GlobeNewswire Inc | Nov 8, 2021 04:06PM EST

November 08, 2021

-- All-time quarterly revenue high of $63.3 million, representing 35% growth year-over-year -- Third quarter gross margin of 73% and gross profit growth of 41% year-over-year -- Record number of Active Buyers and Orders -- Announced the newest distribution center in Texas, expected to more than double our current capacity when fully operational -- Established new Resale-as-a-Service (RaaS) programs with adidas, Crocs, and Michael Stars

OAKLAND, Calif., Nov. 08, 2021 (GLOBE NEWSWIRE) -- ThredUp Inc. (Nasdaq: TDUP), one of the largest online resale platforms for womens and kids apparel, shoes, and accessories, announced today its financial results for the third quarter ended September 30, 2021.

Third-quarter marked another quarter of exceptional financial performance, with our platform demonstrating strong resilience amidst headwinds posed by the pandemic, said James Reinhart, CEO and co-founder at thredUP. Supply continues to appear endless, demand for secondhand is increasing with more first-time buyers trying thredUP, and were doubling down on infrastructure investments so we can continue providing our buyers with a vast and ever-changing selection of great brands at great prices.

Third Quarter 2021 Financial Highlights

-- Revenue: Third quarter total revenue of $63.3 million, an increase of 35% year-over-year. -- Gross Profit and Gross Margin: Gross profit totaled $46.1 million representing growth of 41% year-over-year. Gross margin expanded to 73% from 70% in the comparable quarter last year. -- Net Loss: The GAAP net loss was $14.7 million, or 23% of revenue, for the third quarter 2021, compared to a GAAP net loss of $11.0 million, or 23% of revenue, for the third quarter 2020. -- Adjusted EBITDA and EBITDA Margin: The Adjusted EBITDA loss was $7.8 million, or 12% of revenue, for the third quarter 2021, compared to the Adjusted EBITDA loss of $7.5 million, or 16% of revenue, for the third quarter 2020. -- Active Buyers and Orders: Active Buyers of 1.4 million and Orders of 1.3 million growing 14% and 28%, respectively, over the comparable quarter last year. -- New Distribution Center outside Dallas, Texas: This four-level facility, which will be thredUPs largest and most-automated distribution center to-date, is expected to boost our total distribution network capacity to 16.5 million items when fully operational, more than doubling our current capacity.

Recent Business Highlights

-- Closed the Remix Acquisition: Acquisition closed in October (Q4), kickstarting our international expansion. -- Resale-as-a-Service(RaaS): thredUP announced new RaaS programs with adidas, Crocs, and Michael Stars and expanded its ongoing partnership with Madewell by launching A Circular Store in Brooklyn, NY. -- Strategic Investment in Latin America: thredUP completed a strategic investment in Vopero, a resale marketplace serving Latin America.

Remix Acquisition Closes

thredUP closed the acquisition of Remix in early October. The transaction marks thredUPs official entry into Europe.

CEO and co-founder James Reinhart further commented, thredUP is thrilled to bring our proprietary resale infrastructure and technology to Remix. Were starting to integrate our proprietary software and systems into their existing operating platform and believe this will elevate the resale experience for buyers and sellers in Central and Eastern Europe.

Financial Outlook

Guidance for the fourth quarter 2021 includes estimates for the Remix acquisition, which closed on October 7.

For the fourth quarter 2021, thredUP expects:

-- Revenue in the range of $69 million to $71 million -- Gross margin in the range of 65% to 67% -- Adjusted EBITDA margin loss in the range of 17.0% to 15.0%

For the full fiscal year 2021, thredUP expects:

-- Revenue in the range of $248 million to $250 million -- Gross margin of approximately 71% -- Adjusted EBITDA margin loss of approximately 15%

Conference Call and Webcast Information

-- Conference Call: The live call is accessible in the U.S. and Canada at +1 800-353-6461 (code 3975322) and outside of the U.S. and Canada at +1 334-323-0501 (code 3975322). -- Webcast: The live and archived webcast and related earnings materials will be available at thredUPs investor relations website: ir.thredup.com.

About thredUP

thredUP is transforming resale with technology and a mission to inspire a new generation of consumers to think secondhand first. By making it easy to buy and sell secondhand, thredUP has become one of the world's largest resale platforms for women's and kids' apparel, shoes and accessories. 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. Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. Our proprietary operating platform is the foundation for our managed marketplace and consists of distributed processing infrastructure, proprietary software and systems and data science expertise. In 2018, we expanded our platform with thredUP's Resale-as-a-Service (RaaS), which facilitates modern resale for a number of the world's leading brands and retailers. thredUP has processed over 125 million unique secondhand items from 35,000 brands across 100 categories. By extending the life cycle of clothing, thredUP is changing the way consumers shop and ushering in a more sustainable future for the fashion industry.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as may, will, shall, should, expects, plans, anticipates, could, intends, target, projects, contemplates, believes, estimates, predicts, potential or continue or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this release include, but are not limited to, guidance on financial results for the fourth quarter and full year of 2021; statements about future operating results and our long term growth; the momentum of our business; the growth rates in the markets in which we compete; the impact of the COVID-19 pandemic on consumer behavior and our business; our investments in technology and infrastructure; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments; the success of our RaaSmodel and the timing and plans for future RaaSclients; and our ability to attract new Active Buyers.

The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (SEC), including in the sections entitled Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations'' in the final prospectus for our initial public offering filed on March 26, 2021 and in our Quarterly Report on Form 10-Q that will be filed following this earnings release. The forward-looking statements in this release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing thredUPs views as of any date subsequent to the date of this press release.

Additional information regarding these and other factors that could affect thredUP's results is included in thredUPs SEC filings, which may be obtained by visiting our Investor Relations website at ir.thredup.com or the SEC's website at www.sec.gov.

Operating Metrics

An Active Buyer is a thredUP buyer who has made at least one purchase in the last twelve months. A thredUP buyer is a customer who has created an account in our marketplace. A thredUP buyer is identified by a unique email address and a single person could have multiple thredUP accounts and count as multiple Active Buyers.

Orders are defined as the total number of orders placed by buyers across our marketplace, including through our RaaSpartners, in a given period, net of cancellations.

Non-GAAP Financial Measures

This press release and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe that Adjusted EBITDA and Adjusted EBITDA margin, when taken collectively with our GAAP results, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Adjusted EBITDA and Adjusted EBITDA margin is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP and may be different from a similarly-titled non-GAAP measure used by other companies.

A reconciliation is provided below for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. We calculate Adjusted EBITDA as net loss adjusted to exclude, where applicable in a given period, depreciation and amortization, stock-based compensation expense, acquisition and offering related expenses, interest expense, change in fair value of convertible preferred stock warrant liability and provision for income taxes.

Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA to net loss. thredUP is not providing a quantitative reconciliation of forward-looking guidance of Adjusted EBITDA to net loss because certain items are out of thredUPs control or cannot be reasonably predicted. Historically, these items have included, but are not limited to, depreciation and amortization, stock-based compensation expense, change in fair value of convertible preferred stock warrant liability and provision for income taxes. Accordingly, a reconciliation for Adjusted EBITDA in order to calculate forward-looking Adjusted EBITDA margin is not available without unreasonable effort. However, for the fourth quarter of 2021 and full year 2021, depreciation and amortization is expected to be $2.7 million and $8.9 million, respectively. In addition, for the fourth quarter of 2021 and full year 2021, stock-based compensation expense is expected to be $3.0 million and $12.4 million, respectively. These items are uncertain, depend on various factors, and could result in projected net loss being materially less than is indicated by the currently estimated Adjusted EBITDA margin.

ThredUp Inc.Condensed Consolidated Balance Sheets (in thousands) (unaudited)

September December 30, 31, 2021 2020 Assets Current assets Cash and cash equivalents $ 160,912 $ 64,485 Marketable securities 100,762 ? Accounts receivable, net 1,895 1,823 Inventory, net 4,106 3,519 Other current assets 7,773 5,332 Total current assets 275,448 75,159 Operating lease right-of-use assets 20,455 23,656 Property and equipment, net 49,451 41,131 Other assets 4,864 2,965 Total assets $ 350,218 $ 142,911 Liabilities, Convertible Preferred Stock and Stockholders? EquityCurrent liabilities Accounts payable $ 8,407 $ 9,386 Accrued and other current liabilities 46,427 32,541 Seller payable 18,306 13,724 Operating lease liabilities, current 2,757 3,643 Current portion of long-term debt 7,757 3,270 Total current liabilities 83,654 62,564 Operating lease liabilities, non-current 19,225 21,574 Long-term debt 29,478 31,190 Other non-current liabilities 2,187 2,719 Total liabilities 134,544 118,047 Convertible preferred stock ? 247,041 Stockholders? equity: Common stock 10 1 Additional paid-in capital 513,124 29,989 Accumulated other comprehensive loss (28 ) ? Accumulated deficit (297,432 ) (252,167 )Total stockholders? equity (deficit) 215,674 (222,177 )Total liabilities, convertible preferred stock and $ 350,218 $ 142,911 stockholders? equity

ThredUp Inc.Condensed Consolidated Statements of Operations(in thousands, except share and per share data)(unaudited)

Three months ended Nine months ended September September 30, 30, 2021 2020 2021 2020Revenue: Consignment $ 48,071 $ 33,657 $ 141,356 $ 103,885 Product 15,203 13,275 37,557 38,697 Total revenue 63,274 46,932 178,913 142,582 Cost of revenue: Consignment 10,080 7,984 31,599 25,097 Product 7,100 6,172 17,370 19,072 Total cost of revenue 17,180 14,156 48,969 44,169 Gross profit 46,094 32,776 129,944 98,413 Operating expenses: Operations, product 32,081 25,856 91,455 73,480 and technologyMarketing 16,941 10,614 48,344 34,513 Sales, general and 12,569 6,891 34,206 20,762 administrativeTotal operating 61,591 43,361 174,005 128,755 expensesOperating loss (15,497 ) (10,585 ) (44,061 ) (30,342 )Interest and other 799 (419 ) (1,147 ) (534 )(expense) income, netLoss before provision (14,698 ) (11,004 ) (45,208 ) (30,876 )for income taxesProvision for income 17 ? 57 ? taxesNet loss $ (14,715 ) $ (11,004 ) $ (45,265 ) $ (30,876 )Net loss per shareattributable to $ (0.15 ) $ (0.93 ) $ (0.65 ) $ (2.77 )common stockholders,basic and dilutedWeighted-averageshares used incomputing net lossper share 96,348,658 11,810,075 70,112,601 11,144,362 attributable tocommon stockholders,basic and diluted

ThredUp Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited)

Nine months ended September 30, 2021 2020Cash flows from operating activities Net loss $ (45,265 ) $ (30,876 )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization 6,147 3,868 Stock-based compensation expense 9,389 5,057 Reduction in the carrying amount of right-of-use 3,201 2,882 assetsChanges in fair value of convertible preferred stock 1,768 166 warrants and othersChanges in operating assets and liabilities: Accounts receivable, net (72 ) 1,032 Inventory, net (587 ) 31 Other current and non-current assets (4,720 ) (176 )Accounts payable 574 6,029 Accrued and other current liabilities 14,082 4,252 Seller payable 4,582 4,023 Operating lease liabilities (3,235 ) (2,851 )Other non-current liabilities 4 1,700 Net cash used in operating activities (14,132 ) (4,863 )Cash flows from investing activities Purchases of marketable securities (102,715 ) ? Maturities of marketable securities 1,600 ? Purchase of property and equipment (15,207 ) (14,359 )Net cash used in investing activities (116,322 ) (14,359 )Cash flows from financing activities Proceeds from debt issuance, net of issuance costs 4,625 13,427 Repayment of debt (2,000 ) (1,190 )Proceeds from issuance of Class A common stock uponinitial public offering and the follow-on offering, 226,905 ? net of underwriting discounts and commissionsProceeds from exercise of common stock options andwithholding taxes for the net share settlement of 3,753 1,810 restricted stock unitsPayment of costs for the initial public offering and (4,251 ) (651 )the follow-on offeringNet cash provided by financing activities 229,032 13,396 Net increase (decrease) in cash, cash equivalents and 98,578 (5,826 )restricted cash and cash equivalentsCash, cash equivalents and restricted cash and cash equivalentsBeginning of period 67,539 87,853 End of period $ 166,117 $ 82,027



ThredUp Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except percentages)(unaudited)

Three months ended September Nine months ended September 30, 30, 2021 2020 2021 2020Adjusted EBITDA Reconciliation:Net loss $ (14,715 ) $ (11,004 ) $ (45,265 ) $ (30,876 ) Depreciation and 2,248 1,425 6,147 3,868 amortizationStock-basedcompensation 2,995 1,649 9,389 5,057 expenseAcquisition andoffering related 1,020 ? 1,020 ? expensesInterest expense 619 368 1,751 865 Change in fairvalue ofconvertible ? 89 930 (84 ) preferred stockwarrant liabilityProvision for 17 ? 57 ? income taxesAdjusted EBITDA $ (7,816 ) $ (7,473 ) $ (25,971 ) $ (21,170 ) Adjusted EBITDA (12.4 ) % (15.9 ) % (14.5 ) % (14.8 ) %margin %

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