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What changed in ThredUp Inc.'s 10-K — 2023 vs 2024

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

+277 added−261 removedSource: 10-K (2025-03-03) vs 10-K (2024-03-05)

Top changes in ThredUp Inc.'s 2024 10-K

277 paragraphs added · 261 removed · 208 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe anticipate that over time revenue from the Remix platform will increasingly involve consignment sales as we have started to transition it to the Clean Out Kit model we pioneered in the United States market. Revenue from our RaaS offerings typically includes an upfront integration fee as well as ongoing service fees which are then recorded to consignment revenue.
Biggest changeOur 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.
The marketplaces we have built enable buyers in the United States (“U.S.”) and in Europe to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price.
The marketplaces we have built enable buyers in the United States (“U.S.”) to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price.
We also leverage data to power efficient customer acquisition and lifetime engagement, and to provide a personalized shopping experience. ThredUp’s data science portfolio leverages machine learning algorithms, predictive analytics, and other artificial intelligence technologies to identify trends, anomalies and correlations, provide alerts and initiate business processes.
We also leverage data to power efficient customer acquisition and lifetime engagement, and to provide a personalized shopping experience. ThredUp’s data science portfolio leverages machine learning algorithms, predictive analytics, and other artificial intelligence “AI” technologies to identify trends, anomalies and correlations, provide alerts and initiate business processes.
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. 6 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. 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.
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 2023 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 2025 or in the near future.
Sellers love ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Kit, fill it 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 Kit, fill and return it to us using our prepaid label.
We believe RaaS will accelerate the growth of this emerging category and form the backbone of the modern resale experience domestically and internationally. 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 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.
In addition, our proprietary algorithm technologies, other than those incorporated into a patent application, are protected by trade secret laws. 5 Table of Contents We also hold trademarks in the United States as well as in other jurisdictions. “THREDUP” and “Think Secondhand First” are our registered trademarks in the United States.
In addition, our proprietary algorithm technologies, other than those incorporated into a patent application, are protected by trade secret laws. We also hold trademarks in the United States as well as in other jurisdictions. “THREDUP” and “Think Secondhand First” are our registered trademarks in the United States.
We supplement our workforce with contractors and consultants in the United States and internationally, including Ukrainian information technology, or IT, specialists. These Ukrainian IT specialists, who provide services on our behalf, are registered as “private entrepreneurs” with the tax authorities of Ukraine and operate as independent contractors.
We supplement our workforce with contractors and consultants in the United States and internationally, including Ukrainian engineering specialists. These Ukrainian IT specialists, who provide services on our behalf, are registered as “private entrepreneurs” with the tax authorities of Ukraine and operate as independent contractors.
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.
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.
Human Capital Resources As of December 31, 2023, we had 2,377 employees and professional contractors, including 1,984 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, 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.
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 retailers, such as Amazon.com, Inc., Target Corporation, Kohl’s Corporation and Walmart Inc.; and • off-price retailers, such as Burlington Stores, Inc., Ross Stores, Inc. and The TJX Companies, Inc.
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.
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, 2023, we worked with over 50 RaaS clients, including Gap, Reformation, Madewell, Abercrombie, Cuyana and Hollister.
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.
In addition to our core marketplace, some of the world’s leading brands and retailers are already taking advantage of our Resale-as-a-Service (“RaaS”) offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.
We take it from there and do the work to make those accepted items available for resale. In addition to our core marketplace, some of the world’s leading brands and retailers are already taking advantage of our Resale-as-a-Service (“RaaS”) offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.
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”).
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.
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 GlobalData's assessment of the secondhand market in January 2024.
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.
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.
Other trademarks and trade names referred to in this annual report are the property of their respective owners. We also have registered domain names for websites that we use in our business, such as www.thredup.com and other variations.
We also have registered domain names for websites that we use in our business, such as www.thredup.com and other variations.
We have additional registered trademarks in the United States and “THREDUP” is registered in certain other non-United States jurisdictions. We also hold European Union trademarks for our Remix logo. We will pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective.
We have additional registered trademarks in the United States and “THREDUP” is registered in certain other non-United States jurisdictions. We will pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. Other trademarks and trade names referred to in this annual report are the property of their respective owners.
By locating our facilities in strategic locations across the country, we can be closer to our buyers and sellers, which allows us to reduce shipping times in transit, and lower our inbound and outbound shipping costs. Our European-based distribution center, which services nine countries in Central and Eastern Europe, is located in Sofia, Bulgaria. • Proprietary Software and Systems.
By locating our facilities in strategic locations across the country, we can be closer to our buyers and sellers, which allows us to reduce shipping times in transit, and lower our inbound and outbound shipping costs. In addition, our facilities are located in geographic locations with access to a large, qualified talent pools. • Proprietary Software and Systems.
We generate revenue primarily from items that are sold to buyers on our websites and mobile app and from integration and service fees charged in connection with our RaaS offerings. Our revenue is comprised of consignment sales and direct product sales.
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.
We drive continuous operational efficiency through proprietary technology and ongoing automation of our infrastructure. Our existing United States-based 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 processing and distribution centers are located in Arizona, Georgia, Pennsylvania, and Texas.
We believe that a unique perspective is critical to solving complex problems and inspiring the world to think secondhand first. Overall, as of December 31, 2023, 67% of our workforce identifies as female and 73% of our workforce identifies as minority, including 59% as Black or Latinx.
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.
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We take it from there and do the work to make those accepted items available for resale. In addition to Clean Out Kits, ThredUp also sources inventory from a variety of supply channels, such as wholesale supply in Europe.
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ThredUp also offers AI-powered shopping tools, including improved search, where customers can use natural language prompts to obtain relevant and personalized results. Our AI-powered image search allows shoppers to upload photos to find matching or similar items, making it easy to recreate a desired look.
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As of December 31, 2023, we operated distribution centers that could collectively hold more than 12.0 million items in locations across the United States and Europe. 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.
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We also offer Style Chat, an AI-powered chatbot, that helps customers create complete outfits based on natural language prompts that they provide.
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Our buyers generally pay us upfront when they purchase an item. 4 Table of Contents We recognize revenue from our Remix platform primarily through direct product sales.
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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.
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We have methodically scaled operating capacity and revenue, while increasing gross profit and improving our operating performance. During the year ended December 31, 2023, our buyers placed 6.9 million Orders, up 6.2% as compared to the same period in 2022. Competition Although we have built a scaled and highly differentiated platform and managed marketplace, we face intense competition.
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Unless otherwise noted as pertaining to “discontinued operations,” all commentary in this Annual Report on Form 10-K pertains solely to our continuing US operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Business Developments” for more information. Competition Although we have built a scaled and highly differentiated platform and managed marketplace, we face intense competition.
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As of December 31, 2023, 63% of our senior leadership team, which includes executives, senior vice presidents, vice presidents, senior directors, directors and general managers of operations, identifies as female and 21% of our senior leadership team identifies as minority, including 4% as Black or Latinx.
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Intellectual Property We believe that our intellectual property rights are valuable and important to our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

108 edited+44 added−23 removed391 unchanged
Biggest changeOur failure to address these risks or other issues encountered in connection with acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities and harm our business generally. 20 Table of Contents As an online secondhand marketplace, our success depends on the accuracy of our item acceptance process.
Biggest changeFor more information, see the section titled “Risk Factors—Risks Relating to Legal, Regulatory, Accounting and Tax Matters— We have recorded, and may be required to record in the future, significant charges if our long-lived assets and goodwill become impaired .” Our failure to address these risks or other issues encountered in connection with acquisitions, divestitures and investments could cause us to fail to realize the anticipated benefits, cause us to incur unanticipated liabilities and harm our business generally.
Further expansion of our business internationally, including as a result of acquisitions, increases our risks under these laws. In addition, in the future we may use third parties to operate our marketplaces or otherwise conduct business on our behalf, abroad.
Further future expansion of our business internationally, including as a result of acquisitions, increases our risks under these laws. In addition, in the future we may use third parties to operate our marketplaces or otherwise conduct business on our behalf, abroad.
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. 38 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. 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.
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; 10 Table of Contents • 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; • 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; • 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.
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. 17 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. 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.
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. 37 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. 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.
The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 39 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. 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.
Weak or volatile economic conditions in the global economy or individual markets, changes in gross domestic product growth, financial and credit market fluctuations, inflation, labor shortages, political turmoil, natural catastrophes, warfare and terrorist attacks on the United States and in the European region or elsewhere, including the Israel-Hamas war and other conflicts in the Middle East, and other events outside of our control could cause customers and prospective customers to reduce spending, and demand for our offerings may decline.
Weak or volatile economic conditions in the global economy or individual markets, changes in gross domestic product growth, financial and credit market fluctuations, inflation, labor shortages, political turmoil, natural catastrophes, warfare and terrorist attacks on the United States or elsewhere, including the Israel-Hamas war and other conflicts in the Middle East, and other events outside of our control could cause customers and prospective customers to reduce spending, and demand for our offerings may decline.
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.
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.
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. 24 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. 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.
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. 15 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. 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.
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. 22 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. 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.
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. 21 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. 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.
An important goal of our brand promotion strategy is establishing trust with our buyers and sellers. 19 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. 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.
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 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 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.
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. 36 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. 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.
In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. 7 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. 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.
As a smaller reporting company, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to: • Reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; • Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; and • Have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports.
As a smaller reporting company, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to: • Reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; • Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; and 35 Table of Contents • Have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports.
If we conduct additional debt financing, the terms of such debt financing may be similar or more restrictive. Additionally, there has recently been volatility in and disruptions to the global economy, including the equity and debt financial markets. Such volatility and economic downturns in general could limit our access to capital markets and increase our borrowing costs.
If we obtain additional debt financing, the terms of such debt financing may be similar or more restrictive. Additionally, there has recently been volatility in and disruptions to the global economy, including the equity and debt financial markets. Such volatility and economic downturns in general could limit our access to capital markets and increase our borrowing costs.
The loss of one or more of our executive officers, especially our founder and Chief Executive Officer, or other executive officers or key personnel could harm our business. In addition, our future success will depend upon our ability to hire for key functions, such as engineering, data science and marketing, as well as distribution center employees.
The loss of one or more of our executive officers, including our founder and Chief Executive Officer, or other executive officers or key personnel could harm our business. In addition, our future success will depend upon our ability to hire for key functions, such as engineering, data science and marketing, as well as distribution center employees.
Further, a prolonged third-party infrastructure service disruption affecting our core marketplace, RaaS websites or our Remix platform could damage our reputation with current buyers, sellers and RaaS clients, expose us to liability, make it difficult to attract and retain new and existing buyers, sellers and RaaS clients, or otherwise harm our business.
Further, a prolonged third-party infrastructure service disruption affecting our core marketplace or RaaS websites could damage our reputation with current buyers, sellers and RaaS clients, expose us to liability, make it difficult to attract and retain new and existing buyers, sellers and RaaS clients, or otherwise harm our business.
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. 16 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. 18 Table of Contents National retailers and brands set pricing for their own new retail items, which can include promotional discounts.
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. 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. 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.
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 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 28 Table of Contents commercially reasonable terms or prices.
If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things: • develop our marketplace services; 33 Table of Contents • expand our categories of secondhand and resale goods; • enhance our operating infrastructure; and • expand the markets in which we operate and potentially acquire complementary businesses and technologies.
If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things: • develop our marketplace services; • expand our categories of secondhand and resale goods; • enhance our operating infrastructure; and • expand the markets in which we operate and potentially acquire complementary businesses and technologies.
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. 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. 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.
As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not harm our business, results of operations and financial condition. 29 Table of Contents We are subject to anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.
As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not harm our business, results of operations and financial condition. We are subject to anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.
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. 35 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.
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.
There can be no assurance that any patents we obtain will adequately protect our inventions or survive a legal challenge, as the legal standards relating to the validity, enforceability and scope of protection of patent and other intellectual property rights are uncertain. 25 Table of Contents We rely on trademark and trade dress to protect our brand.
There can be no assurance that any patents we obtain will adequately protect our inventions or survive a legal challenge, as the legal standards relating to the validity, enforceability and scope of protection of patent and other intellectual property rights are uncertain. We rely on trademark and trade dress to protect our brand.
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. 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. 27 Table of Contents We rely in part on trade secrets, proprietary know-how and other confidential information to maintain our competitive position.
Although we have disaster recovery plans that utilize multiple third-party infrastructure service locations, the data centers that we use, including the Remix data center in the European Union are vulnerable to damage or interruption from human error, intentional bad acts, earthquakes, floods, fires, severe storms, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures, and similar events, many of which are beyond our control, any of which could disrupt our service, destroy user content, or prevent us from being able to continuously back up or record changes in our users’ content.
Although we have disaster recovery plans that utilize multiple third-party infrastructure service locations, the data centers that we use are vulnerable to damage or interruption from human error, intentional bad acts, earthquakes, floods, fires, severe storms, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures, and similar events, many of which are beyond our control, any of which could disrupt our service, destroy user content, or prevent us from being able to continuously back up or record changes in our users’ content.
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. 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. 33 Table of Contents Changes in existing financial accounting standards or practices may harm our results of operations.
If any of these events were to occur, it could harm our business, results of operations and financial condition. 27 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 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. 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.
These risks associated with usage of open source software, such as the lack of warranties or assurances of title, cannot be eliminated, and could, if not properly addressed, negatively affect our business and results of operations. 26 Table of Contents We rely on software, services and technology from other parties.
These risks associated with usage of open source software, such as the lack of warranties or assurances of title, cannot be eliminated, and could, if not properly addressed, negatively affect our business and results of operations. We rely on software, services and technology from other parties.
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.
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.
We are subject to anti-corruption and anti-bribery and similar laws, such as the United States Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the United States domestic bribery statute contained in 18 U.S.C. § 201, the United States.
We are subject to anti-corruption and anti-bribery and similar laws, such as the United States Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the United States domestic bribery statute contained in 18 U.S.C. § 201, the United States. Travel Act, the USA PATRIOT Act.
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, 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 and escheatment and unclaimed property.
While the Company has experienced an ownership change since its inception, an immaterial amount of NOLs has been limited as of December 31, 2023.
While the Company has experienced an ownership change since its inception, an immaterial amount of NOLs has been limited as of December 31, 2024.
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; 13 Table of Contents • actual or reported disruptions or defects in our online marketplace, such as actual or perceived privacy or data security breaches; • 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; • our ability to effectively manage our international operations; • the impact of market volatility and economic downturns, including those caused by outbreaks of disease, such as the COVID-19 pandemic, on our business; • adverse litigation judgments, other dispute-related settlement payments or other litigation-related costs; • regulatory fines; • 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, including the COVID-19 pandemic; 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 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.
We may not be able to achieve and maintain profitability. • 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 or on undesirable terms. • We have a limited operating history in an evolving industry, which makes it difficult to forecast our revenue, plan our expenses and evaluate our business and future prospects. • We may experience quarterly fluctuations in our results of operations due to a number of factors that make our future results difficult to predict and could cause our results of operations to fall below analyst or investor expectations. • Our advertising activity and strategic RaaS offerings may fail to efficiently drive growth in buyers and sellers, which could harm our business, results of operations and financial condition. • We may not be able to expand our distribution center operations, attract and retain personnel to efficiently and effectively manage the operations required to process, itemize, list, sell, pack and ship secondhand and resale items or identify and lease distribution centers in geographic regions that enable us to effectively scale our operations. • Compromises of our data security could cause us to incur unexpected expenses and may materially harm our reputation and results of operations. • The market price of our Class A common stock may be volatile or may decline regardless of our operating performance, and you could lose all or part of your investment. • 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 Initial Public Offering (“IPO”), including our directors, executive officers and their respective affiliates.
We may not be able to achieve and maintain profitability. • 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 or on undesirable terms. • We have a limited operating history in an evolving industry, which makes it difficult to forecast our revenue, plan our expenses and evaluate our business and future prospects. • We may experience quarterly fluctuations in our results of operations due to a number of factors that make our future results difficult to predict and could cause our results of operations to fall below analyst or investor expectations. • Our advertising activity and strategic RaaS offerings may fail to efficiently drive growth in buyers and sellers, which could harm our business, results of operations and financial condition. • Acquisitions, divestitures, strategic investments, partnerships and alliances involve numerous risks and uncertainties, could divert the attention of key management personnel, disrupt our business, dilute stockholder value and harm our results of operations and financial condition. • We may not be able to expand our distribution center operations, attract and retain personnel to efficiently and effectively manage the operations required to process, itemize, list, sell, pack and ship secondhand and resale items or identify and lease distribution centers in geographic regions that enable us to effectively scale our operations. • Compromises of our data security could cause us to incur unexpected expenses and may materially harm our reputation and results of operations. • The market price of our Class A common stock may be volatile or may decline regardless of our operating performance, and you could lose all or part of your investment. • 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 Initial Public Offering (“IPO”), including our directors, executive officers and their respective affiliates.
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. 32 Table of Contents We could be an emerging growth company for up to five years following the completion of the IPO.
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.
As of December 31, 2023, 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, 2023 had incurred $26.3 million of indebtedness pursuant to this agreement.
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.
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, 2023 was 9.75% per annum.
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 pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. Any acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In addition, we have limited experience in acquiring other businesses.
The pursuit of potential acquisitions and divestitures may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing such transactions, whether or not they are consummated. Any acquisition, divestiture, investment or other business relationship may result in unforeseen operating difficulties and expenditures. We also have limited experience in acquiring other businesses.
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, including the COVID-19 pandemic; political crises, such as a government shutdown, terrorist attacks, war and other incidents of political instability, such as Russia’s invasion of Ukraine, and the Israel-Hamas war and other conflicts in the Middle East 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 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.
However, completion of remediation does not provide assurance that our remediated controls will continue to operate properly or that our financial statements will be free from error. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
Completion of the remediation measures related to a material weakness does not provide assurance that our remediated controls will continue to operate properly or that our financial statements will be free from error. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
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. • 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. • 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.
However, our business has in the past, and may in the future be adversely affected by unseasonable weather conditions, including those resulting from climate change in both our U.S. and EU markets.
However, our business has in the past, and may in the future be adversely affected by unseasonable weather conditions, including those resulting from climate change.
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.
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.
As we continue to enhance automation and add capabilities, our operations may become increasingly complex. While we expect these technologies to improve productivity in many of our merchandising operations, including processing, itemizing, listing and selling, any flaws, bugs or failures of such technologies could cause interruptions in and delays to our operations, which may harm our business.
While we expect these technologies to improve productivity in many of our merchandising operations, including processing, itemizing, listing and selling, any flaws, bugs or failures of such technologies could cause interruptions in and delays to our operations, which may harm our business.
As of December 31, 2023, the holders of shares of our Class B common stock collectively owned shares representing approximately 79.2% of the voting power of our outstanding capital stock, and our directors, executive officers and their affiliates beneficially owned in the aggregate 81.1% of the voting power of our capital stock.
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.
We also expect our operating expenses to increase in future periods, and if our revenue growth does not increase to offset these anticipated increases in our operating expenses, our business, results of operations and financial condition will be harmed, and we may not be able to achieve or maintain profitability. 12 Table of Contents We have a history of losses and we anticipate increasing operating expenses in the future.
We also expect our operating expenses to increase in future periods, and if our revenue growth does not increase to offset these anticipated increases in our operating expenses, our business, results of operations and financial condition will be harmed, and we may not be able to achieve or maintain profitability.
Controls and Procedures” in this Annual Report on Form 10-K. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.
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.
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.
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.
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.
Nearly all of the secondhand items we offer through our marketplaces are initially sourced from sellers who are individuals. As a result, we may be subject to periodic fluctuations in the number, brands and quality of secondhand items sold through our marketplaces. Our results of operations could be negatively impacted by these fluctuations.
As a result, we may be subject to periodic fluctuations in the number, brands and quality of secondhand items sold through our marketplaces. Our results of operations could be negatively impacted by these fluctuations.
We have in the past and may in the future seek to acquire businesses, products or technologies that we believe could complement our business, enhance our technical capabilities or otherwise offer growth opportunities.
We have in the past and may in the future seek to acquire businesses, products or technologies that we believe could complement our business, enhance our technical capabilities or otherwise offer growth opportunities. In addition, we have in the past and may in the future divest businesses, including businesses that are no longer part of our strategic plans.
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.
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.
These competitive pressures in our market or our failure to compete effectively may result in price reductions, fewer buyers and sellers, reduced revenue, gross profit, and gross margins, increased net losses and loss of market share.
These competitive pressures in our market or our failure to compete effectively may result in price reductions, fewer buyers and sellers, reduced revenue, gross profit, and gross margins, increased net losses and loss of market share. Any failure to meet and address these factors could harm our business, results of operations and financial condition.
Unfavorable changes or interpretations could decrease demand for our marketplaces, limit marketing methods and capabilities, affect our growth, increase costs or subject us to additional liabilities. In addition, if we were to continue to expand internationally, we would be subject to additional regulation.
Unfavorable changes or interpretations could decrease demand for our marketplaces, limit marketing methods and capabilities, affect our growth, increase costs or subject us to additional liabilities. In addition, we would be subject to additional regulation in connection with any future international expansion.
Our advertising activities may not yield increased revenue and the efficacy of these activities will depend on a number of factors, including our ability to: • determine the effective creative message and media mix for advertising, marketing and promotional expenditures; • select the right markets, media and specific media vehicles in which to advertise; • identify the most effective and efficient level of spending in each market, media and specific media vehicle; and • effectively manage marketing costs, including creative and media expenses, to maintain acceptable buyer and seller acquisition costs. 14 Table of Contents We closely monitor the effectiveness of our advertising campaigns and changes in the advertising market, and adjust or re-allocate our advertising spend across channels, customer segments and geographic markets in real-time to optimize the effectiveness of these activities.
Our advertising activities may not yield increased revenue and the efficacy of these activities will depend on a number of factors, including our ability to: • determine the effective creative message and media mix for advertising, marketing and promotional expenditures; • select the right markets, media and specific media vehicles in which to advertise; • identify the most effective and efficient level of spending in each market, media and specific media vehicle; and • effectively manage marketing costs, including creative and media expenses, to maintain acceptable buyer and seller acquisition costs.
The imposition by state and local taxing authorities of sales tax collection obligations on out-of-state e-commerce businesses could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors and decrease our future sales, which could have an adverse impact on our business and results of operations. 31 Table of Contents Changes in tax laws or regulations in the various tax jurisdictions we are subject to or adverse application of existing tax laws could increase our costs and harm our business.
The imposition by state and local taxing authorities of sales tax collection obligations on out-of-state e-commerce businesses could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors and decrease our future sales, which could have an adverse impact on our business and results of operations.
Our revenue was $322.0 million and $288.4 million for the years ended December 31, 2023 and 2022, respectively, representing annual growth of 12% and 15%, 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 $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.
We have previously identified a material weakness in our internal control over financial reporting in the Annual Report on Form 10-K and if we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate consolidated financial statements or comply with applicable regulations could be impaired.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate consolidated financial statements or comply with applicable regulations could be impaired.
In addition, the incurrence of debt would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations. In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer.
In addition, the incurrence of debt would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.
As of December 31, 2023, we had 16,246,975 options outstanding that, if fully exercised, would result in the issuance of shares of Class B common stock, as well as 8,537,618 shares of Class A common stock subject to Restricted Stock Units (“RSU”) awards.
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.
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. We estimate this reserve based on historical return trends.
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.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. 30 Table of Contents We have previously identified control deficiencies in the design and operation of our internal control over financial reporting that constituted a material weakness, as further described in “Item 9A.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
Future acquisitions, strategic investments, partnerships or alliances could be difficult to identify and integrate, divert the attention of key management personnel, disrupt our business, dilute stockholder value and harm our results of operations and financial condition.
Acquisitions, divestitures, strategic investments, partnerships and alliances involve numerous risks and uncertainties, could divert the attention of key management personnel, disrupt our business, dilute stockholder value and harm our results of operations and financial condition.
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. 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.
If we fail to manage our growth effectively, we may be unable to execute our business plan and our business, results of operations and financial condition could be harmed.
We have experienced growth in many of our recent periods and those growth rates may not be indicative of our future growth. If we fail to manage our growth effectively, we may be unable to execute our business plan and our business, results of operations and financial condition could be harmed.
In May 2022, partly as a result of rising costs, we announced a price increase in standard shipping fees for our customers. 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.
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.
Our principal trademark assets include the registered trademarks “THREDUP” and “Think Secondhand First” and our logos and taglines. We also hold European Union trademarks for our Remix logo. Our trademarks are valuable assets that support our brand and buyers’ perception of our services and merchandise.
Our principal trademark assets include the registered trademarks “THREDUP” and “Think Secondhand First” and our logos and taglines. Our trademarks are valuable assets that support our brand and buyers’ perception of our services and merchandise. We have registered trademarks in Australia, Canada, the European Union, South Korea, Mexico, the United Kingdom and the United States.
Any such action would be expensive to defend, likely would damage our reputation and market position, could result in substantial liability and could adversely affect our business and results of operations. 23 Table of Contents Further, in view of new or modified requirements relating to privacy, data protection or information security, contractual obligations and other legal obligations, or any changes in their interpretation, we may find it necessary or desirable to fundamentally change our business activities and practices, and to expend significant resources to adapt to these changes.
Further, in view of new or modified requirements relating to privacy, data protection or information security, contractual obligations and other legal obligations, or any changes in their interpretation, we may find it necessary or desirable to fundamentally change our business activities and practices, and to expend significant resources to adapt to these changes.
We believe there is a significant market opportunity for our business, and we intend to invest aggressively to capitalize on this opportunity. Because the market for secondhand items is evolving, particularly the online resale of secondhand items, it is difficult for us to predict our future results of operations or the limits of our market opportunity.
Because the market for secondhand items is evolving, particularly the online resale of secondhand items, it is difficult for us to predict our future results of operations or the limits of our market opportunity.
We have reduced our cost structure to better align the operational needs of the business to current economic conditions. We may have additional restructuring initiatives in the future to improve our operations, respond to changes in business conditions and markets and to streamline certain key functions to reduce costs.
We may have additional workforce reorganization initiatives in the future to improve our operations, respond to changes in business conditions and markets and to streamline certain key functions to reduce costs.
We have registered trademarks in Australia, Canada, the European Union, Japan, South Korea, Mexico, the United Kingdom and the United States. We also hold the rights to the “thredup.com” Internet domain name and various related domain names, which are subject to Internet regulatory bodies and trademark and other related laws of each applicable jurisdiction.
We also hold the rights to the “thredup.com” Internet domain name and various related domain names, which are subject to Internet regulatory bodies and trademark and other related laws of each applicable jurisdiction.
We have experienced, and may continue to experience, growth in certain recent periods, which has placed, and may continue to place, significant demands on our management and our operational and financial resources. 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.
We have experienced, and may continue to experience, growth in certain recent periods, which has placed, and may continue to place, significant demands on our management and our operational and financial resources.
Moreover, the anticipated benefits of any acquisition, investment or business relationship may not be realized or we may be exposed to unknown risks or liabilities. 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 and identify desirable acquisition targets or we may not be successful in entering into an agreement with any one target.
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.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Head of Internal Audit and the Chief Operating Officer provide an annual update to the Board of Directors on the Company’s overall risk management strategy, which includes addressing cybersecurity risks.
Biggest changeOur Chief Product and Technology Officer reports quarterly to the Audit Committee of the Board of Directors on the information security program and related cyber risks. The Head of Internal Audit and the Chief Operating Officer provide an annual update to the Board of Directors on the Company’s overall risk management strategy, which includes addressing cybersecurity risks.
Risk Factors the section titled “Risk Factors—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 .” Risk Management Oversight and Governance The Board of Directors has oversight of the Company’s cybersecurity program and has delegated the quarterly assessments and management of cybersecurity risks to the Audit Committee.
For more information, please see the section titled “Risk Factors—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 .” Risk Management Oversight and Governance The Board of Directors has oversight of the Company’s cybersecurity program and has delegated the quarterly assessments and management of cybersecurity risks to the Audit Committee.
Cyber Risk Management and Strategy 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 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.
The Vice President of Engineering, Product and Platform has primary responsibility for assessing and managing our cybersecurity threat management program, informed by over twenty 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 fifteen years of experience leading cross-functional organizations in the development and operation of large-scale systems, primarily focused on e-commerce.
Our Vice President of Engineering, Product and Platform oversees our information security program and leads our information security team. Our Vice President of Engineering, Product and Platform works closely with our Head of Internal Audit, in furtherance of the management of risks to the Company.
Our Chief Product and Technology Officer oversees our information security program and leads our information security team. Our Chief Product and Technology Officer works closely with our Head of Internal Audit, in furtherance of the management of risks to the Company.
Although risks from cybersecurity threats have to date not materially affected us, our business strategy, results of operations or financial condition, we have, from time to time, experienced threats to and breaches of our and our third-party vendors’ data and systems. For more information, please see Item 1A.
Although risks from cybersecurity threats have to date not materially affected us, our business strategy, results of operations or financial condition, we have, from time to time, experienced threats to and exploit attempts of our and our third-party vendors’ data and systems.
The findings of any incidents by the Cyber Incident Disclosure Committee are reported to the Audit Committee by the Vice President of Engineering, Product and Platform.
The findings of any incidents by the Cyber Incident Disclosure Committee are reported to the Audit Committee by the Chief Product and Technology Officer.
The Head of Internal Audit reports to the Chair of the Audit Committee and has twelve years of experience with internal audit oversight and risk management.
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.
Removed
The Head of Internal Audit and the Chief Operating Officer have overall responsibility for the Company-wide risk management program. 42 Table of Contents Our Vice President of Engineering, Product and Platform reports quarterly to the Audit Committee of the Board of Directors on the information security program and related cyber risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease and operate five distribution centers, in Arizona, Georgia, Pennsylvania, Texas, and Sofia, Bulgaria, 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. We believe that our facilities are suitable to meet our current needs.
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.
We intend to expand our facilities or add new facilities as we grow, and we believe that suitable additional or alternative space will be available as needed to accommodate any such growth.
We believe that our facilities are suitable to meet our current needs. We intend to expand our facilities or add new facilities as we grow, and we believe that suitable additional or alternative space will be available as needed to accommodate any such growth.
Item 2. Properties Our corporate headquarters is located in Oakland, California, where we currently lease approximately 24,000 square feet pursuant to a lease agreement that expires in September 2024. We also lease additional corporate facilities in Scottsdale, Arizona and Sofia, Bulgaria.
Item 2. Properties Our corporate headquarters is located in Oakland, California, where we currently lease approximately 25,000 square feet pursuant to a lease agreement that expires in September 2029.

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 ThredUp Inc. $ 100.00 $ 63.80 $ 6.55 $ 11.25 Nasdaq Composite $ 100.00 $ 119.08 $ 79.66 $ 114.25 S&P Retail Select Industry $ 100.00 $ 102.68 $ 69.24 $ 82.80 Recent Sales of Unregistered Securities None.
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.
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. 44 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. 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).
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, 2023 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, 2024 and data for the Nasdaq Composite and S&P Retail Select Industry over the same period assume reinvestment of dividends.
There is no public trading market for our Class B common stock. Holders As of the close of business on February 26, 2024, there were 17 holders of record of our Class A common stock and 69 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 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.
Removed
Use of Proceeds from Registered Securities On March 30, 2021, we closed our IPO, in which we sold 13,800,000 shares of our Class A common stock at an offering price of $14.00 per share, including 1,800,000 shares pursuant to the exercise of the underwriters’ option to purchase additional shares of our Class A common stock, resulting in net proceeds to us of $175.5 million after deducting offering costs, underwriting discounts and commissions of $17.7 million.
Added
Purchases of Equity Securities by the Issuer None. Item 6. [Reserved] 48 Table of Contents
Removed
All of the shares offered, issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-253834), which was declared effective by the SEC on March 25, 2021.
Removed
There has been no material change in the planned use of proceeds from the IPO as disclosed in the final prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on March 26, 2021. 45 Table of Contents On August 2, 2021, the Company issued and sold 2,000,000 shares of Class A common stock at a price of $24.25 per share in a registered public offering.
Removed
The aggregate net proceeds were $45.5 million, after deducting $3.3 million of underwriting discounts and commissions and offering costs. There has been no material change in the planned use of proceeds from the registered public offering completed on August 2, 2021. Purchases of Equity Securities by the Issuer None. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

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

58 edited+18 added−15 removed28 unchanged
Biggest changeWe believe that Non-GAAP Adjusted EBITDA loss and Non-GAAP Adjusted EBITDA loss 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. 47 Table of Contents The following table provides a reconciliation of net loss to non-GAAP Adjusted EBITDA loss: Year Ended December 31, 2023 2022 (in thousands) Net loss $ (71,248) $ (92,284) Stock-based compensation expense 31,682 26,817 Depreciation and amortization 18,732 14,033 Interest expense 2,239 805 Severance and other 1,196 3,182 Provision for income taxes 19 35 Impairment of non-marketable equity investment — 3,750 Acquisition and offering-related expenses — 274 Non-GAAP Adjusted EBITDA loss $ (17,380) $ (43,388) Presentation Revenue Our revenue is comprised of consignment revenue and product revenue.
Biggest changeWe 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.
The risk-free interest rate is based on the yield available on United States Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. Goodwill and Acquired Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination.
The risk-free interest rate is based on the yield available on United States Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination.
Marketing Marketing expense consists primarily of advertising, public relations expenditures 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 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.
Sellers love ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Kit, fill it 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 Kit, fill and return it to us using our prepaid label.
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 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 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.
Additionally, we have a term loan facility (“Term Loan”) under which $22.5 million remained available to be drawn as of December 31, 2023 for the purchase of certain equipment, and we were in full compliance with our debt covenants under the Term Loan as of that date.
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.
Key Financial and Operating Metrics We review a number of operating and financial metrics, including the following key business and non-GAAP metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. These key financial and operating metrics are set forth below for the periods presented.
Key Financial and Operating Metrics from Continuing Operations We review a number of operating and financial metrics, including the following key business and non-GAAP metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. These key financial and operating metrics are set forth below for the periods presented.
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.
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.
Certain interest costs in conjunction with the build-out of our distribution centers in 2022 were reclassified from interest expense and capitalized.
Certain 2023 interest costs in conjunction with the build-out of our distribution centers were reclassified from interest expense and capitalized.
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. 52 Table of Contents We expect operating losses to continue in 2024 as we continue to invest in growing our business and our infrastructure.
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.
The marketplaces we have built enable buyers in the U.S. and in Europe to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price.
The marketplaces we have built enable buyers to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price.
The fair values of RSUs are determined based on our stock price on the date of grant. The fair values of equity awards are recognized as compensation expense over the requisite service period or over the period in which the related services are received (generally the vesting period), using the straight-line method.
The fair values of RSUs are determined based on our stock price on the date of grant. The fair values of equity awards are recognized as compensation expense over the requisite service period or over the period in which the related services are received (generally the vesting period), using the straight-line method. We account for forfeitures as they occur.
Cost of Revenue Cost of consignment revenue Cost of consignment revenue consists of outbound shipping, outbound labor and packaging costs. 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.
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.
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.
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.
The allocated transaction price is based on the estimated fair value per point, net of breakage. Breakage is estimated based on our historical redemption rates. Revenue is recognized when the loyalty rewards are redeemed or expire.
The allocated transaction price is based on the estimated fair value per point, net of breakage. Breakage is estimated based on our historical redemption rates. Revenue is recognized when the loyalty rewards are redeemed or expire. We recognize revenue from gift cards when the gift cards are redeemed by the customer.
For a further discussion on our operating lease commitments and long-term debt as of December 31, 2023, 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.
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.
Non-GAAP Adjusted EBITDA loss margin represents Non-GAAP Adjusted EBITDA loss divided by Total revenue. We use Non-GAAP Adjusted EBITDA loss and Non-GAAP Adjusted EBITDA loss 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.
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.
See below for a reconciliation of Non-GAAP Adjusted EBITDA loss to net loss. 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 (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.
The increase in revenue for the year ended December 31, 2023 as compared to the same period in 2022 was driven by a 22.1% growth in consignment revenue, partially offset by a 4.4% decrease in product revenue.
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.
In addition to our core marketplace, some of the world’s leading brands and retailers are taking advantage of our RaaS offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.
We take it from there and do the work to make those items available for resale. In addition to our core marketplace, some of the world’s leading brands and retailers are taking advantage of our RaaS offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.
These variables include per share fair value of the underlying common stock, expected term, risk-free interest rate, expected annual dividend yield and expected stock price volatility over the expected term.
The Black-Scholes Model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include per share fair value of the underlying common stock, expected term, risk-free interest rate, expected annual dividend yield and expected stock price volatility over the expected term.
The increase was primarily due to a $2.6 million increase in personnel-related costs, of which $2.2 million was related to stock-based compensation expense, and a $1.2 million increase in facilities, technology, and other costs, offset by a $3.0 million decrease in professional services.
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.
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 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.
Consignment revenue We generate consignment revenue 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.
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.
Active Buyers and Orders: Active Buyers totaled 1.8 million and Orders totaled 6.9 million in 2023, representing growth of 8.8% and 6.2%, respectively, compared to the prior year.
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.
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, 2023 2022 (in thousands) Net cash provided by (used in): Operating activities $ (22,591) $ (52,105) Investing activities 43,680 8,924 Financing activities (3,603) (3,936) Effect of exchange rate changes on cash, cash equivalents and restricted cash (68) (672) Net change in cash, cash equivalents and restricted cash $ 17,418 $ (47,789) Changes in Cash Flows from Operating Activities Net cash used in operating activities was $22.6 million for the year ended December 31, 2023 compared to the net cash used of $52.1 million same period in 2022.
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.
Operations, Product and Technology Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Operations, product, and technology $ 156,712 $ 155,642 $ 1,070 0.7 % Operations, product, and technology as a percentage of total revenue 48.7 % 54.0 % Operations, product, and technology expenses increased $1.1 million or 0.7% for the year ended December 31, 2023 as compared to the same period in 2022.
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.
Goodwill is not subject to amortization but will be reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. Acquired intangible assets with determinable lives are generally amortized over their estimated useful lives using the straight-line method.
Goodwill is not subject to amortization but will be reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.
Interest Expense Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Interest expense $ (2,239) $ (805) $ (1,434) 178.1 % Interest expense increased $1.4 million for the year ended December 31, 2023 as compared to the same period in 2022.
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.
Other Income (Expense), Net Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Other income (expense), net $ 2,847 $ (1,957) $ 4,804 (245.5) % Other income (expense), net increased $4.8 million for the year ended December 31, 2023 as compared to the same period in 2022.
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.
Changes in Cash Flows from Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 increased $34.8 million as compared to the same period in 2022.
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.
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. 48 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.
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.
Net Loss: Net loss was $71.2 million, or a negative 22.1% of revenue, for the year ended December 31, 2023 as compared to a net loss of $92.3 million, or a negative 32.0% of revenue, for the same period in 2022. 46 Table of Contents Non-GAAP Adjusted EBITDA (1) : Non-GAAP Adjusted EBITDA loss was $17.4 million, or a negative 5.4% of revenue, for the year ended December 31, 2023 as compared to a non-GAAP Adjusted EBITDA loss of $43.4 million, or a negative 15.0% of revenue, for the same period in 2022.
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.
This change was partially offset by a $9.9 million unfavorable change in accrued and other liabilities due to timing of vendor payments, an $8.0 million increase in operating lease costs and a $2.6 million unfavorable change in accounts receivable due to timing of cash receipts from payment processors.
This 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.
Marketing Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Marketing $ 66,273 $ 64,369 $ 1,904 3.0 % Marketing as a percentage of total revenue 20.6 % 22.3 % Marketing expenses increased $1.9 million or 3.0% for the year ended December 31, 2023 as compared to the same period in 2022.
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.
Non-GAAP Financial Measures Non-GAAP Adjusted EBITDA Loss and Non-GAAP Adjusted EBITDA Loss Margin Non-GAAP Adjusted EBITDA loss means net loss adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, interest expense, severance and other charges, provision for income taxes, impairment of non-marketable equity investment, and acquisition-related expenses.
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.
Other Income (Expense), Net Other income (expense), net consists of non-operating income and expenses such as interest income earned on our investments in marketable securities, impairments of non-marketable equity investments and claim proceeds for lost shipments. 49 Table of Contents Financial Results for the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Revenue Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Consignment revenue $ 213,609 $ 174,994 $ 38,615 22.1 % Product revenue 108,413 113,385 (4,972) (4.4) % Total revenue $ 322,022 $ 288,379 $ 33,643 11.7 % Consignment revenue as a percentage of total revenue 66.3 % 60.7 % Product revenue as a percentage of total revenue 33.7 % 39.3 % Total revenue increased $33.6 million, or 11.7%, for the year ended December 31, 2023 as compared to the same period in 2022.
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.
This increase was primarily due to a $0.6 million increase in interest costs due to higher interest rates and a $1.0 million decrease in capitalized interest expense in conjunction with the build-out of our distribution centers in 2022, partially offset by a $0.1 million decrease in amortization of debt issuance costs.
This increase was primarily due to a $0.6 million capitalization of interest costs in the first quarter of 2023 in conjunction with the build-out of our distribution centers, which did not recur in 2024, partially offset by $0.3 million in lower interest costs in 2024 due to reduced outstanding balances.
Cost of Consignment Revenue Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Cost of consignment revenue $ 39,732 $ 37,015 $ 2,717 7.3 % Consignment gross margin 81.4 % 78.8 % Consignment gross margin was 81.4% and 78.8% for the years ended December 31, 2023 and 2022, respectively, representing an increase of 260 basis points. 50 Table of Contents The increase in consignment gross margin for the year ended December 31, 2023 as compared to the same period in 2022 was primarily due to a 250 basis point decrease in outbound shipping, labor and packaging costs.
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.
Changes in Cash Flows from Financing Activities Net cash used in financing activities for the year ended December 31, 2023 decreased $0.3 million as compared to the same period in 2022, which was primarily due to decreased net debt repayments of $1.9 million, increased proceeds from issuance of stock-based awards of $1.0 million, partially offset by a $2.6 million of increased taxes paid related to stock-based award activity. 53 Table of Contents Contractual Obligations Our purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business.
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 decrease in gross margin for the year ended December 31, 2023 as compared to the same period in 2022 was due to a decrease in product gross margin by 1110 basis points, primarily driven by our European operations, which have a lower gross margin.
The decrease in product gross margin for the year ended December 31, 2024 as compared to the same period in 2023 was primarily due to a 840 basis point increase in product inventory costs. This decrease was partially offset by a 30 basis point decrease in shipping, labor, and packaging costs.
We recognize revenue from gift cards when the gift cards are redeemed by the customer, and we recognize breakage revenue when we determine that the redemption of gift cards is remote, which is two years after issuance. 54 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. 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”).
This increase was partially offset by a $0.8 million decrease in claim proceeds for lost shipments. 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.
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.
Year Ended December 31, 2023 2022 Change (in thousands, except percentages) Active Buyers (as of period end) 1,797 1,651 8.8 % Orders 6,910 6,507 6.2 % Total revenue $ 322,022 $ 288,379 11.7 % Gross profit $ 213,805 $ 192,338 11.2 % Gross margin 66.4 % 66.7 % Net loss $ (71,248) $ (92,284) (22.8) % Net loss margin (22.1) % (32.0) % Non-GAAP Adjusted EBITDA loss (1) $ (17,380) $ (43,388) (59.9) % Non-GAAP Adjusted EBITDA loss margin (5.4) % (15.0) % (1) Non-GAAP Adjusted EBITDA loss and Non-GAAP Adjusted EBITDA loss margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies.
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.
The decrease in product gross margin for the year ended December 31, 2023 as compared to the same period in 2022 was primarily due to our European operations, which have a lower product gross margin.
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.
The favorable change was primarily due to a $21.9 million increase in maturities in marketable securities and a $27.3 million decrease in purchases of property and equipment as we completed the first phase of our Texas distribution center, offset by a $14.4 million increase in purchases of marketable securities.
The $56.8 million increase in continuing investing cash outflows was primarily driven by a $49.5 million decrease in maturities in marketable securities and a $13.9 million increase in purchases of marketable securities, partially offset by a $6.5 million decrease in purchases of property and equipment following the completion of the first phase of our Texas distribution center build-out.
Consignment revenue is recognized net of seller payouts. 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.
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.
This increase was partially offset by a $2.6 million decrease in personnel-related costs and a $1.0 million decrease in professional services.
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.
The net increase was primarily due to a $3.8 million decrease related to an impairment charge related to our non-marketable equity investment in 2022, a $1.7 million increase in interest income on our marketable securities due to a higher interest rate environment, and a $0.1 million foreign currency transaction gain.
The increase was primarily due to a $0.7 million increase in interest income from our marketable securities due to a higher interest rate environment, partially offset by a $0.4 million decrease in claim proceeds for lost shipments.
The increase was primarily due to a $0.8 million increase in advertising costs and a $1.1 million increase in personnel-related costs, of which $0.6 million was related to stock-based compensation expense. 51 Table of Contents Sales, General and Administrative Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Sales, general and administrative $ 62,657 $ 61,814 $ 843 1.4 % Sales, general and administrative as a percentage of total revenue 19.5 % 21.4 % Sales, general, and administrative expenses increased $0.8 million or 1.4% for the year ended December 31, 2023 as compared to the same period in 2022.
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.
As of December 31, 2023, the value of our non-cancellable unconditional purchase obligations was $13.2 million. 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.
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.
The increase was primarily due to a $4.4 million increase in facilities, technology, and other costs, of which $2.9 million relates to recognizing incremental rent and depreciation expense on assets related to our Texas distribution center and a $0.3 million increase in inbound shipping.
The decrease was primarily driven by a $4.6 million decrease in personnel-related costs following our workforce reorganization in March 2024 and a $0.9 million decrease in facilities, technology and other costs, partially offset by a $3.0 million increase in accelerated depreciation of certain warehouse equipment , a $0.8 million increase in inbound shipping related to consignment revenue, and a $0.6 million increase in severance costs as a result of our workforce reorganization.
We expect consignment revenue to continue to increase as we increase our Active Buyers and Orders, and as we recently transitioned our RaaS partners to the consignment model and introduced the consignment model to our European operations. Product revenue We also generate product revenue from the sale of items that we own, which we refer to as our inventory.
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.
The sales from our European operations are primarily from sale of owned items. We recognize product revenue, net of discounts, incentives and returns. We expect the percentage share of product revenue to decrease in the long term as we recently transitioned our RaaS partners to the consignment model and introduced the consignment model to our European operations.
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.
We review intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. JOBS Act Accounting Election We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”).
If the fair value of the single reporting unit is less than its carrying amount, then an impairment charge is recognized for the difference between the fair value and carrying amount of goodwill. JOBS Act Accounting Election We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”).
The increase in total revenue was due primarily to an 8.8% increase in Active Buyers and 6.2% increase in Orders combined with a 5.1% increase in net revenue per Order.
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.
The decrease in cash outflows was primarily due to a $25.7 million decrease in our net loss excluding non-cash expenses. Additionally, changes in operating assets and liabilities were favorable year over year by $3.8 million.
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.
We believe RaaS will accelerate the growth of this emerging category and form the backbone of the modern resale experience domestically and internationally. Overview of 2023 Results Revenue: Total revenue was $322.0 million, an increase of 11.7% year-over-year. Gross Profit and Margin: Gross profit totaled $213.8 million, representing an increase of 11.2% year-over-year.
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.
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We take it from there and do the work to make those items available for resale. Aside from Clean Out Kits, ThredUp also sources inventory from a variety of supply channels, such as wholesale supply in Europe.
Added
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.
Removed
Gross margin decreased by 30 basis points to 66.4% from 66.7% year-over-year.
Added
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.
Removed
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.
Added
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.
Removed
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
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.
Removed
Cost of Revenue Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Cost of consignment revenue $ 39,732 $ 37,015 $ 2,717 7.3 % Cost of product revenue 68,485 59,026 9,459 16.0 % Total cost of revenue $ 108,217 $ 96,041 $ 12,176 12.7 % Gross profit $ 213,805 $ 192,338 $ 21,467 11.2 % Gross margin 66.4 % 66.7 % Gross margin was 66.4% and 66.7% for the years ended December 31, 2023 and 2022, respectively, representing a decrease of 30 basis points.
Added
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.
Removed
This lower product gross margin was offset by a 250 basis point increase in consignment gross margin, primarily driven by lower shipping, labor and packaging costs.
Added
Non-GAAP Adjusted EBITDA (loss) from continuing operations margin represents Non-GAAP Adjusted EBITDA (loss) from continuing operations divided by Total revenue.
Removed
The changes in consignment and product gross margins, coupled with the 22.1% increase in consignment revenue and the 4.4% decrease in product revenue, resulted in overall gross margin declining 30 basis points for the year ended December 31, 2023.
Added
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.
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Cost of Product Revenue Year Ended December 31, Change 2023 2022 Amount % (in thousands, except percentages) Cost of product revenue $ 68,485 $ 59,026 $ 9,459 16.0 % Product gross margin 36.8 % 47.9 % Product gross margin was 36.8% and 47.9% for the years ended December 31, 2023 and 2022, respectively, representing a decrease of 1110 basis points.
Added
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.
Removed
Product gross margin decreased primarily due to higher seller payouts and an impairment of aged inventory in our European operations, which unfavorably impacted product gross margin by 1150 and 280 basis points, respectively.
Added
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.
Removed
This decrease was partially offset by a 170 basis point decrease in inventory costs in the U.S. and a 140 basis point decrease in shipping and labor costs.
Added
The significant decline in cost of product revenue was primarily driven by the transition of our RaaS clients to the consignment model in 2023.
Removed
As of December 31, 2023, we had cash, cash equivalents and short-term marketable securities of $64.2 million.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−5 removed3 unchanged
Biggest changeIf interest rates were to increase or decrease by 1% for the year and our borrowing amounts on the Term Loan remained constant, the increase or decrease to our annual interest expense would not be material . 55 Table of Contents Inflation 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 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.
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. 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. 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.
These risks primarily include: Interest Rate Risk As of December 31, 2023, we had cash and cash equivalents of $56.1 million and marketable securities of $8.1 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, 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.
If we are unable to increase our prices to sufficiently offset the rising costs of doing business, our profitability and financial position could be adversely impacted. Foreign Currency Exchange Rate Risk We transact business in Europe through Remix in multiple currencies.
If we are unable to increase our prices to sufficiently offset the rising costs of doing business, our profitability and financial position could be adversely impacted.
Removed
As a result, our operating results, cash flows and net investment in Remix are subject to fluctuations due to changes in foreign currency exchange rates. As of December 31, 2023, our most significant currency exposure was the Bulgarian lev.
Added
If interest rates were to increase or decrease by 1% for the year and our borrowing amounts on the Term Loan remained constant, the increase or decrease to our annual interest expense would not be material .
Removed
We manage our foreign currency exchange rate risks through natural hedges including foreign currency revenue and costs matching, as well as foreign currency assets offsetting liabilities. We have not entered into any hedging arrangements with respect to foreign currency risk, but we may do so in the future if our exposure to foreign currency becomes more significant.
Removed
Assets and liabilities of our foreign operations are translated into dollars at period-end rates, while income and expenses are translated using the average exchange rate during the period in which the transactions occurred.
Removed
The related translation adjustments were reflected as a favorable foreign currency translation adjustment of $0.8 million during the year ended December 31, 2023, which was recognized in accumulated other comprehensive loss within our consolidated balance sheet.
Removed
A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on our financial condition or results of operations during any of the periods presented.

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