10-Q: ThredUp Soars: Revenue Up 33.6%, Losses Shrink Dramatically

ThredUp Inc. reported strong third-quarter 2025 results, with revenue increasing 33.6% and a significant reduction in operating and net losses, driven by robust growth in active buyers and orders.

Summary

• Revenue for the three months ended September 30, 2025, increased by 33.6% to $82.2 million, up from $61.5 million in the prior year.
• Gross profit rose by 33.8% to $65.2 million for the quarter, with gross margin slightly increasing by 10 basis points to 79.4%.
• Operating loss decreased by 59.0% to $4.4 million for the quarter, compared to $10.5 million in the same period last year.
• Net loss from continuing operations significantly improved by 59.0% to $4.2 million for the quarter, down from $10.4 million.
• Non-GAAP Adjusted EBITDA from continuing operations surged by 1101.3% to $3.8 million for the quarter, achieving a 4.6% margin.
• Active Buyers grew by 25.6% to 1.568 million, and Orders increased by 37.2% to 1.608 million for the quarter.
• For the nine months ended September 30, 2025, revenue increased by 19.9% to $231.1 million, and net loss from continuing operations decreased by 54.2% to $14.6 million.
• Net cash provided by continuing operating activities was $12.1 million for the nine months, a 185.7% increase year-over-year.
• The company divested 91% of its European business, Remix, on November 30, 2024, which is now reported as a discontinued operation.
• As of September 30, 2025, cash, cash equivalents, restricted cash, and short-term marketable securities totaled $56.1 million.

Sentiment

Score: 8

Explanation: The company demonstrated robust growth across key financial and operating metrics, including a 33.6% increase in revenue and a 1101.3% surge in Non-GAAP Adjusted EBITDA for the quarter. The significant reduction in operating and net losses, coupled with positive cash flow from continuing operations, indicates a strong trajectory towards profitability. The substantial growth in Active Buyers and Orders suggests increasing market penetration and platform stickiness in the rapidly expanding resale economy. While operating losses are expected to continue in the short term due to investment, the current liquidity position appears sufficient, and capital expenditures are managed. These results suggest a strong operational turnaround and positive momentum.

Positives

• Revenue increased significantly by 33.6% for the quarter and 19.9% for the nine months, indicating strong market demand.
• Gross profit grew by 33.8% for the quarter, maintaining a high gross margin of 79.4%.
• Operating loss decreased substantially by 59.0% for the quarter and 53.6% for the nine months, showing improved operational efficiency.
• Net loss from continuing operations decreased by 59.0% for the quarter and 54.2% for the nine months, moving closer to profitability.
• Non-GAAP Adjusted EBITDA from continuing operations saw a dramatic increase of 1101.3% for the quarter and 187.2% for the nine months, demonstrating strong underlying business performance.
• Active Buyers increased by 25.6% and Orders by 37.2% for the quarter, reflecting successful customer acquisition and engagement.
• Generated positive cash flow from continuing operating activities of $12.1 million for the nine months, a significant improvement.
• Liquidity position is strong, with $56.1 million in cash, cash equivalents, restricted cash, and marketable securities, and $22.5 million available under the Term Loan.
• Successfully divested the European business (Remix), streamlining operations and focusing on core markets.

Negatives

• Average order value decreased by 4.2% for the quarter and 0.9% for the nine months, primarily due to a higher mix of orders from new buyers who tend to place smaller orders.
• Still reporting a net loss from continuing operations, although significantly reduced.
• Operating losses are expected to continue in 2025 due to ongoing investments in business growth and infrastructure.
• Other income, net, decreased by 21.1% for the quarter and 21.3% for the nine months, primarily due to lower interest income from declining interest rates and reduced average cash balances.

Risks

• Ability to attract new users and convert users into buyers and active buyers.
• Sufficiency of cash, cash equivalents, and capital resources to meet liquidity needs.
• Ability to effectively manage or sustain growth and expand operations.
• Intensely competitive market.
• Ability to effectively deploy new and evolving technologies, such as artificial intelligence and machine learning, in offerings.
• Risks arising from economic and industry trends, including inflationary pressures, increased interest rates, changing consumer habits, climate change, and general global political and economic uncertainty.
• Ability to comply with applicable laws and regulations.
• Ability to recognize expected savings or benefits from reorganization activities.
• Ability to successfully integrate and realize the benefits of past or future strategic acquisitions or investments.
• Inflation risk, leading to higher costs in areas such as fuel, labor, processing, and freight, potentially impacting gross margin and operating expenses.
• Inflation potentially having an adverse effect on customers' ability to purchase, which could slow revenue and order growth.

Future Outlook

The company expects operating losses to continue in 2025 as it invests in growing its business and infrastructure. Existing cash, cash equivalents, and short-term marketable securities are believed to be sufficient for at least the next 12 months and beyond to meet capital requirements. The company does not anticipate expanding its distribution network to include additional locations in the near term, and capital expenditures are expected to remain modest for the remainder of 2025. The company is also evaluating the potential impact of several new accounting pronouncements that will become effective in future periods.

Management Comments

• Our mission is to inspire the world to think secondhand first.
• We believe in a sustainable fashion future and we are proud that our business model creates a positive impact to the benefit of our buyers, sellers, clients, employees, investors and the environment.
• ThredUp's proprietary operating platform is the foundation for our managed marketplace, where we have bridged online and offline technology to make the buying and selling of tens of millions of unique items easy and fun.
• Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price.
• 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.
• We believe that RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy.

Industry Context

ThredUp operates in the rapidly emerging resale economy, which a GlobalData market survey in January 2025 identified as one of the fastest-growing sectors in retail. The company's Resale-as-a-Service (RaaS) offering is positioned to accelerate the growth of this category, aligning with broader trends towards sustainable fashion and circular economy models. The business model is designed to create a positive impact for various stakeholders and the environment.

Comparison to Industry Standards

• NA

Legal Proceedings

• Not a party to any material pending legal proceedings.
• May be subject to legal proceedings and claims arising in the ordinary course of business, but management does not believe these will have a material adverse effect on the business, financial condition, results of operations, or cash flows.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value due to strong financial performance, reduced losses, and positive operational momentum.
• Customers (Buyers): Benefit from a growing platform, increased inventory, and continued access to value, premium, and luxury secondhand items.
• Customers (Sellers): Benefit from an easy and efficient platform to clean out closets and unlock value, with options for cash, site credit, or charity donations.
• Employees: Increased personnel-related costs indicate continued investment in the workforce, particularly in distribution centers to support growth.
• Clients (RaaS): The Resale-as-a-Service offering continues to expand, providing brands and retailers with scalable resale solutions.
• Environment: The business model promotes sustainable fashion, contributing positively to environmental impact by extending the life cycle of apparel.

Next Steps

• Continue investing in growing the business and infrastructure.
• Evaluate the potential impact of new accounting pronouncements (ASU 2025-06, 2025-05, 2024-03, 2023-09, 2023-06).
• Maintain modest capital expenditures for the remainder of 2025.
• Do not anticipate expanding the distribution network to include additional locations in the near term.

Key Dates

Recommendation

The company demonstrated robust growth across key financial and operating metrics, including a 33.6% increase in revenue and a 1101.3% surge in Non-GAAP Adjusted EBITDA for the quarter. The significant reduction in operating and net losses, coupled with positive cash flow from continuing operations, indicates a strong trajectory towards profitability. The substantial growth in Active Buyers and Orders suggests increasing market penetration and platform stickiness in the rapidly expanding resale economy. While operating losses are expected to continue in the short term due to investment, the current liquidity position appears sufficient, and capital expenditures are managed. These results suggest a strong operational turnaround and positive momentum, making it an attractive investment.

Keywords

Resale platform, Apparel, Shoes, Accessories, Secondhand fashion, E-commerce, Sustainable fashion, RaaS, Managed marketplace, Active buyers, Orders, Adjusted EBITDA, SEC filing, 10-Q