DIBS 10-K & 10-Q changes, risk factors and insider trading

We incurred net losses of $18.6$13.7 million, $22.7$18.6 million, and $22.5$22.7 million during the fiscal years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. We had an accumulated deficit of $332.4$346.0 million as of December 31, 2024.2025. We expect to incur significantnet losses in the future. We will need to generate and sustain increased revenue levels or reduce operating costs materially in future periods to achieve profitability, and even if we achieve profitability, we may not be able to maintain or increase our level of profitability. Our operating expenses may increase substantially in the foreseeable future to the extent necessary that we may hire additional employees, invest in expanding our seller and buyer base and deepening our existing seller and buyer relationships, expand across and within product verticals, increase our marketing efforts and brand awareness, and invest in expanding our international operations.awareness. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenue enough to offset our higher operating expenses. If we were to reduce our expenses, it could negatively impact our growth and growth strategy. As a result, we can provide no assurance as to whether or when we will achieve profitability. If we are not able to achieve and maintain profitability, the value of our company and our common stock could decline significantly, and you could lose some or all of your investment.

Our net revenue and results of operations fluctuate within each quarterperiod and from quarterperiod to quarter,period, causing our stock price to fluctuate and making our financial results difficult to predict.

•our success in attracting and retaining sellersbuyers and buyerssellers to and on our online marketplace, and our ability to do so in a cost-efficient manner;

•economic and market conditions, particularly those affecting the luxury design items industry, such as fluctuations in inflationinflation, interest, and interestcurrency exchange rates or supply chain or global shipping disruptions.

Our ability to grow our business and market share depend on our ability to attract and maintain an active community of sellersbuyers and buyerssellers and to ensure a sufficient volume of listings on our online marketplace.

Our business growth and market success depend on our ability to cost-effectively attract, retain, and grow relationships with active sellersbuyers and buyers,sellers, and in turn, the volume of luxury design items listed and sold through our online marketplace. We cannot be certain that our efforts will attract more sellers, induce sellers to list and sell more luxury design items on our online marketplace, or yield a sufficient return on investment. Moreover, sellers may be dissatisfied with their experience and choose not to continue to list with us or list items as frequently, or they may stop referring others to us. Similarly, we cannot be certain that our efforts will attract more buyers, induce more buyers to purchase on our online marketplace, or yield a sufficient return on investment. If existing buyers have a negative experience or if the interest in buying luxury design items declines, they may make fewer purchases or they may stop referring others to us.

Even if we are able to attract new sellersbuyers and buyerssellers to replace any that we lose, they may not maintain the same level of activity and generate the same level of revenue. If we are unable to retain existing, or attract new, sellersbuyers and buyers,sellers, our growth prospects would be harmed, which could substantially harm our business, results of operations, and financial condition.

Further, our historical seller marketplace services revenue may not be indicative of future revenue. We are highly selective in the sellers we allow onto our online marketplace and sellers undergo an evaluation by our in-house experts to vet the integrityquality of their listingsinventory before they are allowed to join our online marketplace. As a result, we may have difficulty identifying sellers who meet our standards for providing luxury design items and our customer service requirements. If we fail to attract new sellers or drive continued or increased listings, our ability to grow our business and our results of operations would suffer. See “Risk Factors—Risks Related to Our Business and Industry—We rely, in part, on sellers to provide a positive experience to buyers.”

We have acquired a number of other businesses in the past, and may acquire additional businesses, products, or technologies in the future. For example, in May 2019, we acquired Design Manager, a project management and accounting software company for interior designers. Also, in June 2022, we sold 100% of our equity interest in Design Manager. Acquisitions may divert management’s time and focus from operating our business. Acquisitions also may require us to spend a substantial portion of our available cash, incur debt or other liabilities, amortize expenses related to intangible assets, or incur write-offs of goodwill or other assets. In connection with these types of transactions, we may be required to issue equity securities, which could cause dilution to our stockholders. In addition, integrating an acquired business or technology is risky. Completed and future acquisitions may result in unforeseen operational difficulties and expenditures associated with:

Moreover, we may not benefit from our acquisitions as we expect, or in the time frame we expect, or we may elect to divest ourselves of prior acquisitions, such as our sale of Design Manager in June 2022.acquisitions. We also may issue additional equity securities in connection with an acquisition, which could cause dilution to our stockholders. Finally, acquisitions could be viewed negatively by analysts and investors or by our sellersbuyers and buyers.sellers. We may not succeed in addressing these or other risks, which could harm our business and results of operations.

We have built a trusted online marketplace with a reputation for authentic luxury design items as a result of our evaluations by in-house experts to vet the integrityquality of sellers’ listings.inventory. Our success depends on our ability to accurately and cost-effectively determine whether an item offered for listing, such as a piece of jewelry or work of art, is an authentic product. We seek to reassure buyers that the items they are purchasing meet our marketplace standards. Our sellers undergo a comprehensive evaluation by our vetting specialists to ensure the quality of their inventory. Our vetting specialists come from many of the leading auction and retail houses, brands, and industry recognized art and design businesses. We also seek to proactively resolve issues through communication and follow-up. Factors that could undermine our ability to maintain trust in our online marketplace include:

From time to time, counterfeit goods have been and may be listed on our online marketplace. While we have invested heavily in our seller vetting processof sellers’ listings as described above, we cannot accurately authenticate every item that is listed with us. As the sophistication of counterfeiters increases, it may be increasingly difficult to identify counterfeit products. In many cases, we refund the cost of a product to a buyer if we determine that the item is not authentic. The sale of any counterfeit goods may damage our reputation as a trusted online marketplace for authenticated, luxury design items, which may impact our ability to attract and maintain repeat sellersbuyers and buyers.sellers. Additionally, we may be subject to allegations that an antique, vintage, or other luxury design item we listed and sold through our online marketplace is not authentic. Such controversy could negatively impact our reputation and brand and harm our business and results of operations. If we are unable to maintain the quality and authenticity of the items listed on our online marketplace, our ability to retain and attract sellersbuyers and buyerssellers could be impaired and our reputation, brand, and business could suffer.

Although we do not create or take possession of the items listed on our online marketplace, we have from time to time received, and may in the future receive, communications alleging that items listed on our online marketplace infringe third-party copyrights, trademarks, patents, or other intellectual property rights, or that items we list from our sellers contain materials such as fur, python, ivory, and other exotic animal product components, that are subject to regulation or cultural patrimony considerations, or that may be deemed hazardous or illegal.illegal, or that items listed on our online marketplace originate from a sanctioned jurisdiction. We have complaint and take-down procedures in place to address these communications and listings, and we believe such procedures are important to promote confidence in our online marketplace. We follow these procedures to review complaints and relevant facts to determine the appropriate action to take, which may include removal of the item from our online marketplace and, in certain cases, removing the sellers who repeatedly violate our policies.

Our procedures may not effectively reduce or eliminate our liability. In particular, we may be subject to civil or criminal liability for activities carried out by sellers on our online marketplace, especially outside the United States where we may be less protected under local laws than we are in the United States. Under current U.S. copyright law and the Communications Decency Act, we may benefit from statutory safe harbor provisions that protect us from liability for content posted by our sellersbuyers and buyers.sellers. However, trademark and patent laws do not include similar statutory provisions and liability for these forms of intellectual property is often determined by court decisions. These safe harbors and court rulings may change unfavorably. In that event, we may be held secondarily liable for the intellectual property infringement of sellers.

Despite our vetting process and contractual requirements prohibiting the listing of stolen or otherwise illegal products, from time to time, the listing of stolen goods on our online marketplace may occur. Government regulators and law enforcement officials may allege that our services violate, or aid and abet violations of certain laws, including laws restricting or prohibiting the transferability and, by extension, the resale, of stolen goods. We may be required to spend substantial resources to take additional protective measures which could negatively impact our operations. Any costs incurred as a result of potential liability relating to the alleged or actual sale of stolen goods could harm our business. In addition, negative publicity relating to the actual or perceived listing or sale of stolen goods using our services could damage our reputation and discourage our sellersbuyers and buyerssellers from using our services. We could face liability for such unlawful activities. Despite measures taken by us to detect stolen goods, to cooperate fully with law enforcement, and to respond to inquiries regarding potentially stolen goods, any resulting claims or liabilities could harm our business.

We and our sellers work with a number of third-party services to deliver their items to buyers, including DHL, FedEx, UPS, and the United States Postal Service. Anything that prevents timely delivery of goods to buyers could harm sellers and could negatively affect our reputation. Delays or interruptions may be caused by events that are beyond the control of the delivery services, such as inclement weather, natural disasters, transportation disruptions, delays in customs inspections, duties, taxes, and tariffs, terrorism, war, geopolitical tension, public health crises, or labor unrest. For example, a third-party strike may result in increased shipping costs and buyer accommodations and may cause orders to be lost or delivered late, which could result in canceled customer orders, reduced GMV and net revenue, and negatively impact net loss. It is possible that a potential third-party strike could also result in increased shipping costs and buyer accommodations. These potential impacts may have a material adverse effect on our business, financial condition, including on our financial statements of operations and cash flow, operating results, and liquidity. The delivery services could also be affected by industry consolidation, insolvency, or government shutdowns. Although we have agreements with certain delivery services that enable us to provide pre-paid shipping labels as a convenience to sellers, our agreements do not require these providers to offer delivery services to sellers. Further, our competitors could obtain preferential rates or shipping services, causing sellers to pay higher shipping costs or find alternative delivery services. If the items sold through our online marketplace are not delivered in proper condition, on a timely basis or at shipping rates that buyers are willing to pay, our reputation and our business could be adversely affected.

•engaging and enhancing our relationships with existing sellersbuyers and buyerssellers and attracting new sellersbuyers and buyerssellers;

•maintaining favorable brand recognition and effectively delivering our online marketplace to sellersbuyers and buyerssellers;

Failure to adequately meet these demands may cause us to lose potential sellersbuyers and buyerssellers which could harm our business.

We maintain an allowance for transaction losses, which consists primarily of losses resulting from our buyerpurchase protection program, including damages to products caused by shipping and transit, items that were not received or not as represented by the seller, and reimbursements to buyers at our discretion if they are dissatisfied with their experience. The provision for transaction losses also includes bad debt expense associated with our accounts receivable balance. Transaction loss expense associated with our buyerpurchase protection program accounted for approximately 72%, 70%, 87%, and 85%,87%, of the provision for transaction losses in the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively, with discretionary buyer reimbursements, which are part of the buyerpurchase protection program, constituting a small portion thereof. However, our historical experience may not be indicative of future trends and transaction loss expense associated with our buyerpurchase protection program, including buyer reimbursements, or bad debt expense may increase or fluctuate from period to period. Further, our provision for transaction losses may fluctuate depending on many factors, including changes to our buyerpurchase protection programs and the impact of regulatory changes, and we may see the provision for transaction losses increase proportionally with our on-platform GMV and net revenue. If our allowance for transaction losses is insufficient, it could adversely affect our results of operations.

Our business and results of operations are sensitive to changes in or uncertainty about industry and global economic conditions and their impact on consumer discretionary spending, particularly in the market for luxury design items. An economic downturn or recession, or slowing or stalled recovery therefrom in the United States or in other markets where we operate, may have a material adverse effect on our business, financial condition, or results of operations. Our buyers may have less money for discretionary spending and may stop or reduce their purchases of our products or switch to our competitors, reducing demand for the luxury design items available on our online marketplace. This would cause sales through our online marketplace to decline and adversely impact our business. Consumer purchases of luxury design items have generally declined during periods of economic uncertainty, when disposable income is reduced, or when there is a reduction in consumer confidence. Other factors that may negatively influence consumer spending on luxury design items include unemployment levels, inflation, volatile exchange rates,rates that could make items of international origin more expensive than items of domestic origin, higher taxes, duties and tariffs, reduced access to credit, higher consumer debt levels, reductions in net worth, declines in asset values, home foreclosures and reductions in home values, fluctuating interest rates, changes to economic policy, fluctuating fuel and other energy costs, fluctuating commodity prices, government shutdowns, financial distress caused by bank failures, concerns about the stability and liquidity of certain financial institutions, volatility or disruption in the capital markets, a global health pandemic, international trade disputes, or geopolitical instability. Economic conditions may also be affected by global health crises, natural disasters, such as earthquakes, hurricanes, floods, severe storms, and wildfires, and wars, social unrest, political tensions, or other unexpected events, which may include further embargoes, regional instability, and geopolitical shifts that may adversely impact our business and operating results to an extent that cannot be predicted. Such economic uncertainty and decrease in the rate of purchases of luxury design items may slow the rate at which sellers choose to list their items with us, which could result in a decrease of items available through our online marketplace.

If we fail to successfully anticipate and respond to changing preferences among our sellersbuyers and buyers,sellers, our ability to grow our business and our results of operations may suffer.

We intend to deepen our penetration in our existing verticals for luxury design items and continue to explore additional verticals to serve existing, and attract new, sellersbuyers and buyers.sellers. If these additional verticals do not attract new sellers or buyers, our revenue may fall short of expectations, our brand and reputation could suffer, and we may incur expenses that are not offset by revenue. In addition, our business may suffer if we are unable to attract new and repeat sellers that supply the necessary high-end, appropriately priced, and in-demand luxury design items in these additional verticals, and these verticals may also have a different range of margin profiles than the pieces currently sold through our online marketplace. Additionally, as we enter new verticals, potential sellers may demand lower commissions than our current verticals, which would adversely affect our take rate and results of operations. Expansion of our offerings may also strain our management and operational resources, specifically the need to hire and manage additional authentication and market experts. We may also face increased competition from companies that are more focused on these verticals. If any of these were to occur, it could damage our reputation, limit our growth, and harm our results of operations.

For buyers, maintaining our brand requires that we foster trust through authentication and responsive and effective customer service, as well as ensuring that we have vetted sellers.the quality of our sellers’ inventory. If we fail to provide sellers or buyers with the service and experience they expect, or if we receive seller or buyer complaints or negative publicity about our online marketplace services, merchandise, delivery times or customer support, whether justified or not, the value of our brand would be harmed and our business may suffer.

Maintaining and promoting awareness of our online marketplace is important to our ability to retain existing, and to attract new, sellersbuyers and buyers.sellers. To help facilitate our future growth and profitability, we are investing in our advertising, promotion, public relations, and marketing programs. These brand promotion activities may not yield increased revenue and the efficacy of these activities will depend on a number of factors, including our ability to do the following:

We rely in part on digital advertising, including search engine marketing, to promote awareness of our online marketplace, grow our business, attract new, and increase engagement with existing, sellersbuyers and buyers.sellers. In particular, we rely on search engines, such as Google, and the major mobile app stores as important marketing channels. Search engine companies change their search algorithms periodically, including with the introduction of generative engine search functionality, and our ranking in searches or discoverability via generative search results may be adversely impacted by those changes. Search engine companies or app stores may also determine that we are not in compliance with their guidelines and penalize us as a result. If search engines change their algorithms, terms of service, display, or the featuring of search results, determine we are out of compliance with their terms of service or if competition increases for advertisements, we may be unable to cost-effectively add sellersbuyers and buyerssellers to our website and apps. Our relationships with our marketing vendors are not long-term in nature and do not require any specific performance commitments. In addition, many of our online advertising vendors provide advertising services to other companies, including companies with whom we may compete. As competition for online advertising has increased, the cost for some of these services has also increased. Our marketing initiatives may become increasingly expensive and generating a return on those initiatives may be difficult. Even if we successfully increase revenue as a result of our paid marketing efforts, such increase may not offset the additional marketing expenses we incur.

If the mobile solutions available to sellersbuyers and buyerssellers are not effective, the use of our platform could decline.

Visits and purchases made on mobile devices by consumers, including buyers, have increased significantly in recent years.years and now comprise a majority of visitors to our online marketplace. The smaller screen size and reduced functionality associated with some mobile devices may make the use of our platform more difficult or less appealing to sellersbuyers and buyers.sellers. Visits to our online marketplace on mobile devices may not convert into purchases as often as visits made through personal computers, which could result in less revenue for us. Sellers are also increasingly using mobile devices to operate their businesses on our platform. If we are not able to deliver a rewarding experience on mobile devices, sellers’ ability to manage and grow their businesses may be harmed and, consequently, our business may suffer. Further, although we strive to provide engaging mobile experiences for sellersbuyers and buyerssellers who visit our mobile website using a browser on their mobile device, we depend on sellersbuyers and buyerssellers downloading our mobile apps to provide them the optimal mobile experience.

We seek to continue to drive efficiencies in our business operations. As we continue to add capacity, capabilities, and automation, our operations will become increasingly complex and challenging. While we expect these technologies to improve productivity in many aspects of our operations, including order processing, pricing, copywriting, authentication, photography and photo retouching, any flaws or failures of such technologies could interrupt and delay our operations, which in turn may harm our business. Our investment in technology to support these efforts may not be effective in driving productivity, maintaining, or improving the experience for sellersbuyers and buyers,sellers, or providing a meaningful return on investment. Our efforts to improve our technology are increasingly reliant on artificial intelligence, machine learning systems, and large language models, which are complex, subject to increasing litigation and regulatory scrutiny, and may have errors or inadequacies that are not easily detectable. In some instances, we may make use of third-party artificial intelligence models, including foundational models, that have been pre-trained on data which may be insufficient, erroneous, stale, contain biased information, or infringe intellectual property or other rights. These models may inadvertently reduce our efficiency, or may cause unintentional or unexpected outputs that are incorrect, do not match our business goals, do not comply with our policies or applicable legal requirements, including the E.U. Artificial Intelligence Act and similar U.S. state and international regulations, or otherwise are inconsistent with our brands, guiding principles, and mission. We also rely on technology from third parties. If these technologies do not perform in accordance with our expectations, third parties change the terms and conditions that govern their relationships with us, or if competition increases for the technology and services provided by third parties, our business may be harmed. In addition, if we are unable to add automation to our operations, we may be unable to reduce the costs of processing listings and orders, which could cause delays in buyers receiving their purchases. Any of these outcomes could harm our reputation and our relationships with our sellersbuyers and buyers.sellers.

We have experienced rapid growth in our business in the past, such as in the number of sellers and the number of countries in which we have sellersbuyers and buyers,sellers, and we intend to continue to focus on growth, both in the United States and abroad. The growth of our business, if any, places significant demands on our management team and pressure to expand our operational and financial infrastructure. As we continue to grow, our operating expenses will increase. If we do not manage our growth effectively, the increases in our operating expenses could outpace any increases in our revenue and our business could be harmed. In addition, we have in the past experienced, and may in the future experience, slower growth rates. Although we continue to focus on growth and are evaluating various approaches and alternatives to execute on our business strategies, the outcome of such evaluation or impact of any subsequent actions, if any, is uncertain. Failure to sustain or increase the growth of our business or to execute our business strategies would likely materially and adversely impact our business, financial condition, and results of operations.

Our cost-reduction initiatives related to achieving cash flow positive operations are subject to many risks and uncertainties and may have an adverse impact on our performance. For example, during the year ended December 31, 2023, we identified that we had excess vacancy in our office spaces and entered into a sublease agreement with a third party for approximately 78% of the rentable office space, which expanded to 100% of the rentable office space in January 2024. The sublease expires on the expiration date of our lease. This cost-reduction initiative could materially and adversely affect our business, cash flows, results of operations, profitability, and financial condition, due to factors beyond our control, including if our subtenant fails to make lease payments or otherwise defaults on their obligation to us as we could incur such payment obligations to our landlord and we may not be successful in realizing our anticipated savings and efficiencies. Additionally, in June 2023 and again in January 2025, we have completed several workforce reductions and reorganizations designed to reduce our operating costs and realign our investment priorities. We may not effectively execute on, or achieve the stated goals of, any future workforce reductions. For example, reductions in workforce and reorganizations may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, and decreased employee morale. In addition, while certain positions may be eliminated, other functions necessary to our operations remain. We may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees and may need to incur additional and unanticipated costs to rehire or hire new personnel to perform such duties or may need to conduct additional reductions in workforce as we further redistribute such duties. If we are unable to realize the anticipated benefits, or experience significant adverse consequences, from any of our cost-reduction initiatives, our business, financial condition, and results of operations may be materially adversely affected.

Expanding our community into markets outside of the United States is an important part of our strategy. Although we have a significant number of sellersbuyers and buyerssellers outside of the United States, we have limited experience in developing local markets outside the United States. Also, visits to our online marketplace from buyers outside the United States may not convert into sales as often as visits from within the United States, including due to thevolatility impactin ofcurrency theexchange strong U.S. dollar relative to other currencies.rates. Our success in markets outside the United States will be linked to our ability to attract local sellersbuyers and buyerssellers to our online marketplace and to localize our online marketplace in additional languages. If we are not able to do so, our growth prospects could be harmed.

We have made substantial investments to expand to markets outside of the United States and continued expansion in markets outside of the United States may require significant additional financial investment. These investments include marketing to attract and retain new sellersbuyers and buyers,sellers, developing localized services and web platforms, forming relationships with third-party service providers, supporting operations in multiple countries, and potentially acquiring companies based outside the United States and integrating those companies with our operations. These expansion efforts may not be successful and as a result, our business, results of operations, financial condition, and brand could suffer.

To access our online marketplace, our sellersbuyers and buyerssellers rely on access to the Internet or mobile networks. We also depend on widely adopted third-party platforms to reach our customers, such as popular mobile, social, search, and advertising offerings. Internet service providers may choose to disrupt or degrade access to our online marketplace or increase the cost of such access. Similarly, to download our mobile applications, application store providers must allow our applications to be listed. Internet service providers or application store providers could also attempt to charge us for providing access to our online marketplace.

Any significant disruption in service provided by, or termination of our relationship with, third parties that host our website, mobile app, or process payments made by buyers to sellers on our online marketplace could damage our reputation and result in loss of sellersbuyers and buyers,sellers, which in turn would harm our business and results of operations.

Our brand and ability to attract and retain sellersbuyers and buyerssellers depends, in part, on the reliable performance of our cloud-hosted servers, network infrastructure and content delivery process. If the services provided by third parties are disrupted or if we are unable to maintain and scale the technology underlying our platform, our operations and business could suffer. The volume of traffic and activity on our online marketplace spikes on certain days and during certain periods of the year, such as during the fourth quarter due to the seasonality of our business, and any interruption would be particularly problematic if it were to occur at such a high-volume time.

We have experienced, and expect that in the future we will experience, interruptions, delays, and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, capacity constraints, and lack of network connectivity in one or more regions, which affect the availability of services on our platform and prevent or inhibit the ability of sellersbuyers and buyerssellers to access our online marketplace or complete purchases on our online marketplace and app. Third-party providers host much of our technology infrastructure. Any disruption in their services, or any failure of our providers to handle the demands of our online marketplace could significantly harm our business and damage our reputation. Third-party providers also have systems that are constantly evolving, it is difficult to predict the challenges that we may encounter in developing our platform for use in conjunction with such third-party systems, and we may not be able to modify our integrations to assure its compatibility with the systems of other third parties following any of their changes to their systems. Further, if we experience failures in our technology infrastructure or do not expand our technology infrastructure successfully, then our ability to attract and retain sellersbuyers and buyerssellers and our growth prospects and our business would suffer. We do not have control over the operations of the facilities of these third-party providers that we use. These facilities may be vulnerable to damage or interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct.

We have engaged third-party service providers to perform underlying card processing, currency exchange, identity verification, and fraud analysis services. If these service providers do not perform adequately or if they terminate their relationships with us or refuse to renew their agreements with us on commercially reasonable terms, we will need to find an alternate payment processor and may not be able to secure similar terms or replace such payment processors in an acceptable timeframe. Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages. 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 platform less convenient and attractive and harm our ability to attract and retain sellersbuyers and buyers.sellers. In addition, sellers’ ability to accept orders could be negatively impacted and our business would be harmed. In addition, if these providers increase the fees they charge us, our operating expenses could increase. Alternatively, if we respond by increasing the fees we charge to sellers, some sellers may stop listing new items for sale.

The laws and regulations related to payments are complex and vary across different jurisdictions in the United States and globally. In addition, third-party payment processors maintain and enforce their own rules and regulations which we are required to adhere to. As a result, we are required to spend significant time and effort to comply with those lawslaws, rules and regulations. Any failure or claim of our failure to comply, or any failure by our third-party service providers to comply, could cost us substantial resources, could result in liabilities, or could force us to stop offering certain third-party payment services. As we expand the availability of new payment methods to our sellersbuyers and buyerssellers in the future, we may become subject to additional regulations and compliance requirements.

While we seek to minimize our exposure to third-party losses of our cash, cash equivalents and short-term investments, our cash held in non-interest bearing and interest-bearing accounts that may exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including limited liquidity, defaults, non-performance, or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was unable to continue their operations and the FDIC was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations. Although we did not have any material funds in SVB or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues. If further failures in financial institutions occur where we hold deposits, we could experience additional risk. Any such loss or limitation on our cash, cash equivalents and short-term investments would adversely affect our business.

Until new SCCs are adopted and clear guidance is provided, thereThere remains considerable uncertainty surrounding the future trajectory of the perception of such transfers and businesses face heightened risks, including regulatory scrutiny, enforcement actions, and legal disputes stemming from conflicting interpretations of these requirements or from inconsistencies from one jurisdiction to another, subject to differing interpretations and may be interpreted to conflict with our practices. Additionally, we are, and will continue to be, bound by contractual requirements applicable to our collection, use, processing and disclosure of various types of data, such as via Data Processing Addenda, including personal information, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters.

If sensitive information about our sellersbuyers and buyerssellers or other third parties with whom we transact business is disclosed, or if we or our third-party providers are subject to cyber-attacks, use of our online marketplace could be curtailed, we may be exposed to liability, and our reputation would suffer.

Although we do not directly collect, transmit, and store personal financial information such as credit cards and other payment information, we utilize third-party payment processors who provide these services on our behalf. We also collect and store certain personally identifiable information provided by our sellersbuyers and buyerssellers and other third parties with whom we transact business, such as names, email addresses, and the details of transactions. The collection, transmission, and storage of such information is subject to stringent legal and regulatory obligations. Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to seller and buyer data. In an effort to protect sensitive information, we rely on a variety of security measures, including encryption and authentication technology licensed from third parties. However, advances in computer capabilities, increasingly sophisticated tools and methods used by hackers and cyber terrorists, new discoveries in the field of cryptography, or other developments may result in our failure or inability to adequately protect sensitive information. In addition, there may be scamming or phishing attempts, such as impersonating our personnel, in an effort to obtain personal information from our sellersbuyers and buyerssellers or otherwise make inappropriate use of our online marketplace, which could expose us to liability, reduce seller and buyer satisfaction or confidence with our online marketplace, or damage our reputation.

Any failure or perceived failure by us to comply with our privacy policies, our privacy or data protection obligations to sellersbuyers and buyerssellers or other third parties, or our privacy or data protection legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which may include personally identifiable information or other data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause sellersbuyers and buyerssellers to lose trust in us, which could have an adverse effect on our business. In addition to costs associated with investigating and fully disclosing a data breach, we could be subject to substantial costs to remedy the data breach, substantial monetary fines, or private claims by affected parties, and our reputation would likely be harmed.

We have experienced cybersecurity incidents in the past and may experience them in the future. Further, if we or our third-party service providers experience security breaches that result in online marketplace performance or availability problems or the loss or unauthorized disclosure of personal and other sensitive information, people may become unwilling to provide us the information necessary to set up seller and buyer accounts, and we could be subject to third-party lawsuits, regulatory fines, or other action or liability. Existing sellersbuyers and buyerssellers may also stop listing new items for sale or decrease their purchases or close their accounts altogether. Further, any reputational damage resulting from breach of our security measures could create distrust of our company by sellersbuyers and buyers.sellers.

We expect to incur ongoing costs associated with the detection and prevention of security breaches and other security-related incidents. We may incur additional costs in the event of a security breach or other security-related incident. Any actual or perceived compromise of our systems or data security measures or those of third parties with whom we do business, or any failure to prevent or mitigate the loss of personal or other confidential information and delays in detecting or providing notice of any such compromise or loss could disrupt our operations, harm the perception of our security measures, damage our reputation, cause some sellersbuyers and buyerssellers to decrease or stop their use of our online marketplace, and could subject us to litigation, government action, increased transaction fees, regulatory fines or penalties, or other additional costs and liabilities that could harm our business, financial condition, and results of operations.

We use social media, emails, phone calls, text messages, and push notifications as part of our omni-channel approach to marketing and communications with sellersbuyers and buyers.sellers.

In addition, our employees or third parties acting at our direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of intellectual property, as well as the public disclosure of proprietary, confidential, or sensitive personal information of our business, employees, consumers, or others. Information concerning us or our sellersbuyers and buyers,sellers, whether accurate or not, may be posted on social media platforms at any time and may have an adverse impact on our brand, reputation, or business. The harm may be immediate without affording us an opportunity for redress or correction and could have a material adverse effect on our reputation, business, results of operations, financial condition, and prospects.

Risks related to rapid climate change may have an increasingly adverse impact on our business, our sellers’ businesses, and our buyers. Any of our primary locations and the locations of our buyers and sellers may be vulnerable to the adverse effects of climate change. For example, our New York headquarters has experienced, and is projected to continue to experience, climate-related events at an increasing frequency, including floods, severe storms, and heat waves. Furthermore, it is more difficult to mitigate the impact of these events on our employees in light of our flexible work model, which has allowed for a remote and dispersed work environment. Changing market dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere have the potential to disrupt our business and the transactions consummated between our sellersbuyers and buyers,sellers, which could have a material adverse effect on our financial condition and results of operations.

We are subject to a variety of laws and regulations in the United States and around the world, including those relating to traditional businesses, such as employment laws and taxation, and newer laws and regulations focused on the Internet, artificial intelligence, online commerce, and the resale market, such as payment systems, personal privacy, anti-spam, data security, electronic contracts, unfair and deceptive trade practices, and consumer protection. These laws and regulations are continuously evolving, and compliance is costly and can require changes to our business practices and significant management time and effort. Additionally, it is not always clear how existing laws apply to the Internet as many of these laws do not address the unique issues raised by the Internet or online commerce.

For example, laws relating to online privacy are evolving differently in different jurisdictions. Federal, state, and non-U.S. governmental authorities, as well as courts interpreting the laws, continue to evaluate the privacy implications of the use of third-party “cookies,” “web beacons,” and other methods of online tracking.tracking and artificial intelligence. The United States, the European Union, and other governments have enacted or are considering legislation that could significantly restrict the ability of companies and individuals to collect and store user information, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tracking tools. In some cases, non-U.S. privacy, data protection, consumer protection and other laws and regulations are more restrictive than those in the United States. For example, the European Union traditionally has imposed stricter obligations under such laws than the United States. Consequently, the expansion of our operations internationally may require changes to the ways we collect and use consumer information. In addition, our increasing reliance on artificial intelligence, including the ingestion of user data into artificial intelligence systems, is subject to evolving privacy regulations, such as the EU Artificial Intelligence Act or the California Consumer Privacy Act, which grant users rights regarding automated decision-making. As the legal and regulatory landscape for artificial intelligence continues to shift rapidly, we may be required to devote substantial resources to modify our artificial intelligence systems or discontinue certain features, which could negatively impact our operational efficiency and our ability to compete with other marketplaces.

Existing and future laws and regulations enacted by federal, state, or non-U.S. governments could impede the growth or use of the Internet or online commerce. It is also possible that governments of one or more countries may seek to censor content available on our online marketplace or may even attempt to block access to our online marketplace. If we are restricted from operating in one or more countries, our ability to attract or retain sellersbuyers and buyerssellers may be adversely affected and we may not be able to grow our business as we anticipate.

Some providers of consumer devices and web browsers have implemented, or have announced plans to implement, ways to block tracking technologies which, if widely adopted, could also result in online tracking methods becoming significantly less effective. Any reduction in our ability to make effective use of such technologies could harm our ability to personalize the experience of buyers, increase our costs and limit our ability to attract new, and retain existing, sellersbuyers and buyerssellers on cost-effective terms. As a result, our business could be adversely affected.

Our business activities are subject to various restrictions under U.S. export and similar laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations and various economic and trade sanctions administered by the OFAC.U.S. Office of Foreign Assets Control (“OFAC”). The U.S. export control laws and U.S. economic sanctions laws include restrictions or prohibitions on the provision of certain goods and services to U.S. embargoed or sanctioned countries and regions, governments, persons, and entities. We may also be subject to new or changing import and export laws and regulations in connection with the change in administration or otherwise, or actions by foreign governments in response to the same. In addition, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide sellersbuyers and buyerssellers access to our online marketplace or could limit our sellers’ and buyers’ ability to access or use our services in those countries.

Our online marketplace could be utilized in violation of such laws, despite the precautions we take to prevent such violations. In the past, we may have facilitated transactions involving products or sellers that are the subject of U.S. sanctions or located in countries or regions subject to U.S. sanctions in apparent violation of U.S. economic sanction laws.laws, In relation to certain compliance issues,and we have submittedcorresponded towith OFAC an initial notification of voluntary self-disclosure concerningregarding potential violations. If we fail to comply with these laws and regulations or are found to be in violation of U.S. sanctions or export control laws, including by facilitating unlawful transactions, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges and fines. We may also be adversely affected through penalties, reputational harm, loss of access to certain markets, or otherwise. Actions to remediate past potential violations may include internal reviews, voluntary self-disclosures, or other measures.

In addition, various countries regulate the import and export of certain encryption and other technology, including import and export permitting and licensing requirements, and have enacted laws that could limit the sale of items through our online marketplace or could limit our sellers’ and buyers’ ability to access our online marketplace in those countries. Changes in our online marketplace, or future changes in export and import regulations, may prevent our international sellersbuyers and buyerssellers from utilizing our online marketplace or, in some cases, prevent the export or import of our sellers’ items to certain countries, governments, or persons. Any change in export or import regulations, economic sanctions, or related legislation or changes in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our online marketplace by, or in our decreased ability to facilitate transactions through our online marketplace among, existing or potential sellersbuyers and buyerssellers internationally. Any decreased use of our online marketplace or limitation on our sellers’ ability to export or sell items would adversely affect our business, results of operations, and financial results.

GDPR, CPRA, CCPA, and similar laws in other jurisdictions, and future changes to or interpretations of any of these laws, may continue to change the data protection landscape globally, may be potentially inconsistent or incompatible, and could result in potentially significant operational costs for internal compliance and risk to our business. Some of these requirements introduce friction into the buying and selling experience on our platforms and may impact the scope and effectiveness of our marketing efforts, which could negatively impact our business and future outlook. Complying with these laws and contractual or other obligations relating to privacy, data protection, data transfers, data localization, or information security may require us to make changes to our services to enable us or our customers to meet new legal requirements, incur substantial operational costs, modify our data practices and policies, and restrict our business operations. Any actual or perceived failure by us to comply with these laws, regulations, or other obligations may lead to significant fines, penalties, regulatory investigations, lawsuits, significant costs for remediation, damage to our reputation, or other liabilities. See “Risk Factors—Risks Related to Data Privacy and Cybersecurity, and Infrastructure—Our use and other processing of personal information and other data is subject to laws and obligations relating to privacy and data protection, and our failure to comply with such laws and obligations could harm our business.” We may not be entirely successful in our compliance efforts due to various factors either within our control (such as limited internal resource allocation) or outside our control (such as a lack of seller and vendor cooperation, new regulatory interpretations, or lack of regulatory guidance in respect of certain requirements).

We also publish privacy policies and other documentation regarding our collection, processing, use, and disclosure of personal data. Although we endeavor to comply with our published policies and documentation, we may at times fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance, such as if our employeesemployees, sellers, or vendors fail to comply with our published policies and documentation. We are or may also be subject to the terms of our own and third-party external and internal privacy and security policies, codes, representations, certifications, industry standards, publications and frameworks and contractual obligations to third parties related to privacy, information security, including contractual obligations to indemnify and hold harmless third parties from the costs or consequences of non-compliance with data protection laws, or other obligations.

We are one of the world’s leading online marketplaces for connecting design lovers with many of the best sellers and makers of vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion. We believe we are a leading online marketplace for these luxury design items based on the aggregate number of listings on our online marketplace and our Gross Merchandise Value (“GMV”). Our sellers, who undergo an evaluation by our in-house experts to vet the integrityquality of their listings,inventory, in-depth marketing content, and custom-built technology platform create trust in our brand and facilitate high-consideration purchases of luxury design items online. By disrupting the way these items are bought and sold, we are both expanding access to, and growing the market for, luxury design.

1stDibs began over two decades ago with the vision of bringing the magic of the Paris flea market online by creating a listings site for top vintage and antique furniture sellers. The quality of our initial seller base enabled us to build a reputation in the design industry as a trusted source for unique luxury design. Since then, we have strengthened our brand as well as deepened and broadened our seller relationships. We launched our e-commerce platform in 2013 and transitioned to a full e-commerce marketplace model in 2016. As of December 31, 2024,2025, we operate an e-commerce marketplace with approximately 5,9005,700 unique sellers, compared to approximately 7,8005,900 as of December 31, 2023.2024. In 2024, we shifted our seller acquisition strategy and monetization approach to concentrate on fewer, but more highly engaged sellers. As of December 31, 2024,2025, we had 7.07.8 million users compared to 6.37.0 million as of December 31, 2023,2024, and approximately 1.81.9 million listings, compared to 1.71.8 million as of December 31, 2023.2024. Users represent non-seller visitors who register on our website, including both buyers and prospective buyers, and are identified by a unique email address. Our online marketplace seller stock value, the sum of the listed stock value of all available products listed on our online marketplace, remained consistent year over year and exceeded $10.0 billion as of both December 31, 20242025 and 2023.2024. An individual listing’s stock value is calculated as the item’s current price multiplied by its quantity available for sale.

GMV remainedwas flat$363.9 million for the year overended yearDecember and31, was2025 compared to $362.3 million for each of the yearsyear ended December 31, 2024 and 2023.2024. Our net revenue was $89.6 million for the year ended December 31, 2025, compared to $88.3 million for the year ended December 31, 2024, compared to $84.7 million for the year ended December 31, 2023, an increase of 4%.2%. In the year ended December 31, 2024,2025, we generated a net loss of $13.7 million and Adjusted EBITDA loss of $2.4 million, compared to a net loss of $18.6 million and Adjusted EBITDA of $8.0 million, compared to a net loss of $22.7 million and Adjusted EBITDA of $13.3$8.0 million for the year ended December 31, 2023.2024. See “Non-GAAP Financial Measures” for more information and for a reconciliation of net loss to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP.

During the year ended December 31, 2024,2025, the Companywe incurred $1.4$0.8 million of additional employee severance and benefits costs relating to a furtherreorganization workforceintended reduction.to improve operational and cost efficiency. The majorityremaining of the accrued severance totaling $1.3$0.1 million as of December 31, 20242025 is anticipated to be paid during the year ending December 31, 2025, while approximately $0.1 million is expected to be paid during the first quarter of 2026. See Note 2, “Summary of Significant Accounting Policies” for further discussion on restructuring charges.

Seller marketplace services consist of marketplace transactions, subscriptions, and sponsored listings, and accounted for substantially all of our net revenue in the years ended December 31, 2025, 2024, and 2023, and 2022, respectively.

Our sellers pay us a commission and processing feefees for the successful sale of an item listed on our online marketplace. We have a commission fee structure that is a function of the item’s categoryvertical and price. Our commission fees range from 5% to 50% of GMV and we charge processing fees, which are approximately 3% of the buyer’s total payment, net of expected refunds. Our marketplace transaction fees represent the majority of our net revenue and accounted for 74%, 71%,74%, and 71% of our net revenue in the years ended December 31, 2025, 2024, and 2023, and 2022, respectively.

Subscription & ListingSponsored FeesListings

We offer our sellers various subscription pricing tiers which allows them to choose the plan that best fits their business, with choices of a higher monthly subscription fee and lower commission rates or a lower monthly subscription fee and higher commission rates. Subscription fees accounted for 21%, 22%, 24%, and 24% of our net revenue in the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. Our ability to maintain the level of our annual subscription fee rates depends on our ability to continue to generate sales for our sellers, which in turn depends on our ability to drive GMV growth, as GMV increases the network effect on our online marketplace. We earn sponsored listing feesrevenue fromwhen sellers,a user clicks on a perlisting itemwhich basis, as directed by thea seller requested to promotebe certain items at the seller’s discretion.promoted. Sellers do not pay a listing fee for a basic listing on our online marketplace, but can choose to pay for othersponsored listing fees,listings, which provide promotional advantages over the basic listing. ListingSponsored feeslistings accounted for 4%, 3%, 4%, and 2%4% of our net revenue in the years ended December 31, 2025, 2024, and 2023, and 2022, respectively.

Other services consist of other charges to our sellers including advertising revenues generated from displaying ads on our online marketplace and accounted for 1%, 1% and 3% of our net revenue infor all of the years ended December 31, 2025, 2024, 2023, and 2022, respectively.2023. Advertising revenue is generated when impression-based ads are displayed on our online marketplace on our sellers’ behalf.

•Active Buyers; and

•Adjusted EBITDA (see “Non-GAAP Financial Measures” for a discussion of Adjusted EBITDA and a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP,accounting principles generally accepted in the United States of America (“GAAP”), to Adjusted EBITDA).; and

•Free cash flow (see “Non-GAAP Financial Measures” for a discussion of free cash flow and a reconciliation of cash from operating activities, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow) For GMV, Number of Orders, and Active Buyers, these metrics are based on internal company data, assumptions, and estimates and are used in managing our business. We believe that these figures are reasonable estimates, and we actively take measures to improve their accuracy, such as eliminating known fictitious or duplicate accounts. There are, however, inherent challenges in gathering accurate data across large online and mobile populations. For example, individuals may have multiple email accounts in violation of our terms of service, which would result in an Active Buyer being counted more than once, thus impacting the accuracy of our number of Active Buyers. In addition, certain metrics, such as the number of Active Buyers, Number of Orders, and GMV are measured based on such numbers as reported in a given month, minus cancellations within that month. As we do not retroactively adjust such numbers for cancellations occurring after the month, the metrics presented do not reflect subsequent order cancellations. We regularly review and may adjust our processes for calculating these metrics to improve their accuracy. These key operating and financial metrics may vary from period to period and should not be viewed as indicative of other metrics.

We define GMV as the total dollar value from items sold by our sellers through 1stDibs in a given month, minus cancellations within that month, and excluding shipping and U.S. sales taxes. GMV includes all sales reported to us by our sellers, whether transacted through the 1stDibs online marketplace or reported as an offline sale. We define “on-platform GMV” as GMV based only on sales placed or reported through the 1stDibs online marketplace, thus on-platform GMV is a subset of GMV. Offline sales consist of sales completed by a small number of sellers outside of our online marketplace and reported to us by these sellers in exchange for increased marketing exposure and/or slightly lower commission rates on both their on-platform and offline sales. We do not intend to add new sellers to this program and have not in the current year. On-platform GMV accounted for $346.3$347.1 million,million or 96%,95%, $346.6$346.3 million,million or 96%, and $409.4$346.6 million,million or 96%, of GMV in the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. We view GMV as a measure of the total economic activity generated by our online marketplace and as an indicator of the scale, growth, and health of our online marketplace. Our historical performance for GMV may not be indicative of future performance in GMV.

We define Active Buyers as buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations. A buyer is identified by a unique email address; thus an Active Buyer could have more than one account if they were to use a separate unique email address to set up each account. We believe this metric reflects scale, engagement and brand awareness, and our ability to convert user activity on our online marketplace into transactions. Our historical performance for Active Buyers may not be indicative of future performance in new Active Buyers.

We define Adjusted EBITDA as net loss excluding depreciation and amortization, stock-based compensation expense, other income, net, provision for income taxes, gainrestructuring on sale of business,expenses, and strategic alternative expenses. Adjusted EBITDA is a key performance measure used by our management and board of directors to assess our operating performance and the operating leverage of our business. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the income and expenses that we exclude from Adjusted EBITDA. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhances the overall understanding of our past performance and future prospects, and allows for greater transparency with respect to key financial metrics used by our management in their financial and operational decision-making. See “Non-GAAP Financial Measures” for more information and for a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.

During the year ended December 31, 2025, we retained 22% of the 2024 on-platform GMV from buyers acquired in 2024; consistent with the year ended December 31, 2024, where we also retained 23% of the 2023 on-platform GMV from buyers acquired in 2023; consistent with the year ended December 31, 2023, where we also retained 23% of the 2022 on-platform GMV from buyers acquired in 2022.2023. We define new buyers as those who placed their first order on our online marketplace. We categorize buyers into cohorts based on the date of their first purchase on the 1stDibs platform. GMV attributed to a buyer cohort represents the total dollar value from items purchased by that buyer cohort in a given period, minus cancellations within that period and excluding shipping and U.S. sales taxes. To calculate the percentage of buyers retained, we divide total GMV in a specific period for a given cohort by the GMV of that cohort in the prior period. Similar to GMV and net revenue, we believe these metrics have been negatively impacted, directly and indirectly, by macroeconomic factors.

Our net revenue consists principally of seller marketplace services. Seller marketplace services primarily consist of marketplace transactions, subscriptions, and listingsponsored fees.listings. Marketplace transaction fees are collected when sellers pay us commissions ranging from 5% to 50% of GMV, and processing fees, which are approximately 3% of the buyer’s total payment, net of expected refunds. If a seller accepts a return or refund offor an on-platform purchase, the related commission andand, in some cases, processing fees are refunded. Subscriptions provide access to our online marketplace, allowing sellers, who are our customers, to execute successful purchase transactions with buyers. We offer our sellers various subscription pricing tiers which allows them to choose the plan that best fits their business, with choices of a higher monthly subscription fee and lower commission rates or lower monthly subscription fee and higher commission rates. Listing fee revenue is collected when sellers pay us for promoting certain products on their behalf and at their discretion through our online marketplace. Advertisements consist of impression-based ads displayed on our online marketplace on the seller’s behalf.

Cost of revenue includes payment processor fees and hosting expenses. Cost of revenue also includes expenses associated with payroll, employee benefits, stock-based compensation, other headcount-related expenses associated with personnel supporting revenue-related operations and logistics, consulting costs, and amortization expense related to our capitalized internal-use software.

Sales and marketing expenses include payroll, employee benefits, stock-based compensation, other headcount-related expenses associated with sales and marketing personnel, advertising expense, consulting costs, and promotional discounts offered to new and existing buyers. Advertising expenses consist primarily of costs incurred promoting and marketing our services, such as costs associated with acquiring new users through performance-based marketing, social media programs, email, and events. Promotional discounts and incentives represent incentives solely to end buyers and, therefore, are not considered payments made to our customers. Buyers are not our customers because access to the 1stDibs online marketplace is free for buyers, and we have no performance obligations with respect to buyers.buyers; we consider our sellers to be our customers.

General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related expenses associated with finance, legal, facility and human resources related personnel, lease expense, net of sublease income, business liability insurance, accounting, professional fees, consulting costs, and depreciation of property and equipment. We expense all general and administrative expenses as incurred.

Provision for transaction losses primarily consists of transaction loss expense associated with our buyerpurchase protection program, including damages to products caused byin shipping and transit, reimbursements to dissatisfied buyers at our discretion, and items that were not received or not as representeddescribed by the seller, and reimbursements to buyers at our discretion if they are dissatisfied with their experience.seller. The provision for transaction losses also includes bad debt expense associated with our seller accounts receivable balance.

Net revenue was $89.6 million for the year ended December 31, 2025, as compared to $88.3 million for the year ended December 31, 2024, as compared to $84.7 million for the year ended December 31, 2023.2024. The increase of $3.6$1.4 million, or 4%,2%, was primarily driven by variousan strategicincrease initiativesin wenon-transactional actionedrevenue due to improvetargeted subscription increases in 2025 and higher sales from sponsored listings. Additionally, our take rates,rates includingincreased commissionslightly re-tiering.due to the mix of orders by vertical and price.

Our marketplace transaction fees represent the majority of our net revenue and accounted for 74% of our net revenue for each of the years ended December 31, 2025 and 71%2024. Subscription fees accounted for 21% and 22% of our net revenue for the years ended December 31, 20242025 and 2023,2024, respectively. Subscription fees accounted for 22% and 24% of our net revenue for the years ended December 31, 2024 and 2023, respectively.

Cost of revenue was $24.2 million for the year ended December 31, 2025, as compared to $24.8 million for the year ended December 31, 2024, as compared to $25.1 million for the year ended December 31, 2023.2024. The decrease of $0.3$0.6 million, or 1%,3%, was primarily driven by a $0.5$0.6 million decrease in salariescredit andcard benefitsprocessing resultingfees from decreases in average headcount from the prior period, primarily relateddue to better pricing negotiated with one of our reductionmain inpayment workforce in June 2023, partially offset by annual compensation increases in March.processors.

Gross profit was $65.4 million and gross margin was 73.0% for the year ended December 31, 2025, as compared to gross profit of $63.4 million and gross margin wasof 71.9% for the year ended December 31, 2024, as compared to gross profit of $59.6 million and gross margin of 70.3% for the year ended December 31, 2023.2024. The increase in gross profit and gross margin for the year ended December 31, 20242025 was primarily driven by our initiatives to improve our take rates, contributing to anthe increase in net revenue, asspecifically wellnon-transaction asrevenue, our cost savings initiatives inand the second half of 2023 which contributed to a decrease in ourcredit costcard ofprocessing revenue,fees as outlined above.

Sales and marketing expense was $31.1 million for the year ended December 31, 2025, as compared to $38.1 million for the year ended December 31, 2024, as compared to $36.6 million for the year ended December 31, 2023.2024. The increasedecrease of $1.4$7.0 million, or 4%,18%, was primarilymainly drivendue byto a $2.7$3.6 million increasedecrease in performance-based marketing spendand whichpromotional contributed to an increase in GMVcampaigns, and net revenues during the first half of 2024 and again in the fourth quarter. This increase was partially offset by a $1.0$3.2 million decrease in salariessalaries, benefits, and benefitsstock-based compensation resulting from decreases in headcount,headcount primarily related to our reduction in workforce in JuneJanuary 2023,2025 partiallyand offset by annual compensation increasesreorganization in March.September 2025.

Technology development expense was $23.4 million for the year ended December 31, 2025, as compared to $21.2 million for the year ended December 31, 2024, as compared to $21.6 million for the year ended December 31, 2023.2024. The decreaseincrease of $0.5$2.2 million, or 2%,11%, was primarilymainly drivendue byto a $1.0$2.6 million decreaseincrease in salaries and benefits resulting from decreases in headcount, primarily related to our reduction in workforce in June 2023, which were partially offset by annual compensation increases in March, includingpartially offset by a $0.3$0.4 million increasedecrease in stock-based compensation expense.resulting mainly from equity awards granted at lower stock prices.

General and administrative expense was $26.9 million for the year ended December 31, 2025, as compared to $27.4 million for the year ended December 31, 2024, as compared to $28.6 million for the year ended December 31, 2023.2024. The decrease of $1.2$0.5 million, or 4%,2%, was primarilymainly drivendue byto a $1.7$0.9 million decrease in leasesalaries expense,and net,wages primarilyas duea toresult sublease income related toof our August2024 2023reductions subleasein for our former New York City corporate headquarters,workforce, and a $1.1$0.3 million decrease relatedin tothe lowercost ratesof negotiatedour withbusiness vendors,liability including lower insurance expense.insurance. These decreases were partially offset by a $1.4$0.4 million increase in professional fees and a $0.2 million increase in stock-based compensation expense, primarily due to equity grants which occur annually in March.compensation.

Other income, net was $5.4 million for the year ended December 31, 2025, as compared to $7.6 million for the year ended December 31, 2024,2024. asThe compareddecrease of $2.2 million, or 29%, was mainly due to $8.3lower millioninterest income driven by lower cash, cash equivalents, and short-term investments for the year ended December 31, 2023.2025, Thecoupled decrease of $0.7 million, or 9%, was due primarily to interest income on our cash, cash equivalents, and short-term investments which decreased in the current year due to less cash, cash equivalents, and short-term investments as well aswith lower interest rates.

As of December 31, 2024,2025, we had cash, cash equivalents and short-term investments of $103.9$95.0 million and an accumulated deficit of $332.4$346.0 million. Net cash used in operating activities was $2.9$2.4 million in the year ended December 31, 2024.2025. We expect operating losses and negative cash flows from operations to continue in the foreseeable future as we continue to strategically invest in growth activities. Our cash flows, including net cash from operating activities, may vary from quarter to quarter, due to the timing of payments to sellers, vendor contracts and prepayments, annual bonuses, marketing related expenses, and other factors. Our principal use of cash is to fund our operations including platform development to support our strategic initiatives and anticipated share repurchases under theour 20242025 Stock Repurchase Program. As we continue to enhance our processes and enter into a new agreement with our payment processors, in 2026 we expect to have certain funds classified as payment processor receivables and seller accounts, an other current asset on our consolidated balance sheet. This change is expected to lower our cash and cash equivalents balance by approximately $6 million to $10 million and increase our other current assets by the same approximate amounts. This change will have no impact on total current assets or total assets.

As of December 31, 2024,2025, 6,443,5227,238,060 shares have been purchased for a total cost of $31.6$35.0 million since the commencement of both our 20232023, 2024 and 20242025 stock repurchase programs and approximately $3.8$10.4 million remains available for future purchases under the 20242025 Stock Repurchase Program.

We generate revenue from seller marketplace services and other services. Seller marketplace services primarily consist of marketplace transactions, subscriptions, and listingsponsored fees.listings. Other services consist of other charges to our sellers including advertising revenues generated from displaying ads on our online marketplace. Revenue is recognized as we transfer control of promised goods or services to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Control is transferred when the buyer and seller have agreed to the sale. We do not obtain legal title to or control the goods being purchased. We evaluate whether it is appropriate to recognize revenue on a gross or net basis based upon our evaluation of whether we obtain control of the specified goods or services by considering if we are primarily responsible for fulfillment of the promise, have inventory risk, or have latitude in establishing pricing and selecting suppliers, among other factors. Based on our evaluation we recognize revenue on a net basis.

We define GMV as the total dollar value from items sold by our sellers through 1stDibs in a given month, minus cancellations within that month, and excluding shipping and U.S. salesapplicable taxes. GMV includes all sales reported to us by our sellers, whether transacted through the 1stDibs online marketplace or reported as an offline sale. We view GMV as a measure of the total economic activity generated by our online marketplace and as an indicator of the scale, growth, and health of our online marketplace. Our historical performance for GMV may not be indicative of future performance in GMV.

General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related expenses associated with finance, legal, facility and human resources related personnel, lease expense, net of sublease income, businesscomprehensive liabilityinsurance insurance,costs, accounting, professional fees, consulting costs, and depreciation of property and equipment. We expense all general and administrative expenses as incurred.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Net revenue was $22.4$23.3 million for the three months ended MarchJune 31,30, 2026, as compared to $22.5$22.1 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease of $0.2$1.2 million, or 1%,5%, was due to an increase in GMV, mainly due to aan decreaseincrease in GMVaverage whichorder wasvalue mainlypartially dueoffset toby a decrease in orders for the three months ended MarchJune 31,30, 2026. While the impacts are difficult to isolateGMV and quantify,net revenue increased, we believe our GMV, number of orders, and net revenue have continued to be impacted negatively, both directly and indirectly, by macroeconomic factors, including significant housing market volatility, significant capital market volatility,volatility and global economic and geopolitical developments. While this is our belief, the impacts are difficult to isolate and quantify. We believe we have,have positioned, and continue to work to positionposition, the business to benefit from an improvement in macroeconomic factors.

Our marketplace transaction fees represent the majority of our net revenue and accounted for 74% of our net revenue for both of the three months ended June 30, 2026 and 75%2025. Subscription fees accounted for 20% and 22% of our net revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Subscription fees accounted for 21% of our net revenue for each of the three months ended March 31, 2026 and 2025.

Cost of revenue was $5.7$6.1 million for the three months ended MarchJune 31,30, 2026, as compared to $6.2 million for the three months ended MarchJune 31,30, 2025. The decrease of $0.5$0.2 million, or 8%,2%, was mainly due to a $0.2 million decreasedecreases in paymentprofessional processingfees, fees due to the decrease in GMVdepreciation, and a $0.2 million decrease in net shipping expenses partially due to a decrease in actual expenses during the quarter and a one-time recovery of carrier overcharges.expenses.

Gross profit was $16.7$17.2 million and gross margin was 74.4%73.9% for the three months ended MarchJune 31,30, 2026, as compared to gross profit of $16.3$15.9 million and gross margin of 72.4%71.8% for the three months ended MarchJune 31,30, 2025. The increase in gross profit and gross margin for the three months ended MarchJune 31,30, 2026 was mainly due to the increase in revenue and the decrease in cost of revenue partially offset by the decrease in net revenue as outlined above.

Sales and marketing expense was $6.3$5.4 million for the three months ended MarchJune 31,30, 2026, as compared to $9.1$8.1 million for the three months ended MarchJune 31,30, 2025. The decrease of $2.8 million, or 31%,34%, was mainly due to a $1.8$1.4 million decrease in performance-based marketing and promotional campaigns.marketing. We also had a $0.7$1.2 million net decrease in headcount costs which included a $0.8 million decrease in salaries and benefits and a $0.4 million decrease in stock-based compensation expense mainly due to our 2025recent restructuring, partially offset by severance from the March 2026 reorganization and annual compensation adjustments.reorganizations.

Technology development expense was $6.2$6.3 million for the three months ended MarchJune 31,30, 2026, as compared to $5.6$5.9 million for the three months ended MarchJune 31,30, 2025. The increase of $0.6$0.4 million, or 10%,7%, was mainly due to a $0.5$0.2 million increase in salaries and benefits from our annual March compensation adjustments.adjustments and a $0.2 million increase due to professional fees incurred for non-capitalizable, one-time, application implementation costs.

General and administrative expense was $6.8$6.7 million for the three months ended MarchJune 31,30, 2026, relatively flat compared to $7.0$6.6 million for the three months ended MarchJune 31,30, 2025. The $0.1 million, decrease was mainly due to a $0.6 million reduction in stock-based compensation which was partially offset by a $0.3 million increase in sales and indirect taxes and a $0.2 million increase in headcount-related costs.

Provision for transaction losses was $0.7 million for the three months ended March 31, 2026, as compared to $0.9 million for the three months ended MarchJune 31,30, 2025.2026, Therelatively decreaseflat of $0.2 million, or 25%, was mainly duecompared to a$1.0 decreasemillion infor damagethe andthree chargebackmonths claims.ended June 30, 2025.

Other income, net was $1.1 million for the three months ended MarchJune 31,30, 2026, as compared to $1.5$1.4 million for the three months ended MarchJune 31,30, 2025. The decrease of $0.3 million, or 21%,25%, was mainly due mainly to lower interest income driven by lower cash, cash equivalents, and short-term investments for the three months ended MarchJune 31,30, 2026 coupled with lower interest rates.

•The exclusion of other income, net, which includes interest income related to our cash, cash equivalents and short-term investments, and realized and unrealized gains and losses on foreign currency exchange; and

•The exclusion of discrete restructuring expenses such as severance and benefit costs from reductions in force and reorganizations that are fundamentally different in strategic nature from ongoing initiatives. We believe the exclusion of these items facilitates a more consistent comparison of operating performance over time because they are distinct from ongoing operational costs; andcosts.

We define Adjusted EBITDA as our net loss, excluding: (1) depreciation and amortization; (2) stock-based compensation expense; (3) other income, net; (4) provision for income taxes; and (5) restructuring expenses; and (6) strategic alternative expenses. The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA:

As of MarchJune 31,30, 2026, we had cash, cash equivalents and short-term investments of $85.3$67.7 million and an accumulated deficit of $348.2$349.2 million. Net cash providedused byin operating activities was $1.1$3.7 million in the threesix months ended MarchJune 31,30, 2026. We expect operating losses to continue in the foreseeable future as we continue to strategically invest in growth activities. Our cash flows, including net cash used in or provided by operating activities, may vary from quarter to quarter, due to the timing of payments to sellers, vendor contracts and prepayments, annual bonuses, marketing related expenses, and other factors. Our principal use of cash is to fund our operations including platform development to support our strategic initiatives and anticipated share repurchases under our Stock Repurchase Program.initiatives. As weof continueJune to30, enhance our processes and enter into2026, a newchange agreement withto our payment processors,processor agreement resulted in 2026a wereclassification expectof toapproximately have$5.9 certainmillion funds classified as payment processor receivables and seller accounts, an other current asset on our consolidated balance sheet. This change is expected to lower ourfrom cash and cash equivalents balance by approximately $6 million to $10receivables millionfrom payment processors and increaseseller ouraccounts, which is recorded in other current assetsassets. These amounts represent amounts received or expected to be received from buyers through third-party payment processors which flow through a bank account for payment to sellers in connection with marketplace transactions. Additionally, our free cash for the three and six months ended June 30, 2026, was negatively impacted by the samereclassification approximateof amounts.$5.9 This change will have no impact on total current assets or total assets.million.

In November 2025, our Board of Directors authorized us to repurchase up to an aggregate of $12.0 million of our common stock (“2025 Stock Repurchase Program”). DuringIn May 2026, the threeCompany's months ended March 31, 2026, 1,735,588 sharesBoard of ourDirectors authorized the Company to repurchase up to an aggregate of $10.0 million of its common stock were(“2026 repurchasedStock forRepurchase aProgram”) totaland costas of $9.4June million30, and2026, approximately $1.0 million remains available under ourthe 2025 Stock Repurchase Program.Program Thewas following table summarizes total treasury stock purchased under each of the Company's programs as of the periods presented:completed.

Net cash used in operating activities was $0.1$3.7 million for the threesix months ended MarchJune 31,30, 20252026 and was driven primarily by offsettingthe increases and decreases in operating assets and liabilities, including a $1.2$7.4 million increase in receivables from payment processors and seller accounts mainly due to anthe increase$5.9 inmillion GMVimpact resulting from a change to our payment processor agreement, as further discussed above, and the timing of cashreceivable receiptssettlements. fromThere thewas payment processors,also a $1.0$2.2 million decrease in operating lease liabilities due to our monthly operating lease payments,payments. These changes were partially offset by apositive $1.2operating million increase in payables due to sellers due to an increase in GMV and the timing of the payments we make to our sellers.results.

Net cash provided by investing activities was $6.8$22.5 million for the threesix months ended MarchJune 31,30, 2026, and was mainly due to $22.0$43.9 million in maturities and sales of short-term investments, partially offset by $15.0$20.8 million in purchases of short-term investments.

Net cash usedprovided inby investing activities was $3.3$5.9 million for the threesix months ended MarchJune 31,30, 2025, and was driven primarily by $24.0 million in purchases of short-term investments, partially offset by $21.0$38.8 million in maturities and sales of short-term investments, partially offset by $32.5 million in purchases of short-term investments.

Net cash used in financing activities was $10.3$22.8 million for the threesix months ended MarchJune 31,30, 2026, and was driven primarily by $9.1$20.7 million in repurchases of our common stock as part of our 2025 and 2026 Stock Repurchase ProgramPrograms and $1.2$2.1 million of payments for taxes related to net share settlements of stock-based compensation awards.

Net cash used in financing activities was $2.4$3.1 million for the threesix months ended MarchJune 31,30, 2025, and was driven primarily by $1.8 million in purchases of our common stock as part of our 2024 Stock Repurchase Program and $0.6$1.3 million of payments for taxes related to net share settlements of stock-based compensation awards.

As of MarchJune 31,30, 2026, there were no material changes in commitments under contractual obligations compared to the contractual obligations disclosed in our Form 10-K.

See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” to our condensed consolidated financial statements for a description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations, or cash flows.pronouncements.