sold in the public market upon issuance, subject to existing lock-up or market standoff agreements, volume limitations under Rule 144 for our executive officers and directors and applicable vesting requirements. 40 Table of Contents In addition, certain holders of our common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock issuable upon conversion of such shares or to include such shares in registration statements that we may file for us or other stockholders.
Accordingly, these shares will be able to be freely sold in the public market upon issuance, subject to existing lock-up or market standoff agreements, volume limitations under Rule 144 for our executive officers and directors and applicable vesting requirements. 39 Table of Contents In addition, certain holders of our common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock issuable upon conversion of such shares or to include such shares in registration statements that we may file for us or other stockholders.
This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions requiring stockholder approval, and that may depress the trading price of our Class A common stock. 9 Table of Contents Risks Relating to Our Business and Industry Our continued growth depends on attracting new, and retaining existing, buyers.
This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions requiring stockholder approval, and that may depress the trading price of our Class A common stock. 8 Table of Contents Risks Relating to Our Business and Industry Our continued growth depends on attracting new, and retaining existing, buyers.
Any of these risks could cause us to lose our ability to accept online payments, make payments to sellers or conduct other payment transactions, any of which could make our marketplaces less convenient and attractive and adversely affect our ability to attract and retain buyers and sellers, which could harm our business, results of operations and financial condition. 26 Table of Contents Activity on mobile devices by buyers and sellers depends upon effective use of mobile operating systems, networks and standards that we do not control.
Any of these risks could cause us to lose our ability to accept online payments, make payments to sellers or conduct other payment transactions, any of which could make our marketplaces less convenient and attractive and adversely affect our ability to attract and retain buyers and sellers, which could harm our business, results of operations and financial condition. 25 Table of Contents Activity on mobile devices by buyers and sellers depends upon effective use of mobile operating systems, networks and standards that we do not control.
If we, the third parties that handle the shipments or our sellers and buyers do not comply with applicable laws, regulations and contractual requirements with respect to such shipments, it could lead to litigation or other claims against us, resulting in increased legal expenses and costs. 30 Table of Contents Numerous states within the United States and municipalities, including the States of California and New York, have regulations regarding the handling of secondhand items and licensing requirements of secondhand dealers.
If we, the third parties that handle the shipments or our sellers and buyers do not comply with applicable laws, regulations and contractual requirements with respect to such shipments, it could lead to litigation or other claims against us, resulting in increased legal expenses and costs. 29 Table of Contents Numerous states within the United States and municipalities, including the States of California and New York, have regulations regarding the handling of secondhand items and licensing requirements of secondhand dealers.
If any of these events were to occur, it could harm our business, results of operations and financial condition. 29 Table of Contents Risks Relating to Legal, Regulatory, Accounting and Tax Matters Failure to comply with applicable laws or regulations, including those relating to the resale of secondhand items, or changes to such laws, rules or regulations may subject us to investigations, audits, fines, penalties, registration and approval or other governmental enforcement action.
If any of these events were to occur, it could harm our business, results of operations and financial condition. 28 Table of Contents Risks Relating to Legal, Regulatory, Accounting and Tax Matters Failure to comply with applicable laws or regulations, including those relating to the resale of secondhand items, or changes to such laws, rules or regulations may subject us to investigations, audits, fines, penalties, registration and approval or other governmental enforcement action.
If we fail to effectively locate, hire and retain such personnel, our operations could be negatively impacted, which could harm our business, results of operations and financial condition. 17 Table of Contents Further, the success of our business depends on our ability to maintain our current distribution centers and, in the future, secure additional distribution centers that meet our business needs and are also in geographic locations with access to a large, qualified talent pool.
If we fail to effectively locate, hire and retain such personnel, our operations could be negatively impacted, which could harm our business, results of operations and financial condition. 16 Table of Contents Further, the success of our business depends on our ability to maintain our current distribution centers and, in the future, secure additional distribution centers that meet our business needs and are also in geographic locations with access to a large, qualified talent pool.
The successful assertion of one or more large claims against us that exceed available insurance coverage or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could harm our business, results of operations, financial condition and reputation. 24 Table of Contents Our use and other processing of personal information and other data is subject to laws and regulations relating to privacy, data protection and information security.
The successful assertion of one or more large claims against us that exceed available insurance coverage or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could harm our business, results of operations, financial condition and reputation. 23 Table of Contents Our use and other processing of personal information and other data is subject to laws and regulations relating to privacy, data protection and information security.
Any such harm may be immediate without affording us an opportunity for redress or correction and could have an adverse effect on our reputation, business, results of operations, financial condition and prospects. 43 Table of Contents The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
Any such harm may be immediate without affording us an opportunity for redress or correction and could have an adverse effect on our reputation, business, results of operations, financial condition and prospects. 42 Table of Contents The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
These risks include, but are not limited to, the following: • Our continued growth depends on attracting new, and retaining existing, buyers. • If we fail to attract a sufficient amount of high-quality and desirable secondhand items, our business, results of operations and financial condition could be harmed. • Our business, including our costs and supply of secondhand items, is subject to risks associated with sourcing, itemizing, warehousing and shipping. • Our ability to incorporate artificial intelligence, machine learning and other emergent technologies into our business operations successfully may affect our reputation and results of operations. • We have experienced growth in many of our recent periods and those growth rates may not be indicative of our future growth.
These risks include, but are not limited to, the following: • Our continued growth depends on attracting new, and retaining existing, buyers. • If we fail to attract a sufficient amount of high-quality and desirable secondhand items, our business, results of operations and financial condition could be harmed. • Our business, including our costs and supply of secondhand items, is subject to risks associated with sourcing, itemizing, warehousing and shipping. 7 Table of Contents • Our ability to incorporate artificial intelligence, machine learning and other emergent technologies into our business operations successfully may affect our reputation and results of operations. • We have experienced growth in many of our recent periods and those growth rates may not be indicative of our future growth.
As such, additional taxes or other assessments may be in excess of our current tax reserves or may require us to modify our business practices to reduce our exposure to additional taxes going forward, any of which may have a material adverse effect on our business, results of operations, financial condition and prospects. 34 Table of Contents Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As such, additional taxes or other assessments may be in excess of our current tax reserves or may require us to modify our business practices to reduce our exposure to additional taxes going forward, any of which may have a material adverse effect on our business, results of operations, financial condition and prospects. 33 Table of Contents Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
We also use Google services for our business emails, file storage and communications. Our business would be disrupted if any of the third-party software, services or other technology we utilize, or functional equivalents thereof, were unavailable due to extended outages or interruptions or because they are no longer available on 28 Table of Contents commercially reasonable terms or prices.
We also use Google services for our business emails, file storage and communications. Our business would be disrupted if any of the third-party software, services or other technology we utilize, or functional equivalents thereof, were unavailable due to extended outages or interruptions or because they are no longer available on 27 Table of Contents commercially reasonable terms or prices.
If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations and financial condition would be harmed. 23 Table of Contents Risks Relating to Information Technology, Intellectual Property, Data Security and Privacy Compromises of our data security could cause us to incur unexpected expenses and may materially harm our reputation and results of operations.
If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations and financial condition would be harmed. 22 Table of Contents Risks Relating to Information Technology, Intellectual Property, Data Security and Privacy Compromises of our data security could cause us to incur unexpected expenses and may materially harm our reputation and results of operations.
An important goal of our brand promotion strategy is establishing trust with our buyers and sellers. 21 Table of Contents For buyers, maintaining our brand and reputation requires that we foster trust through timely and reliable fulfillment of orders, responsive and effective customer service, a broad supply of desirable brands and secondhand items and an exciting and user-friendly interface on our marketplaces and through our RaaS relationships.
An important goal of our brand promotion strategy is establishing trust with our buyers and sellers. 20 Table of Contents For buyers, maintaining our brand and reputation requires that we foster trust through timely and reliable fulfillment of orders, responsive and effective customer service, a broad supply of desirable brands and secondhand items and an exciting and user-friendly interface on our marketplaces and through our RaaS relationships.
If we implement new marketing and advertising strategies, we may incur significantly higher costs than our current channels, which, in turn, could adversely affect our results of operations. 16 Table of Contents Implementing new marketing and advertising strategies also could increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective.
If we implement new marketing and advertising strategies, we may incur significantly higher costs than our current channels, which, in turn, could adversely affect our results of operations. 15 Table of Contents Implementing new marketing and advertising strategies also could increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective.
In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer. 22 Table of Contents We have previously sought, and may in the future seek, to make strategic investments in companies developing products or technologies that we believe could complement our business, enhance our technical capabilities, or otherwise offer growth opportunities.
In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer. 21 Table of Contents We have previously sought, and may in the future seek, to make strategic investments in companies developing products or technologies that we believe could complement our business, enhance our technical capabilities, or otherwise offer growth opportunities.
We may also fail to properly implement or market our AI solutions and features. 10 Table of Contents In addition, issues relating to our and our vendors’ use of new and evolving technologies such as AI and ML may cause us to experience brand or reputational harm, competitive harm, legal liability and new or enhanced governmental or regulatory scrutiny, and to incur additional costs to resolve such issues.
We may also fail to properly implement or market our AI solutions and features. 9 Table of Contents In addition, issues relating to our and our vendors’ use of new and evolving technologies such as AI and ML may cause us to experience brand or reputational harm, competitive harm, legal liability and new or enhanced governmental or regulatory scrutiny, and to incur additional costs to resolve such issues.
If we are unable to protect our trademarks or domain names, our brand recognition and reputation would suffer, we would incur significant expense establishing new brands and our results of operations would be adversely impacted. 27 Table of Contents We rely in part on trade secrets, proprietary know-how and other confidential information to maintain our competitive position.
If we are unable to protect our trademarks or domain names, our brand recognition and reputation would suffer, we would incur significant expense establishing new brands and our results of operations would be adversely impacted. 26 Table of Contents We rely in part on trade secrets, proprietary know-how and other confidential information to maintain our competitive position.
As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock. 39 Table of Contents We cannot predict the effect our dual-class structure may have on the market price of our Class A common stock.
As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock. 38 Table of Contents We cannot predict the effect our dual-class structure may have on the market price of our Class A common stock.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq and we may potentially be subject to sanctions or investigations by the SEC or other regulatory authorities. 33 Table of Contents Changes in existing financial accounting standards or practices may harm our results of operations.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq and we may potentially be subject to sanctions or investigations by the SEC or other regulatory authorities. 32 Table of Contents Changes in existing financial accounting standards or practices may harm our results of operations.
Each item that we offer through our marketplaces is unique and requires multiple touch points, including inspection, evaluation, photography, pricing, application of a unique SKU, and fulfillment. This process is complex and we have in the past, and may continue to have more Clean Out Kits from sellers than we can timely process.
Each item that we offer through our marketplaces is unique and requires multiple touch points, including inspection, evaluation, photography, pricing, application of a unique SKU, and fulfillment. This process is complex and we have in the past, and may continue to have more Clean Out Bags from sellers than we can timely process.
Additionally, our RaaS clients could go out of business or declare bankruptcy. If our RaaS offerings are not profitable and do not result in us acquiring a high-quality supply of secondhand items from our RaaS clients and/or their customers, who become our sellers, and reaching additional buyers, our business, results of operations and financial condition could be harmed.
Additionally, our RaaS clients could go out of business or declare bankruptcy. If our RaaS offerings do not result in us acquiring a high-quality supply of secondhand items from our RaaS clients and/or their customers, who become our sellers, and reaching additional buyers, our business, results of operations and financial condition could be harmed.
For example, disruption to processing of Clean Out Kits and distribution caused by a backlog of Clean Out Kits has led and could potentially lead to additional delays in our ability to process secondhand items sellers send in for resale, resulting in delays in sellers receiving payouts and less refreshing of our supply on our marketplaces, and could harm our brand and reputation.
For example, disruption to processing of Clean Out Bags and distribution caused by a backlog of Clean Out Bags has led and could potentially lead to additional delays in our ability to process secondhand items sellers send in for resale, resulting in delays in sellers receiving payouts and less refreshing of our supply on our marketplaces, and could harm our brand and reputation.
Additionally, our organizational structure is becoming more complex as we scale our operational, financial and management controls as well as our reporting systems and procedures. 13 Table of Contents To manage growth in our operations and the growth in the number of buyers and sellers on our platform, we will need to continue to grow and improve our operational, financial and management controls and our reporting systems and procedures.
Additionally, our organizational structure is becoming more complex as we scale our operational, financial and management controls as well as our reporting systems and procedures. 12 Table of Contents To manage growth in our operations and the growth in the number of buyers and sellers on our platform, we will need to continue to grow and improve our operational, financial and management controls and our reporting systems and procedures.
We maintain a robust and varied set of RaaS offerings including provision of our Clean Out Kits at our RaaS clients’ retail stores, our cash out marketplace offering, white-label resale shops, the resale of worn retail items provided to us by our RaaS clients and cross-listing our products on our RaaS clients’ websites.
We maintain a robust and varied set of RaaS offerings including provision of our Clean Out Bags at our RaaS clients’ retail stores, our cash out marketplace offering, white-label resale shops, the resale of worn retail items provided to us by our RaaS clients and cross-listing our products on our RaaS clients’ websites.
National retailers and brands set their own retail prices and promotional discounts on new items, which could adversely affect our value proposition to buyers and harm our business, results of operations and financial condition. 18 Table of Contents National retailers and brands set pricing for their own new retail items, which can include promotional discounts.
National retailers and brands set their own retail prices and promotional discounts on new items, which could adversely affect our value proposition to buyers and harm our business, results of operations and financial condition. 17 Table of Contents National retailers and brands set pricing for their own new retail items, which can include promotional discounts.
For example, in 2022, we implemented a fee for sellers to order a Clean Out Kit and made changes to our return policy, which have led and could potentially in the future lead to an increase in customer service requests from both our buyers and our sellers.
For example, in 2022, we implemented a fee for sellers to order a Clean Out Bag and made changes to our return policy, which have led and could potentially in the future lead to an increase in customer service requests from both our buyers and our sellers.
Further, the terms of any new or additional financing may be on terms that are more restrictive or on terms that are less desirable to us. Recent increases in interest rates and volatility in the capital markets may increase our borrowing costs and affect our ability to raise additional funds.
Further, the terms of any new or additional financing may be on terms that are more restrictive or on terms that are less desirable to us. Volatility in interest rates and in the capital markets may increase our borrowing costs and affect our ability to raise additional funds.
If we or our third-party credit card payment processors fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our buyers and sellers in addition to the consequences that could arise from such action or inaction violating or being alleged to violate applicable laws, regulations, contractual obligations or other obligations, including those regulating to privacy, data protection and data security as outlined above, including harm to our reputation and market position.
If we or our third-party credit card payment processors fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our buyers and sellers in addition to the consequences that could arise from such action or inaction violating or being alleged to violate applicable laws, regulations, contractual obligations or other obligations, including those regulating to privacy, data protection and data security as outlined above, including harm to our reputation 30 Table of Contents and market position.
Unfavorable conditions in our industry or the global economy could limit our ability to grow our business and negatively affect our results of operations. 20 Table of Contents Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers.
Unfavorable conditions in our industry or the global economy could limit our ability to grow our business and negatively affect our results of operations. 19 Table of Contents Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers.
The market price of our Class A common stock has, and may in the future, fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets and/or publicly-listed technology and retail companies; • actual or anticipated fluctuations in our revenue or other operating metrics; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the financial projections we provide to the public or our failure to meet those projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; • the international economy as a whole and market conditions in our industry; • adverse economic and market conditions, including declines in consumer discretionary spending, currency fluctuations, inflation and geopolitical instability; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, new services, features or capabilities, acquisitions, strategic partnerships or investments, joint ventures or capital commitments; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to data privacy and cyber security; • actual or perceived data privacy and cybersecurity incidents impacting us or others in our industry; • lawsuits threatened or filed against us; • any major change in our board of directors, management or key personnel; • costs and timing of expenses related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; • other events or factors, including those resulting from war (including Russia’s invasion of Ukraine , the Israel-Hamas war and other conflicts in the Middle East), incidents of terrorism, pandemics (including the COVID-19 pandemic), elections or responses to these events; • whether investors or securities analysts view our stock structure unfavorably, particularly our dual-class structure and the significant voting control of our executive officers, directors and their affiliates; and • sales of additional shares of our Class A common stock by us or our stockholders.
The market price of our Class A common stock has, and may in the future, fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets and/or publicly-listed technology and retail companies; • actual or anticipated fluctuations in our revenue or other operating metrics; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the financial projections we provide to the public or our failure to meet those projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; • the international economy as a whole and market conditions in our industry; • adverse economic and market conditions, including declines in consumer discretionary spending, currency fluctuations, inflation and geopolitical instability; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, new services, features or capabilities, acquisitions, strategic partnerships or investments, joint ventures or capital commitments; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to data privacy and cyber security; • actual or perceived data privacy and cybersecurity incidents impacting us or others in our industry; • lawsuits threatened or filed against us; • any major change in our board of directors, management or key personnel; • costs and timing of expenses related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; • other events or factors, including those resulting from war (including Russia’s invasion of Ukraine , the Israel-Hamas war and other conflicts in the Middle East), incidents of terrorism, pandemics (including the COVID-19 pandemic), elections or responses to these events; • whether investors or securities analysts view our stock structure unfavorably, particularly our dual-class structure and the significant voting control of our executive officers, directors and their affiliates; and • sales of additional shares of our Class A common stock by us or our stockholders. 37 Table of Contents In addition, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. 8 Table of Contents Risk Factor Summary Our business is subject to numerous risks and uncertainties, including those highlighted in this section titled “Risk Factors” and summarized below.
In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Risk Factor Summary Our business is subject to numerous risks and uncertainties, including those highlighted in this section titled “Risk Factors” and summarized below.
Any of these could have an adverse impact on our business, results of operations, financial condition 31 Table of Contents and prospects. Our failure to adequately prevent fraudulent transactions could damage our reputation and market position, result in claims, litigation or regulatory investigations and proceedings or lead to expenses that could harm our business, results of operations and financial condition.
Any of these could have an adverse impact on our business, results of operations, financial condition and prospects. Our failure to adequately prevent fraudulent transactions could damage our reputation and market position, result in claims, litigation or regulatory investigations and proceedings or lead to expenses that could harm our business, results of operations and financial condition.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 42 Table of Contents General Risks We depend on our executive officers and other key personnel, and if we are unable to recruit and retain highly skilled employees or contractors our business could be harmed.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 41 Table of Contents General Risk Factors We depend on our executive officers and other key personnel, and if we are unable to recruit and retain highly skilled employees or contractors our business could be harmed.
In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy, invest in our growth strategy and compete against companies who are not subject to such restrictions. 36 Table of Contents While we were in compliance with our debt covenants as of December 31, 2024, we may not be able to maintain compliance with the covenants in the future.
In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy, invest in our growth strategy and compete against companies who are not subject to such restrictions. 35 Table of Contents While we were in compliance with our debt covenants as of December 31, 2025, we may not be able to maintain compliance with the covenants in the future.
We are party to an amended and restated loan and security agreement with Western Alliance Bank, which was amended on December 14, 2023, which contains a number of covenants that restrict our and our subsidiaries’ ability to, among other things, incur additional indebtedness, materially change our business, convey, sell, lease, transfer or dispose of the business or our property, except under certain circumstances, merge or consolidate with other companies or acquire other companies, create or incur liens, pay any dividends on our Class A common stock, make certain investments and engage in certain other activities.
We are party to an amended and restated loan and security agreement with Western Alliance Bank, which was amended on January 30, 2026, which contains a number of covenants that restrict our and our subsidiaries’ ability to, among other things, incur additional indebtedness, materially change our business, convey, sell, lease, transfer or dispose of the business or our property, except under certain circumstances, merge or consolidate with other companies or acquire other companies, create or incur liens, pay any dividends on our Class A common stock, make certain investments and engage in certain other activities.
We may not be able to find and identify desirable acquisition targets or we may not be successful in entering into an agreement with any one target.
We may not be able to find desirable acquisition targets or we may not be successful in entering into an agreement with any one target.
While the Company has experienced an ownership change since its inception, an immaterial amount of NOLs has been limited as of December 31, 2024.
While the Company has experienced an ownership change since its inception, an immaterial amount of NOLs has been limited as of December 31, 2025.
Economic conditions in particular regions may also be affected by natural disasters, such as earthquakes, extreme weather events and wildfires; unforeseen public health crises, such as pandemics and epidemics; political crises, such as a government shutdown, terrorist attacks, war and other incidents of political instability, such as Russia’s invasion of Ukraine, the Israel-Hamas war and other conflicts in the Middle East, and the risk of increased tensions between China and Taiwan, or other catastrophic events, whether occurring in the United States or internationally.
Economic conditions in particular regions may also be affected by natural disasters, such as earthquakes, extreme weather events and wildfires; unforeseen public health crises, such as pandemics and epidemics; political crises, such as a government shutdown, terrorist attacks, war and other incidents of political instability, such as Russia’s invasion of Ukraine, the Israel-Hamas war, the recent military actions in Iran by the U.S. and Israel and other conflicts in the Middle East, and the risk of increased tensions between China and Taiwan, or other catastrophic events, whether occurring in the United States or internationally.
As of December 31, 2024, we have the ability to incur up to $48.8 million in indebtedness under our loan and security agreement, as amended, with a maturity date of July 14, 2027 and as of December 31, 2024 had incurred $22.3 million of indebtedness pursuant to this agreement.
As of December 31, 2025, we had the ability to incur up to $48.8 million in indebtedness under our loan and security agreement, as amended, with a maturity date of July 14, 2027 and as of December 31, 2025 had incurred $18.3 million of indebtedness pursuant to this agreement.
The indebtedness generally bears interest at the prime rate published in the Wall Street Journal plus a margin of 1.25% with a floor of 4.75% per annum; the applicable interest rate as of December 31, 2024 was 8.75% per annum.
The indebtedness generally bore interest at the prime rate published in the Wall Street Journal plus a margin of 1.25% with a floor of 4.75% per annum; the applicable interest rate as of December 31, 2025 was 8.00% per annum.
Our revenue from continuing operations was $260.0 million and $258.5 million for the years ended December 31, 2024 and 2023, respectively, representing annual growth of 1% and 7%, respectively. In future periods, we may not be able to sustain or increase revenue growth rates consistent with recent history, or at all.
Our revenue from continuing operations was $310.8 million and $260.0 million for the years ended December 31, 2025 and 2024, respectively, representing an annual growth of 19.5%. In future periods, we may not be able to sustain or increase revenue growth rates consistent with recent history, or at all.
We have a history of losses and we anticipate increasing operating expenses in the future. We may not be able to achieve and maintain profitability. 14 Table of Contents We experienced losses from continuing operations of $40.0 million and $52.4 million in the years ended December 31, 2024 and 2023, respectively.
We have a history of losses and we anticipate increasing operating expenses in the future. We may not be able to achieve and maintain profitability. 13 Table of Contents We experienced losses from continuing operations of $20.2 million and $40.0 million in the years ended December 31, 2025 and 2024, respectively.
We estimate this reserve based on historical return trends. The introduction of new products in the retail market, changes in consumer confidence or other competitive and general economic conditions have caused, and may in the future cause, actual returns to exceed our reserve for return rates.
The introduction of new products in the retail market, changes in consumer confidence or other competitive and general economic conditions have caused, and may in the future cause, actual returns to exceed our reserve for return rates.
There is significant uncertainty around the future profitability of our RaaS offerings and whether they will result in an increased number of new and repeat buyers, an increased number of new and repeat sellers selling high-quality secondhand items, increased awareness of our brand and an additional source of revenue.
There is significant uncertainty around whether our RaaS offerings will result in an increased number of new and repeat buyers, an increased number of new and repeat sellers selling high-quality secondhand items, and increased awareness of our brand.
Government regulators and law enforcement officials may allege that our services violate, or aid and abet violations of certain laws, including laws restricting or prohibiting the transferability and, by extension, the resale, of stolen items.
Additionally, we may fail to prevent sellers from supplying stolen items. Government regulators and law enforcement officials may allege that our services violate, or aid and abet violations of certain laws, including laws restricting or prohibiting the transferability and, by extension, the resale, of stolen items.
Moreover, because of these fluctuations, comparing our results of operations on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.
You should not rely on our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.
As of December 31, 2024, the holders of shares of our Class B common stock collectively owned shares representing approximately 76.1% of the voting power of our outstanding capital stock, and our directors, executive officers and their affiliates beneficially owned in the aggregate 77.6% of the voting power of our capital stock.
As of December 31, 2025, the holders of shares of our Class B common stock collectively owned shares representing approximately 66.0% of the voting power of our outstanding capital stock, and our directors, executive officers and their affiliates beneficially owned in the aggregate 73.5% of the voting power of our capital stock.
As of December 31, 2024, we had 13,742,560 options outstanding that, if fully exercised, would result in the issuance of shares of Class B common stock, as well as 9,287,881 shares of Class A common stock subject to Restricted Stock Units (“RSU”) awards.
As of December 31, 2025, we had 9,411,304 options outstanding that, if fully exercised, would result in the issuance of shares of Class B common stock, as well as 8,930,137 shares of Class A common stock subject to Restricted Stock Units (“RSU”) awards.
The terms of our loan and security agreement may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs or to execute business strategies in the means or manner desired.
We are also required to maintain financial covenants, including minimum cash and liquidity requirements. The terms of our loan and security agreement may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs or to execute business strategies in the means or manner desired.
We may also be subject to allegations that an item we sold is not authentic despite our efforts to inspect such item and/or our general authentication practices. Such controversy could negatively impact our reputation and brand and harm our business and results of operations. Additionally, we may fail to prevent sellers from supplying stolen items.
We have been in the past and may in the future be subject to allegations that an item we sold is not authentic despite our efforts to inspect such item and/or our general authentication practices. Such controversy could negatively impact our reputation and brand and harm our business and results of operations.
We have processing and distribution centers across four strategic U.S. locations: Arizona, Georgia, Pennsylvania and Texas.
We have processing and distribution centers across four strategic locations in the United States (“U.S.”): Arizona, Georgia, Pennsylvania and Texas.
Partly as a result of rising costs, we have in the past, and may in the future announce price increases in standard shipping fees for our customers. In the future, however, we may not be able to pass such increases on to our customers.
We have recently experienced increased shipping costs as a result, and these costs may continue to increase in the future. Partly as a result of rising costs, we have in the past, and may in the future announce price increases in standard shipping fees for our customers.
If some investors find our Class A common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our Class A common stock and the market price of our Class A common stock may be more volatile.
If some investors find our Class A Common Stock less attractive as a result, there may be a less active trading market for our Class A Common Stock and our stock price may decline or become more volatile.
Any such event could adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, which could result in breaches of our financial and other contractual obligations, any of which could materially and adversely impact our business, results of operations and financial condition. 37 Table of Contents Risks Relating to Ownership of Our Class A Common Stock The market price of our Class A common stock may be volatile or may decline regardless of our operating performance.
Any such event could adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, which could result in breaches of our financial and other contractual obligations, any of which could materially and adversely impact our business, results of operations and financial condition.
You may lose all or part of your investment. Prior to our IPO, there was no public market for shares of our Class A common stock. The market prices of our Class A common stock and the securities of other newly public companies have been highly volatile.
Risks Relating to Ownership of Our Class A Common Stock The market price of our Class A common stock may be volatile or may decline regardless of our operating performance. You may lose all or part of your investment. Prior to our IPO, there was no public market for shares of our Class A common stock.
Greater than expected item return rates have, and in the future could have, a negative impact on our revenue. We allow buyers to return certain purchases from our website and mobile application under our return policy. We record a reserve for returns against proceeds to us from the resale of items on our marketplaces in calculating revenue.
In the future, however, we may not be able to pass such increases on to our customers. Greater than expected item return rates have, and in the future could have, a negative impact on our revenue. We allow buyers to return certain purchases from our website and mobile application under our return policy.
The dual-class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to our IPO, including our directors, executive officers and their respective affiliates.
Such a stock price decline could occur even when we have met any previously publicly stated revenue or earnings forecasts that we may provide. The dual-class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to our IPO, including our directors, executive officers and their respective affiliates.
In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and harm our business, results of operations and financial condition.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and harm our business, results of operations and financial condition. Moreover, because of these fluctuations, comparing our results of operations on a period-to-period basis may not be meaningful.
Although we do not have any deposits with any of the banks that have been placed into receivership to date, if any of our banking partners, lenders, or counterparties to certain financial instruments were to be placed into receivership, we may be unable to access such funds.
These events exposed vulnerabilities in the regional banking sector, including liquidity constraints, contagion and solvency risk and other legal uncertainties and caused significant volatility in the market prices of the common stock of certain other regional banks. 36 Table of Contents Although we do not have any deposits with any of the banks that have been placed into receivership to date, if any of our banking partners, lenders, or counterparties to certain financial instruments were to be placed into receivership, we may be unable to access such funds.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, we could face significant limitations on our ability to invest in our operations and otherwise suffer harm to our business. Recent events affecting the financial services industry could have an adverse impact on our business, results of operations and financial conditions.
If the capital markets experience continued volatility, we may be unable to obtain additional financing on favorable terms, or at all, which would significantly limit our ability to invest in our operations and otherwise suffer harm to our business. Adverse developments affecting the financial services industry could have an adverse impact on our business, results of operations and financial conditions.
Furthermore, the current volatility in the global oil markets has resulted in higher fuel prices, which many shipping companies have passed on to their customers by way of increased fuel surcharges. We have recently experienced increased shipping costs as a result, and these costs may continue to increase in the future.
Furthermore, the current volatility in the global oil markets has resulted in higher fuel prices, which many shipping companies have passed on to their customers by way of increased fuel surcharges. Recent military operations by the U.S. and Israel in Iran could lead to even more significant spikes in global energy prices.
As of December 31, 2024, we had outstanding a total of 88,060,829 shares of Class A common stock and 28,073,643 shares of Class B common stock.
As of December 31, 2025, we had outstanding a total of 106,357,685 shares of Class A common stock and 20,668,731 shares of Class B common stock.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including: • not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; • reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and • exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and we will not be required to hold non-binding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
In addition, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Often, stock prices of many companies have fluctuated in ways unrelated or disproportionate to the operating performance of those companies.
Often, stock prices of many companies have fluctuated in ways unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility.
We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on the exemptions afforded emerging growth companies and smaller reporting companies.
Additionally, investors may find our Class A Common Stock less attractive to the extent we rely on the exemptions and relief granted by the JOBS Act.
We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, we conduct application security assessments, vulnerability management, penetration testing, security audits, and ongoing risk assessments as part of our risk management process. We also maintain an incident response plan to guide our processes in the event of an incident. We also have a process to require corporate employees to undertake cybersecurity training and compliance programs annually.
Biggest changeIn addition, we conduct application security assessments, vulnerability management, penetration testing, security audits, and ongoing risk assessments as part of our risk management process. We also maintain an incident response plan to guide our processes in the event of an incident. We also have a process by which corporate employees undertake cybersecurity training and compliance program training annually.
The Chief Product and Technology Officer has primary responsibility for assessing and managing our cybersecurity threat management program, informed by over fifteen years of experience leading cross-functional organizations in the development and operation of large-scale systems, primarily focused on e-commerce.
The Chief Product and Technology Officer has primary responsibility for assessing and managing our cybersecurity threat management program, informed by over sixteen years of experience leading cross-functional organizations in the development and operation of large-scale systems, primarily focused on e-commerce.
Cyber Risk Management and Strategy 44 Table of Contents Under the oversight of the Board of Directors and Audit Committee, we have implemented and maintain a risk management program that includes processes for the systematic identification, assessment, management, and treatment of cybersecurity risks.
Cyber Risk Management and Strategy 43 Table of Contents Under the oversight of the Board of Directors and Audit Committee, we have implemented and maintain a risk management program that includes processes for the systematic identification, assessment, management, and treatment of cybersecurity risks.
The Head of Internal Audit reports to the Chair of the Audit Committee and has thirteen years of experience with internal audit oversight and risk management. The Head of Internal Audit and the Chief Operating Officer have overall responsibility for the Company-wide risk management program.
The Head of Internal Audit reports to the Chair of the Audit Committee and has fourteen years of experience with internal audit oversight and risk management. The Head of Internal Audit and the Chief Operating Officer have overall responsibility for the Company-wide risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease additional corporate facilities in Scottsdale, Arizona. 45 Table of Contents We lease and operate four distribution centers, in Arizona, Georgia, Pennsylvania and Texas, at which we receive and process primarily secondhand and resale items from sellers, ship purchases to buyers and receive and process any returns from buyers.
Biggest changeWe also lease additional corporate facilities in Scottsdale, Arizona. 44 Table of Contents We lease and operate four distribution centers, in Arizona, Georgia, Pennsylvania and Texas, at which we receive and process primarily secondhand and resale items from sellers, ship purchases to buyers and receive and process any returns from buyers.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. Item 4. Mine Safety Disclosures Not applicable. 46 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. Item 4. Mine Safety Disclosures Not applicable. 45 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarch 26, December 31, 2021 2021 2022 2023 2024 ThredUp Inc. $ 100.00 $ 63.80 $ 6.55 $ 11.25 $ 6.95 Nasdaq Composite $ 100.00 $ 119.08 $ 79.66 $ 114.25 $ 146.98 S&P Retail Select Industry $ 100.00 $ 102.68 $ 69.24 $ 82.80 $ 91.52 Recent Sales of Unregistered Securities None.
Biggest changeMarch 26, December 31, 2021 2021 2022 2023 2024 2025 ThredUp Inc. $ 100.00 $ 63.80 $ 6.55 $ 11.25 $ 6.95 $ 31.95 Nasdaq Composite $ 100.00 $ 119.08 $ 79.66 $ 114.25 $ 146.98 $ 176.90 S&P Retail Select Industry $ 100.00 $ 102.68 $ 69.24 $ 82.80 $ 91.52 $ 97.72 Recent Sales of Unregistered Securities None.
Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act. 47 Table of Contents We have presented below the cumulative total return to our stockholders in comparison to the Nasdaq Composite Index (Nasdaq Composite) and the Standard and Poor’s Retail Select Index (S&P Retail Select Industry).
Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act. 46 Table of Contents We have presented below the cumulative total return to our stockholders in comparison to the Nasdaq Composite Index (Nasdaq Composite) and the Standard and Poor’s Retail Select Index (S&P Retail Select Industry).
All values assume a $100 initial investment on March 26, 2021, the date our Class A common stock began trading on the Nasdaq Global Select Market, through December 31, 2024 and data for the Nasdaq Composite and S&P Retail Select Industry over the same period assume reinvestment of dividends.
All values assume a $100 initial investment on March 26, 2021, the date our Class A common stock began trading on the Nasdaq Global Select Market, through December 31, 2025 and data for the Nasdaq Composite and S&P Retail Select Industry over the same period assume reinvestment of dividends.
Purchases of Equity Securities by the Issuer None. Item 6. [Reserved] 48 Table of Contents
Purchases of Equity Securities by the Issuer None. Item 6. [Reserved] 47 Table of Contents
There is no public trading market for our Class B common stock. Holders As of the close of business on February 24, 2025, there were 19 holders of record of our Class A common stock and 68 holders of record of our Class B common stock.
There is no public trading market for our Class B common stock. Holders As of the close of business on February 23, 2026, there were 16 holders of record of our Class A common stock and 55 holders of record of our Class B common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThis Improvement in operating assets and liabilities was primarily due to: a $12.2 million increase in accounts payables, accrued and other liabilities, primarily reflecting the timing of payments and increased vendor spending; a $3.9 million decrease in accounts receivable due to timing of cash receipts from payment processors; and a $1.0 million increase in operating lease liabilities.
Biggest changeThis improvement was partially offset by a $3.1 million higher net use of cash from changes in operating assets and liabilities, which primarily reflected $8.4 million of cash used for accounts payable, accrued and other liabilities reflecting the timing of vendor payments and recognition of breakage revenue from gift cards, and $3.3 million of cash used for other assets reflecting the timing of payments and receipts associated with prepaid expenses and other receivables and change in inventory balances following the transition from a product to a consignment model, partially offset by $8.8 million of cash provided by seller payable, primarily reflecting increased seller credit issuance and the timing of conversion to gift cards.
See below for a reconciliation of Non-GAAP Adjusted EBITDA (loss) from continuing operations to its most directly comparable GAAP measure, loss from continuing operations. Active Buyers An Active Buyer is a ThredUp buyer who has made at least one purchase in the last twelve months.
See below for a reconciliation of Non-GAAP Adjusted EBITDA from continuing operations to its most directly comparable GAAP measure, loss from continuing operations. Active Buyers An Active Buyer is a ThredUp buyer who has made at least one purchase in the last twelve months.
We believe that Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.
We believe that Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.
Judgment is required in determining the appropriate grouping of gift cards for analyzing breakage rates, redemption patterns, and estimating the ultimate value of gift cards not expected to be redeemed. 57 Table of Contents Stock-Based Compensation We estimate the fair value of stock options and the ESPP at the grant date using the Black-Scholes option-pricing model (the “Black-Scholes Model”).
Judgment is required in determining the appropriate grouping of gift cards for analyzing breakage rates, redemption patterns, and estimating the ultimate value of gift cards not expected to be redeemed. 55 Table of Contents Stock-Based Compensation We estimate the fair value of stock options and the ESPP at the grant date using the Black-Scholes option-pricing model (the “Black-Scholes Model”).
Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Kit, fill and return it to us using our prepaid label.
Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Bag, fill and return it to us using our prepaid label.
This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in January 2023.
This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in January 2025.
Based upon our current operating plans, we believe that our existing cash, cash equivalents, short-term marketable securities, and remaining availability under the Term Loan will be sufficient for at least the next 12 months to meet our short- and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term.
Based upon our current operating plans, we believe that our existing cash, cash equivalents and short-term marketable securities will be sufficient for at least the next 12 months to meet our short- and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term.
See Note 8, Long-Term Debt , to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for a further discussion on our Term Loan. We expect operating losses to continue in 2025 as we continue to invest in growing our business and our infrastructure.
See Note 7, Long-Term Debt , to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for a further discussion on our Term Loan. 53 Table of Contents We expect operating losses to continue in 2026 as we continue to invest in growing our business and our infrastructure.
Additionally, we have a term loan facility (“Term Loan”) under which $22.5 million remained available to be drawn as of December 31, 2024 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date.
Additionally, we have a Term Loan under which $22.5 million remained available to be drawn as of December 31, 2025 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date.
We retain a percentage of the proceeds received as payment for our consignment service. We report consignment revenue on a net basis as an agent and not the gross amount collected from the buyer. We recognize consignment revenue upon purchase of the seller’s secondhand item by the buyer.
We retain a percentage of the proceeds received as payment for our consignment service. We report revenue on a net basis as an agent and not the gross amount collected from the buyer. We recognize revenue upon purchase of the seller’s secondhand item by the buyer. Revenue is recognized net of discounts, incentives and returns.
Accordingly, any discussion of historical information in Management’s Discussion and Analysis below reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.
Accordingly, any discussion of historical information in the following sections reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.
We use Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, which are non-GAAP measures, to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes.
Non-GAAP Adjusted EBITDA from continuing operations margin represents Non-GAAP Adjusted EBITDA from continuing operations divided by Revenue. We use Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin, which are non-GAAP measures, to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes.
However, we expect that our capital expenditures will remain modest in 2025.
However, we expect that our capital expenditures will remain modest in 2026.
Orders Orders means the total number of orders placed by buyers across our marketplaces, including through our RaaS clients, in a given period, net of cancellations. 50 Table of Contents Non-GAAP Financial Measures from Continuing Operations Non-GAAP Adjusted EBITDA (Loss) from continuing operations and Non-GAAP Adjusted EBITDA (Loss) from continuing operations Margin Non-GAAP Adjusted EBITDA (loss) from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, severance and other reorganization costs, interest expense, and provision for income taxes.
Orders Orders means the total number of orders placed by buyers across our marketplaces, including through our RaaS clients, in a given period, net of cancellations. 49 Table of Contents Non-GAAP Financial Measures from Continuing Operations Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations Margin Non-GAAP Adjusted EBITDA from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, interest expense, impairment of long-lived assets, legal settlement and fees, provision for income taxes, severance and other reorganization costs, and gains related to non-marketable equity investment.
See Note 11, Commitments and Contingencies , to the consolidated financial statements included in Part I, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information regarding our purchase obligations. 56 Table of Contents For a further discussion on our operating lease commitments and long-term debt as of December 31, 2024, see the sections above as well as Note 7, Leases , and Note 8, Long-Term Debt , to the consolidated financial statements included in Part I, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
For a further discussion on our operating lease commitments and long-term debt as of December 31, 2025, see the sections above as well as Note 6, Leases , and Note 7, Long-Term Debt , to the consolidated financial statements included in Part I, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
We believe RaaS will accelerate the growth of this emerging category and form the backbone of the modern resale experience. Recent Business Developments Discontinued Operations On November 30, 2024, we divested 91% of our European business and Bulgarian subsidiary, Remix, which qualified for reporting as a discontinued operation.
We believe RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy and other services. Recent Business Developments Discontinued Operations On November 30, 2024, we divested 91% of our European business and Bulgarian subsidiary, Remix, which qualified for reporting as a discontinued operation.
Changes in Cash Flows from Continuing Investing Activities Net cash used in continuing investing activities was $10.3 million for the year ended December 31, 2024, compared to net cash provided of $46.6 million for the same period in 2023.
Changes in Cash Flows from Continuing Investing Activities Net cash used in continuing investing activities was $7.2 million for the year ended December 31, 2025, compared to $10.3 million for the same period in 2024.
Non-GAAP Adjusted EBITDA (loss) from continuing operations (1) : Non-GAAP Adjusted EBITDA from continuing operations was $8.7 million, or 3.3% of revenue, for the year ended December 31, 2024 as compared to a non-GAAP Adjusted EBITDA (loss) from continuing operations of $(5.3) million, or (2.1)% of revenue, for the same period in 2023.
Non-GAAP Adjusted EBITDA from continuing operations (1) : Non-GAAP Adjusted EBITDA from continuing operations was $13.5 million, or 4.4% of revenue, for the year ended December 31, 2025, compared to $8.7 million, or 3.3% of revenue, for the same period in 2024, representing an increase of 55.8% year over year.
The increase was primarily due to a $1.0 million increase in facilities, technology, and other costs, partially offset by a $0.8 million decrease in personnel-related costs following our workforce reorganization in March 2024.
This increase was partially offset by a $0.4 million decrease in personnel-related costs, primarily due to severance costs incurred in the prior year related to our March 2024 workforce reorganization, and a $0.3 million decrease in facility, technology, and other costs.
Year Ended December 31, 2024 2023 Change (in thousands, except percentages) Active Buyers (as of period end) 1,274 1,357 (6.1) % Orders 4,850 4,879 (0.6) % Total revenue $ 260,031 $ 258,504 0.6 % Gross profit $ 207,125 $ 198,468 4.4 % Gross margin 79.7 % 76.8 % Loss from continuing operations $ (39,999) $ (52,356) 23.6 % Loss from continuing operations margin (15.4) % (20.3) % Non-GAAP Adjusted EBITDA (loss) from continuing operations (1) $ 8,679 $ (5,319) 263.2 % Non-GAAP Adjusted EBITDA (loss) from continuing operations margin 3.3 % (2.1) % (1) Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies.
Year Ended December 31, 2025 2024 Change (in thousands, except percentages) Active Buyers (as of period end) 1,650 1,274 29.5 % Orders 6,075 4,850 25.3 % Revenue $ 310,813 $ 260,031 19.5 % Gross profit $ 246,753 $ 207,125 19.1 % Gross margin 79.4 % 79.7 % Loss from continuing operations $ (20,214) $ (39,999) (49.5) % Loss from continuing operations margin (6.5) % (15.4) % Non-GAAP Adjusted EBITDA from continuing operations (1) $ 13,524 $ 8,679 55.8 % Non-GAAP Adjusted EBITDA from continuing operations margin 4.4 % 3.3 % (1) Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies.
Marketing Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Marketing $ 48,639 $ 51,388 $ (2,749) (5.3) % Marketing as a percentage of total revenue 18.7 % 19.9 % Marketing expenses decreased $2.7 million or 5.3% for the year ended December 31, 2024 as compared to the same period in 2023.
Marketing Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Marketing $ 58,982 $ 48,639 $ 10,343 21.3 % Marketing as a percentage of revenue 19.0 % 18.7 % Marketing expenses increased $10.3 million or 21.3% for the year ended December 31, 2025 as compared to the same period in 2024.
Our cash flow forecast is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. 55 Table of Contents Our future capital requirements will depend on many factors, including but not limited to, the timing of our increased distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings and new RaaS clients, the continuing growth of our marketplaces and overall economic conditions.
Our future capital requirements will depend on many factors, including but not limited to, the timing of our increased distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings, the continuing growth of our marketplaces and overall economic conditions.
Active Buyers and Orders: Active Buyers totaled 1.3 million and Orders totaled 4.9 million in 2024, representing decreases of 6.1% and 0.6%, respectively, compared to the prior year.
Active Buyers and Orders: Active Buyers totaled 1.7 million and Orders totaled 6.1 million in 2025, compared to 1.3 million and 4.9 million, respectively, in 2024, representing increases of 29.5% and 25.3%, respectively, year over year.
Our primary sources of liquidity are cash flows generated from operations, cash on hand and borrowings available under the Term Loan. Our primary use of cash includes seller payouts and product inventory costs, operating costs such as distribution network spend, product and technology expenses, marketing expenses, personnel expenses and other expenditures necessary to support our operations and our growth.
Our primary use of cash includes seller payouts, operating costs such as distribution network spend, product and technology, marketing, personnel-related expenses, and other expenditures necessary to support our operations and our growth, as well as repayments on our Term Loan. Additionally, our primary capital expenditures are related to the set-up, expansion and/or automation of our distribution network.
Product and technology costs include personnel costs for the design and development of product and the related technology that is used to operate our distribution centers, merchandise science, website development and related expenses for these departments. Operations, product and technology expenses also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent.
Distribution center operating costs mainly include personnel costs, inbound shipping costs (excluding amounts capitalized to inventory), distribution center rent, equipment, maintenance, and depreciation. Product and technology costs include personnel costs for the design and development of product and the related technology that is used to operate our distribution centers, merchandise science, website development and related expenses for these departments.
As a result, Remix’s results, including the loss on divestiture, are presented as a single line item, loss from discontinued operations, net of tax in the consolidated statements of income and excluded from continuing operations for all periods presented.
As a result, Remix’s results for 2024, reflecting the period from the beginning of the year through the transaction date, are presented as a single line item, loss from discontinued operations, net of tax, and excluded from continuing operations in the consolidated statements of operations for the year ended December 31, 2024.
We expect operations, product and technology expenses to increase in absolute dollars in future periods to support our growth, especially as costs to increase our supply (inbound costs) are generally incurred prior to the expected revenue growth. Additionally, we expect to continue investing in automation and other technology improvements to support and drive efficiency in our operations.
Operations, product and technology expenses also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. We expect operations, product and technology expenses to increase in absolute dollars in future periods to support our growth, especially as costs to increase our supply (inbound costs) are generally incurred prior to the expected revenue growth.
Operations, Product and Technology Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Operations, product, and technology $ 142,210 $ 143,339 $ (1,129) (0.8) % Operations, product, and technology as a percentage of total revenue 54.7 % 55.4 % Operations, product, and technology expenses decreased $1.1 million or 0.8% for the year ended December 31, 2024 as compared to the same period in 2023.
Operations, Product and Technology Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Operations, product, and technology $ 152,859 $ 142,210 $ 10,649 7.5 % Operations, product, and technology as a percentage of revenue 49.2 % 54.7 % Operations, product, and technology expenses increased $10.6 million or 7.5% for the year ended December 31, 2025 as compared to the same period in 2024, while decreasing as a percentage of revenue.
These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, including business acquisitions. We expect these expenses to increase in absolute dollars and decrease as a percentage of revenue over the longer term due to better leverage in our operations.
Additionally, we expect to continue investing in automation and other technology improvements to support and drive efficiency in our operations. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, including business acquisitions.
Additionally, we recognize breakage revenue for the portion of gift card values that are not expected to be redeemed. Previously, breakage revenue was estimated when gift card redemption was deemed remote. Beginning in 2024, with more historical data available, breakage revenue is estimated based upon historical customer redemption patterns.
Sales tax assessed by governmental authorities is excluded from revenue. We recognize revenue from gift cards when the gift cards are redeemed by the customer. Additionally, we recognize breakage revenue for the portion of gift card values that are not expected to be redeemed. Previously, breakage revenue was estimated when gift card redemption was deemed remote.
Sales, general and administrative also includes payment processing fees, professional fees and allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. We expect to increase sales, general and administrative expense as we grow our infrastructure to support operating as a public company and the overall growth in our business.
We expect to increase sales, general and administrative expense as we grow our infrastructure to support operating as a public company and the overall growth in our business.
Gross margin increased by 290 basis points to 79.7% from 76.8% year-over-year. 49 Table of Contents Loss from continuing operations: Loss from continuing operations was $40.0 million, or a negative 15.4% of revenue, for the year ended December 31, 2024 as compared to a loss of $52.4 million, or a negative 20.3% of revenue, for the same period in 2023.
Loss from continuing operations: Loss from continuing operations was $20.2 million, or a negative 6.5% of revenue, for the year ended December 31, 2025, compared to a loss of $40.0 million, or a negative 15.4% of revenue, for the same period in 2024, representing a decrease of 49.5% year over year.
The decrease in marketing expenses as a percentage of total revenue was due to a decrease in marketing spend offset by an increase in total revenue, reflecting our efforts to optimize marketing efficiency while leveraging higher revenue growth. 54 Table of Contents Sales, General and Administrative Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Sales, general and administrative $ 56,895 $ 56,739 $ 156 0.3 % Sales, general and administrative as a percentage of total revenue 21.9 % 21.9 % Sales, general, and administrative expenses remained relatively flat, with a modest increase of $0.2 million or 0.3% for the year ended December 31, 2024 as compared to the same period in 2023.
The marketing expenses as a percentage of revenue remained relatively consistent year over year. 52 Table of Contents Sales, General and Administrative Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Sales, general and administrative $ 56,658 $ 56,895 $ (237) (0.4) % Sales, general and administrative as a percentage of revenue 18.2 % 21.9 % Sales, general, and administrative expenses remained relatively stable year over year, with a decrease of $0.2 million or 0.4% for the year ended December 31, 2025 as compared to the same period in 2024.
The $0.8 million increase in continuing financing cash outflows was primarily driven by a $1.5 million decrease in proceeds from issuance of stock-based awards, partially offset by a $0.7 million increase in payroll taxes paid on stock-based award activity. Contractual Obligations Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business.
The $4.0 million decrease in continuing financing cash outflows was primarily driven by a $24.3 million increase in proceeds from issuance of stock-based awards, driven by a higher stock price, partially offset by a $20.3 million increase in payroll taxes paid on stock-based award activity.
Overview of 2024 Results from Continuing Operations Revenue: Total revenue was $260.0 million, an increase of 0.6% year-over-year. Gross Profit and Margin: Gross profit totaled $207.1 million, representing an increase of 4.4% year-over-year.
Overview of 2025 Results from Continuing Operations Revenue: Revenue totaled $310.8 million for the year ended December 31, 2025, compared to $260.0 million for the year ended December 31, 2024, representing an increase of 19.5% year over year. 48 Table of Contents Gross Profit and Margin: Gross profit totaled $246.8 million for the year ended December 31, 2025, compared to $207.1 million for the year ended December 31, 2024, representing an increase of 19.1% year over year.
See the section titled “Risk Factors—Risks Relating to Our Indebtedness and Liquidity—We may require additional capital to support business growth, and this capital might not be available or may be available only by diluting existing stockholders.” Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net cash provided by (used in): Continuing operating activities $ 4,903 $ (9,818) Continuing investing activities (10,260) 46,556 Continuing financing activities (4,392) (3,603) Net change in cash, cash equivalents and restricted cash from continuing operations $ (9,749) $ 33,135 Changes in Cash Flows from Continuing Operating Activities Net cash provided by continuing operating activities was $4.9 million for the year ended December 31, 2024, compared to net cash used of $9.8 million for the same period in 2023.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2025 2024 (in thousands) Net cash provided by (used in): Continuing operating activities $ 10,652 $ 4,903 Continuing investing activities (7,166) (10,260) Continuing financing activities (397) (4,392) Net change in cash, cash equivalents and restricted cash from continuing operations $ 3,089 $ (9,749) Changes in Cash Flows from Continuing Operating Activities Net cash provided by continuing operating activities was $10.7 million for the year ended December 31, 2025, compared to $4.9 million for the same period in 2024.
The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA (loss) from continuing operations: Year Ended December 31, 2024 2023 (in thousands) Loss from continuing operations $ (39,999) $ (52,356) Stock-based compensation expense 25,847 29,652 Depreciation and amortization 17,328 14,227 Severance and other reorganization costs 2,949 900 Interest expense 2,525 2,239 Provision for income taxes 29 19 Non-GAAP Adjusted EBITDA (loss) from continuing operations $ 8,679 $ (5,319) Presentation Revenue Our revenue is comprised of consignment revenue and product revenue.
The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA from continuing operations: Year Ended December 31, 2025 2024 (in thousands) Loss from continuing operations $ (20,214) $ (39,999) Stock-based compensation expense 19,003 25,847 Depreciation and amortization 12,924 17,328 Interest expense 1,919 2,525 Impairment of long-lived assets 1,070 — Legal settlement and fees 247 — Provision for income taxes 59 29 Severance and other reorganization costs — 2,949 Gains related to non-marketable equity investments (1,484) — Non-GAAP Adjusted EBITDA from continuing operations $ 13,524 $ 8,679 Presentation Revenue Beginning in the first quarter of 2025, we combined consignment revenue and product revenue into a single line item, revenue, on the consolidated statements of operations and similarly combined related cost of revenue line items.
Liquidity and Capital Resources We have historically generated negative cash flows from operations and have primarily financed our operations through private and public sales of equity securities and debt. As of December 31, 2024, we had cash, cash equivalents and short-term marketable securities of $44.2 million.
Liquidity and Capital Resources We generated positive cash flows from continuing operations of $10.7 million for the year ended December 31, 2025. We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”).
Changes in Cash Flows from Continuing Financing Activities Net cash used in continuing financing activities was $4.4 million for the year ended December 31, 2024, compared to net cash used of $3.6 million for the same period in 2023.
The $3.1 million decrease in continuing investing cash outflows was primarily driven by an $11.1 million decrease in purchases of marketable securities, partially offset by a $4.1 million decrease in maturities in marketable securities and a $3.9 million increase in purchases of property and equipment. 54 Table of Contents Changes in Cash Flows from Continuing Financing Activities Net cash used in continuing financing activities was $0.4 million for the year ended December 31, 2025, compared to $4.4 million for the same period in 2024.
Interest Expense Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Interest expense $ (2,525) $ (2,239) $ (286) 12.8 % Interest expense increased $0.3 million for the year ended December 31, 2024 as compared to the same period in 2023.
Interest Expense Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Interest expense $ (1,919) $ (2,525) $ 606 (24.0) % Interest expense decreased $0.6 million or 24.0% for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to a lower interest rate environment and reduced outstanding debt balances.
The decrease was primarily due to a $5.6 million decrease in personnel-related costs following our workforce reorganization in March 2024, of which $3.0 million was related to stock-based compensation expense, partially offset by a $2.7 million increase in advertising costs and a $0.2 million increase in facilities, technology and other costs.
The decrease was primarily due to a $4.4 million decrease in personnel-related costs, mainly attributable to lower stock-based compensation expense and severance costs incurred in the prior year related to our March 2024 workforce reorganization.
Both amounts were included within loss from discontinued operations, net of tax in the consolidated statements of operations for the year ended December 31, 2024. See Note 15, Discontinued Operations, to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further details on the transaction.
See Note 10, Commitments and Contingencies , to the consolidated financial statements included in Part I, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for additional information regarding our purchase obligations.
We expect our marketing expenses to fluctuate as a percentage of revenue as we intend to increase marketing spend to drive the growth of our business. Sales, General and Administrative Sales, general and administrative expense consists of personnel costs for employees involved in general corporate functions, including accounting, finance, tax, legal and people services, and customer service.
Sales, General and Administrative Sales, general and administrative expense consists of personnel costs for employees involved in general corporate functions, including accounting, finance, tax, legal and people services, and customer service. Sales, general and administrative also includes payment processing fees, professional fees and allocation of corporate facilities and information technology costs such as equipment, depreciation and rent.
Other Income, Net Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Other income, net $ 3,174 $ 2,900 $ 274 9.4 % Other income, net increased $0.3 million for the year ended December 31, 2024 as compared to the same period in 2023.
Other Income, Net Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Other income, net $ 3,510 $ 3,174 $ 336 10.6 % Other income, net increased $0.3 million or 10.6% for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to $1.5 million of gains related to non-marketable equity investments, partially offset by a $0.9 million decrease in interest income resulting from lower interest rates and $0.3 million in legal settlement and related fees.
As of December 31, 2024, the value of our non-cancellable unconditional purchase obligations was $9.4 million.
Contractual Obligations Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2025, the value of our non-cancellable unconditional purchase obligations was $3.5 million.
The decrease in operations, product, and technology expenses as a percentage of total revenue was primarily due to a decrease in operations, product, and technology spend offset by an increase in total revenue, reflecting our ongoing efforts to optimize costs, improve operational efficiency, and leverage economies of scale.
The increase was partially offset by a $1.2 million decrease in facilities, technology and other distribution center-related costs. Overall, the decrease in operations, product, and technology expenses as a percentage of revenue reflects improved operating efficiency, cost optimization efforts, and benefits from economies of scale.
Additionally, consignment revenue includes bag fees charged to sellers for processing Clean Out Kits. Product revenue We also generate product revenue primarily from the sale of items that we own, which we refer to as our inventory. We recognize product revenue, net of discounts, incentives and returns.
Revenue is recognized net of seller payouts, discounts, incentives and returns. Additionally, revenue includes sales of company-owned inventory and bag fees charged to sellers for processing Clean Out Bags. We expect revenue to continue to increase as we grow our Active Buyers and Orders. Cost of Revenue Cost of revenue primarily consists of outbound shipping, outbound labor, and packaging costs.
Marketing Marketing expense consists primarily of advertising and public relations costs, and personnel costs for employees engaged in marketing. Marketing costs also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent.
Marketing costs also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. We expect our marketing expenses to fluctuate as a percentage of revenue as we intend to increase marketing spend to drive the growth of our business.
The $14.7 million increase in continuing operating cash inflows was primarily driven by a $12.4 million reduction in our loss from continuing operations, offset by a $2.2 million decrease in non-cash charges, and $4.5 million of improvements in operating assets and liabilities.
The $5.7 million increase in net cash provided by continuing operating activities was driven by an $8.9 million improvement in loss from continuing operations adjusted for non-cash items, reflecting higher revenue and lower operating losses from continuing operations.
Removed
In the third quarter of 2024, we recorded a $9.8 million impairment of long-lived assets in connection with the decision to exit the European market, coupled with the decline in our market capitalization. In the fourth quarter, we recognized an $11.3 million loss on the Remix divestiture.
Added
Cash flows attributable to Remix are segregated and presented separately as net cash flow used in discontinued operating activities and net cash flow used in discontinued investing activities for the period through the transaction date during the year ended December 31, 2024 in the consolidated statements of cash flows.
Removed
Non-GAAP Adjusted EBITDA (loss) from continuing operations margin represents Non-GAAP Adjusted EBITDA (loss) from continuing operations divided by Total revenue.
Added
Tax Reform On July 4, 2025, the U.S. enacted a budget reconciliation package known as the One Big Beautiful Bill Act of 2025 (OBBBA) which includes both tax and non-tax provisions. The changes resulting from the tax provisions in OBBBA did not have a material impact on the Company’s consolidated financial statements.
Removed
Consignment revenue We generate consignment revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers. We recognize consignment revenue, net of seller payouts, discounts, incentives and returns. We expect consignment revenue to continue to increase as we grow our Active Buyers and Orders.
Added
Gross margin was 79.4%, a decrease of 30 basis points from 79.7% for the same period in 2024.
Removed
We expect the percentage share of product revenue to decrease in the long term as we continue to focus on our consignment model and reduce owned inventory. Cost of Revenue Cost of consignment revenue Cost of consignment revenue consists of outbound shipping, outbound labor and packaging costs.
Added
With our transition to a primarily consignment model, product revenue is not material to warrant separate presentation on the consolidated statements of operations. Prior period amounts have been reclassified to conform to the current period’s presentation. We generate revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers.
Removed
We expect cost of consignment revenue to decrease and gross profit to increase as a percentage of consignment revenue as we continue to scale our business due to our ability to drive leverage in shipping, labor and packaging. 51 Table of Contents Cost of product revenue Cost of product revenue mainly consists of inventory cost, inbound shipping related to the sold merchandise, outbound shipping, outbound labor, packaging costs and inventory write-downs.
Added
We expect cost of revenue and gross profit as a percentage of revenue to remain relatively stable. 50 Table of Contents Operating Expenses Operations, Product and Technology Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses.
Removed
We expect cost of product revenue to decrease and gross profit to increase as a percentage of product revenue as we continue to scale our business due to our ability to drive leverage in shipping, labor and packaging.
Added
We expect these expenses to increase in absolute dollars and decrease as a percentage of revenue over the longer term due to better leverage in our operations. Marketing Marketing expense consists primarily of advertising and public relations costs, and personnel costs for employees engaged in marketing.
Removed
Operating Expenses Operations, Product and Technology Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses. Distribution center operating costs mainly include inbound shipping costs, other than those capitalized in inventory, as well as personnel costs, distribution center rent, maintenance and depreciation of equipment and leasehold improvements.
Added
Other Income, Net Other income, net primarily consists of non-operating income and expenses, including interest income earned on our investments in marketable securities and gains related to our non-marketable equity investments.
Removed
Certain 2023 interest costs in conjunction with the build-out of our distribution centers were reclassified from interest expense and capitalized.
Added
Financial Results from Continuing Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Revenue $ 310,813 $ 260,031 $ 50,782 19.5 % Revenue increased $50.8 million, or 19.5%, for the year ended December 31, 2025 as compared to the same period in 2024.
Removed
Other Income (Expense), Net Other income (expense), net primarily consists of non-operating income and expenses such as interest income earned on our investments in marketable securities. 52 Table of Contents Financial Results from Continuing Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Revenue Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Consignment revenue $ 246,186 $ 213,093 $ 33,093 15.5 % Product revenue 13,845 45,411 (31,566) (69.5) % Total revenue $ 260,031 $ 258,504 $ 1,527 0.6 % Consignment revenue as a percentage of Total revenue 94.7 % 82.4 % Product revenue as a percentage of Total revenue 5.3 % 17.6 % Total revenue increased $1.5 million, or 0.6%, for the year ended December 31, 2024 as compared to the same period in 2023.
Added
The growth in revenue was mainly driven by a 25.3% increase in Orders, supported by higher engagement from new buyers acquired in 2025. The growth was partially offset by a 0.6% decrease in average order value, as well as higher discounts and changes in seller payout mix.
Removed
The increase in revenue for the year ended December 31, 2024 as compared to the same period in 2023 was driven by a 15.5% growth in consignment revenue, partially offset by a 69.5% decrease in product revenue.
Added
These trends reflect the continued strength in our core marketplace business and our ongoing focus on driving platform growth. 51 Table of Contents Gross Margin Year Ended December 31, Change 2025 2024 Amount % (in thousands, except percentages) Cost of revenue $ 64,060 $ 52,906 $ 11,154 21.1 % Gross profit $ 246,753 $ 207,125 $ 39,628 19.1 % Gross margin 79.4 % 79.7 % Gross margin was 79.4% and 79.7% for the years ended December 31, 2025 and 2024, respectively, representing a decrease of 30 basis points.
Removed
The shift reflects our strategic decision to transition our RaaS clients from a product to a consignment model in the third quarter of 2023. The increase in total revenue was due primarily to a 10.6% increase in the average order value, offset by a 6.1% decrease in Active Buyers and a 0.6% decrease in Orders.
Added
Overall, gross margin remained relatively stable year over year, with the decrease primarily driven by higher outbound shipping and packaging costs.
Removed
Gross Margin Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Cost of consignment revenue $ 45,599 $ 39,732 $ 5,867 14.8 % Cost of product revenue 7,307 20,304 (12,997) (64.0) % Total cost of revenue $ 52,906 $ 60,036 $ (7,130) (11.9) % Gross profit $ 207,125 $ 198,468 $ 8,657 4.4 % Gross margin 79.7 % 76.8 % Consignment revenue is recognized net of seller payouts.
Added
The increase in absolute dollars was primarily due to a $9.0 million increase in personnel-related costs, primarily driven by higher distribution center headcount, a $1.8 million increase in inbound shipping costs driven by higher supply volume, and a $1.1 million impairment charge related to a warehouse lease incurred in 2025.
Removed
Seller payouts related to product revenue are included as a component of cost of product revenue. As such, product revenue has a lower gross margin than consignment revenue. Gross margin was 79.7% and 76.8% for the years ended December 31, 2024 and 2023, respectively, representing an increase of 290 basis points.
Added
The increase was primarily due to a $9.6 million increase in advertising costs and a $1.4 million increase in professional services, both related to our marketing initiatives aimed at driving customer engagement and platform growth.
Removed
The increase in gross margin for the year ended December 31, 2024 as compared to the same period in 2023 was primarily driven by a significantly higher proportion of revenue from the consignment model, which has a higher gross margin than the product model.
Added
This decrease was partially offset by a $1.8 million increase in payment processing fees and a $1.5 million increase in customer appeasement costs, both largely driven by higher order volume during the period, as well as a $0.8 million increase in professional services and other corporate costs.
Removed
The transition of our RaaS clients to the consignment model in 2023 contributed to the growth in our consignment revenue, positively impacting our gross margin.
Added
The decrease in sales, general, and administrative expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue and lower overall costs.
Removed
Consignment Gross Margin Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Cost of consignment revenue $ 45,599 $ 39,732 $ 5,867 14.8 % Consignment gross margin 81.5 % 81.4 % Consignment gross margin was 81.5% and 81.4% for the years ended December 31, 2024 and 2023, respectively, remaining relatively flat with a modest increase of 10 basis points, primarily driven by slightly lower outbound shipping and labor costs. 53 Table of Contents Product Gross Margin Year Ended December 31, Change 2024 2023 Amount % (in thousands, except percentages) Cost of product revenue $ 7,307 $ 20,304 $ (12,997) (64.0) % Product gross margin 47.2 % 55.3 % Product gross margin was 47.2% and 55.3% for the years ended December 31, 2024 and 2023, respectively, representing a decrease of 810 basis points.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInflation Risk In recent months, inflation has increased significantly in the U.S. and overseas where we conduct our business, resulting in rising interest rates and fuel, labor and processing, freight and other costs that have affected our gross margin and operating expenses.
Biggest changeInflation Risk As of December 31, 2025, inflation remains elevated relative to historical norms in the U.S. where we conduct our business, resulting in higher costs in areas such as fuel, labor and processing, freight and other costs that have affected our gross margin and operating expenses.
Due to the short- to intermediate-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to fluctuations in interest rates. 58 Table of Contents The Term Loan bears variable interest rates tied to the prime rate, with a floor of 4.75%, and therefore carries interest rate risk.
Due to the short- to intermediate-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to fluctuations in interest rates. 56 Table of Contents The Term Loan bears variable interest rates tied to the prime rate, with a floor of 4.75%, and therefore carries interest rate risk.
We believe these increases have negatively impacted our business and although difficult to quantify, inflation is potentially having an adverse effect on our customers’ ability to purchase in our marketplaces, resulting in slowing revenue and Order growth.
We believe these increases have negatively impacted our business, and although difficult to quantify, inflation is potentially having an adverse effect on our customers’ ability to purchase in our marketplaces, which could slow revenue and Order growth.
These risks primarily include: Interest Rate Risk As of December 31, 2024, we had cash and cash equivalents of $31.9 million and marketable securities of $12.3 million, consisting primarily of money market funds, commercial paper, U.S. treasury securities and U.S. government agency bonds, which carry a degree of interest rate risk.
These risks primarily include: Interest Rate Risk As of December 31, 2025, we had cash and cash equivalents of $38.6 million and marketable securities of $9.5 million, consisting primarily of money market funds, commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency bonds, which carry a degree of interest rate risk.

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