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

Our business and results of operations are subject to global economic and political conditions and their impact on consumer discretionary spending, particularly in the retail market. Some of the factors that may negatively influence consumer spending on retail items include economic downturns, high levels of unemployment, high consumer debt levels, reductions in net worth, declines in asset values, home foreclosures and reductions in home values, higher interest rates, limited credit availability, inflation, resumption of federal student loan payments, higher fuel and other energy costs, increased costs of logistics, higher commodity prices and general uncertainty regarding the overall future political and economic environment. Economic conditions in particular regions may also be affected by natural disasters, such as earthquakes, extreme weather events and wildfires; unforeseen public health crises, such as pandemics and epidemics; political crises, such as a government shutdown, terrorist attacks, war and other incidents of political instability, such as Russia’s invasion of Ukraine, the Israel-Hamas warwar, the recent military actions in Iran by the U.S. and Israel and other conflicts in the Middle East, and the risk of increased tensions between China and Taiwan, or other catastrophic events, whether occurring in the United States or internationally. Ongoing geopolitical instability and military conflicts in major oil-producing regions could further disrupt energy supplies and lead to significant increases in oil prices. Such energy price spikes may contribute to broader inflationary pressures and a reduction in consumer purchasing power. If our buyers face significantly higher costs for fuel and other essentials, they may decrease their discretionary spending on our marketplaces, which would harm our business and results of operations.

Our revenue from continuing operations was $260.0$310.8 million and $258.5$260.0 million for the years ended December 31, 20242025 and 2023,2024, respectively, representing an annual growth of 1% and 7%, respectively.19.5%. In future periods, we may not be able to sustain or increase revenue growth rates consistent with recent history, or at all. We believe our success and revenue growth depends on a number of factors, including, but not limited to, our ability to:

•process Clean Out KitsBags from sellers on a timely basis;

•adapt to changing conditions in our industry ; and

•our ability to meet the expectations of sellers that we will process their Clean Out KitsBags in a timely manner;

We have invested and expect to continue to invest significant time and resources into our RaaS offerings and our RaaS clients include national retail stores, premium fashion brands, fashion-focused e-commerce sites and marketplaces for the buying and selling of secondhand items. We maintain a robust and varied set of RaaS offerings including provision of our Clean Out KitsBags at our RaaS clients’ retail stores, our cash out marketplace offering, white-label resale shops, the resale of worn retail items provided to us by our RaaS clients and cross-listing our products on our RaaS clients’ websites. To grow our business and build out our marketplaces, we anticipate that we will continue to depend on relationships with third parties. Identifying RaaS clients, and negotiating, documenting and maintaining relationships with them, requires significant time and resources. Further, our competitors may be effective in providing incentives to third parties to favor their offerings over our marketplaces, mobile application or in-store offerings.

There is significant uncertainty around the future profitability ofwhether our RaaS offerings and whether they will result in an increased number of new and repeat buyers, an increased number of new and repeat sellers selling high-quality secondhand items, and increased awareness of our brand and an additional source of revenue.brand. Further, if the retail industry suffers in general, there may be fewer customers visiting our RaaS clients’ retail stores, our RaaS clients may discontinue their white-label resale shops in an effort to cut back newer partnerships, and therefore our kit distribution offering for gift cards to our clients’ stores could be less desirable. Additionally, our RaaS clients could go out of business or declare bankruptcy. If our RaaS offerings are not profitable and do not result in us acquiring a high-quality supply of secondhand items from our RaaS clients and/or their customers, who become our sellers, and reaching additional buyers, our business, results of operations and financial condition could be harmed.

We lease facilities to store and accommodate the logistics infrastructure required to process, itemize, list, sell, pack and ship the secondhand and resale items we sell through our marketplaces and related channels of distribution, including our RaaS offerings. To grow our business, we must continue to improve our distribution center operations, proprietary software and systems, and personnel in the geographic regions that have the resources necessary to effectively operate our business. The operation of our business is complex and requires the coordination of multiple functions that are highly dependent on numerous employees and personnel. Each item that we offer through our marketplaces is unique and requires multiple touch points, including inspection, evaluation, photography, pricing, application of a unique SKU, and fulfillment. This process is complex and we have in the past, and may continue to have more Clean Out KitsBags from sellers than we can timely process. Further, the market for employees is competitive and is highly dependent on geographic location. We have and could in the future be required to raise wages or introduce other compensation incentives to remain competitive, possibly without increasing productivity or sales, for example due to inflation, any of which could increase our costs and harm our results of operations. If we fail to effectively locate, hire and retain such personnel, our operations could be negatively impacted, which could harm our business, results of operations and financial condition.

Further, the success of our business depends on our ability to maintain our current distribution centers and, in the future, secure additional distribution centers that meet our business needs and are also in geographic locations with access to a large, qualified talent pool. We have processing and distribution centers across four strategic locations in the United States (“U.S. locations”): Arizona, Georgia, Pennsylvania and Texas. Space in well-positioned geographic locations has in the past, and may in the future be scarce, and where it is available, the lease terms offered by landlords are increasingly competitive, particularly in geographic locations with access to the large, qualified talent pools required for us to run our logistics infrastructure. Incentives currently offered by local, state and federal entities to offset operating expenses may be reduced or become unavailable. Companies who have more financial resources and negotiating leverage than us may be more attractive tenants and, as a result, may outbid us for the facilities we seek. Due to the competitive nature of the real estate market in the locations where we currently operate, we may be unable to renew our existing leases or renew them on satisfactory terms. Failure to identify and secure adequate new distribution centers in optimal geographic locations in the future or maintain our current distribution centers could harm our business, results of operations and financial condition.

We currently rely on both national and regional vendors for our shipping of purchases to buyers, the shipping of supplied secondhand items by sellers and the shipping of items between our distribution centers to consolidate orders. If we are not able to negotiate acceptable pricing and other terms with these vendors or they experience performance problems or other difficulties, it could negatively impact our business and results of operations and negatively affect the experiences of our buyers and sellers, which could affect the degree to which they continue to buy and supply secondhand items on our marketplaces. For instance, our shipping arrangements with our vendors typically include volume based pricing incentives and discounts. If we fall below the volume threshold under our arrangements, then our shipping costs will increase. In addition, our ability to receive inbound secondhand items efficiently and ship secondhand items to buyers may be negatively affected by inclement weather, fire, flood, power loss, earthquakes, labor disputes, or acts of war or terrorism. Disruption to delivery services due to inclement weather could result in delays that could adversely affect our reputation, business and results of operations. If our secondhand items are not delivered in a timely fashion or are damaged or lost during the supply or the delivery process, our buyers or sellers could become dissatisfied and cease using our marketplaces, which could adversely affect our business and results of operations. Furthermore, the current volatility in the global oil markets has resulted in higher fuel prices, which many shipping companies have passed on to their customers by way of increased fuel surcharges. Recent military operations by the U.S. and Israel in Iran could lead to even more significant spikes in global energy prices. We have recently experienced increased shipping costs as a result, and these costs may continue to increase in the future. Partly as a result of rising costs, we have in the past, and may in the future announce price increases in standard shipping fees for our customers. In the future, however, we may not be able to pass such increases on to our customers.

For buyers, maintaining our brand and reputation requires that we foster trust through timely and reliable fulfillment of orders, responsive and effective customer service, a broad supply of desirable brands and secondhand items and an exciting and user-friendly interface on our marketplaces and through our RaaS relationships. For sellers, maintaining our brand and reputation requires that we balance desirable supply for our buyers with a convenient seller service that is consistent and timely. It also requires that we foster trust through consistent and transparent acceptance, payout and return processes and policies for secondhand items supplied to us, payouts that our sellers perceive to be adequate compensation for their items and responsive and effective customer service. For example, in 2022, we implemented a fee for sellers to order a Clean Out KitBag and made changes to our return policy, which have led and could potentially in the future lead to an increase in customer service requests from both our buyers and our sellers. If we fail to provide buyers or sellers with the service and experience they expect, or we experience buyer or seller dissatisfaction or negative publicity about our marketplace services, merchandise, delivery times or customer support, whether justified or not, the value of our brand and reputation could be harmed, which could harm our business and future growth. Further, any unanticipated increase in customer service inquiries from our customers has in the past, and may in the future, result in a slower response time from our customer service team and lead to an increase in customer complaints. For example, disruption to processing of Clean Out KitsBags and distribution caused by a backlog of Clean Out KitsBags has led and could potentially lead to additional delays in our ability to process secondhand items sellers send in for resale, resulting in delays in sellers receiving payouts and less refreshing of our supply on our marketplaces, and could harm our brand and reputation. Our reputation or brand image could be adversely impacted by any failure to maintain satisfactory practices for all our operations and activities, including greenwashing concerns regarding our advertising campaigns and marketing programs related to our sustainability initiatives.

We may not be able to find and identify desirable acquisition targets or we may not be successful in entering into an agreement with any one target. Acquisitions could also result in significant payments of cash by us, dilutive issuances of equity or equity-linked securities or the incurrence of debt, each of which could adversely affect our financial condition and the market price of our Class A common stock. In addition, the incurrence of debt would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations. In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer.

Our success may depend on our ability to accurately and cost-effectively determine whether a secondhand item offered for resale is an authentic product. From time to time we receive secondhand items through our sellers which may be counterfeit or which we are otherwise unable to authenticate. While we have invested in our authentication processes and we reject any items we cannot authenticate, we cannot be certain that we will identify every counterfeit item that is supplied to us. As the sophistication of counterfeiters increases, it may be increasingly difficult to authenticate products and/or identify counterfeit products. While we refund the cost of an item to a buyer if the buyer questions its authenticity and returns the item, the resale of any counterfeit items may nonetheless damage our reputation as a trusted marketplace for secondhand items, which may impact our ability to attract and maintain repeat buyers and sellers. We have been in the past and may alsoin the future be subject to allegations that an item we sold is not authentic despite our efforts to inspect such item and/or our general authentication practices. Such controversy could negatively impact our reputation and brand and harm our business and results of operations.

We are subject to and may become a party to various other litigation, claims, investigations, audits, enforcement actions, arbitrations, or other legal proceedings that arise from time to time in the ordinary course of our business. Adverse judgments or settlements in some or all of these legal disputes may result in significant monetary damages, penalties or injunctive relief against us. Any claims or litigation could be costly to defend, and even if we are successful or fully indemnified or insured, they could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future, and responding to any action may result in a significant diversion of management's attention and resources. Litigation and other claims are subject to inherent uncertainties and management’s view of these matters may change in the future. For a description of our current legal proceedings, see "Item 3. Legal Proceedings" along with "Note 11—10, Commitments and Contingencies" of the notes to the consolidated financial statements contained within this Annual Report on Form 10-K.

In addition, our business and financial condition could be adversely affected by unfavorable changes in or interpretations of existing laws, rules and regulations or the promulgation of new laws, rules and regulations applicable to us and our business particularly following the change in Presidential administration, including those relating to the internet and e-commerce, such as geo-blocking and other geographically based restrictions, internet advertising and price display, consumer protection, anti-corruption, antitrust and competition, economic and trade sanctions, tax, banking, data security, network and information systems security, data protection, privacyprivacy, AI and ML, and escheatment and unclaimed property. As a result, regulatory authorities could prevent or temporarily suspend us from conducting some or all of our activities or otherwise penalize us if our practices were found not to comply with applicable regulatory or licensing requirements or any binding interpretation of such requirements. Unfavorable changes or interpretations could decrease demand for our marketplaces, limit marketing methods and capabilities, affect our growth, increase costs or subject us to additional liabilities. In addition, we would be subject to additional regulation in connection with any future international expansion.

We have recorded impairment charges, and may in the future be required to record additional impairment charges, to operations in our financial statements should we determine that our goodwill and other long-lived assets are impaired. Such charges might have a significant impact on our reported financial condition and results of operations. In the thirdfourth quarter of 2024,2025, wethe Company recorded an impairment charge of $9.8$1.1 million related to a warehouse lease asset group, including an ROU asset and related leasehold improvements, due to changes in connectioncircumstances withthat indicated the decisionassets towere exitno thelonger Europeanrecoverable. market,The coupled with the decline in our market capitalization. Thisimpairment charge was recognizedrecorded within Loss from discontinued operations, netproduct ofand taxtechnology in the Company’s consolidated statements of operations for the year ended December 31, 2024.2025.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time. ThoseFor enactmentsexample, on July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. Key tax provisions include the restoration of 100% bonus depreciation for certain qualified property, immediate expensing for domestic research and experimental expenditures and modifications to international tax provisions. Enactments of tax laws could harm our business operations, and our business, results of operations and financial condition. Further, application of income and tax laws is subject to interpretation and existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. Although we believe our tax methodologies are compliant, a taxing authority’s final determination in the event of a tax audit could materially differ from our past or current methods for determining and complying with our tax obligations, including the calculation of our tax provisions and accruals. These events could require us to pay additional tax amounts on a prospective or retroactive basis, as well as require us to pay fines and/or penalties and interest for past amounts deemed to be due. If we raise our prices to offset the costs of these changes, existing and potential buyers and sellers may elect not to use our marketplaces in the future. Additionally, new, changed, modified or newly interpreted or applied tax laws could increase our compliance, operating and other costs. Further, these events could decrease the capital we have available to operate our business. Any or all of these events could harm our business, results of operations and financial condition.

We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our Class A common stock less attractive to investors.

WeThe exact implications of the JOBS Act are subject to interpretation and guidance by the SEC and other regulatory agencies, and we cannot predictassure ifyou that we will be able to take advantage of all of the benefits of the JOBS Act. Additionally, investors willmay find our Class A commonCommon stockStock less attractive ifto the extent we choose to rely on the exemptions afforded emerging growth companies and smallerrelief reportinggranted companies.by the JOBS Act. If some investors find our Class A commonCommon stockStock less attractive becauseas wea rely on any of these exemptions,result, there may be a less active trading market for our Class A commonCommon Stock and our stock and the market price of our Class A common stock may bedecline or become more volatile.

We are party to an amended and restated loan and security agreement with Western Alliance Bank, which was amended on DecemberJanuary 14,30, 2023,2026, which contains a number of covenants that restrict our and our subsidiaries’ ability to, among other things, incur additional indebtedness, materially change our business, convey, sell, lease, transfer or dispose of the business or our property, except under certain circumstances, merge or consolidate with other companies or acquire other companies, create or incur liens, pay any dividends on our Class A common stock, make certain investments and engage in certain other activities. We are also required to maintain financial covenants, including minimum cash and liquidity requirements, a debt service requirement and quarterly and annual minimum net revenue and revenue growth thresholds.requirements. The terms of our loan and security agreement may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs or to execute business strategies in the means or manner desired. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy, invest in our growth strategy and compete against companies who are not subject to such restrictions.

Recent increasesVolatility in interest rates and volatility in the capital markets may increase our borrowing costs and affect our ability to raise additional funds.

We have relied in part on borrowed funds to meet our liquidity needs and fund our operations and may continue to do so in the future. As of December 31, 2024,2025, we havehad the ability to incur up to $48.8 million in indebtedness under our loan and security agreement, as amended, with a maturity date of July 14, 2027 and as of December 31, 20242025 had incurred $22.3$18.3 million of indebtedness pursuant to this agreement. The indebtedness generally bearsbore interest at the prime rate published in the Wall Street Journal plus a margin of 1.25% with a floor of 4.75% per annum; the applicable interest rate as of December 31, 20242025 was 8.75%8.00% per annum. Continued or sustained increases in interest rates will increase the cost of servicing our outstanding indebtedness as well as the cost of any new indebtedness we may incur, including as a result of any future refinancing, and could negatively impact our business, results of operations and financial condition. In addition, uncertainty and volatility in the capital markets and other factors may negatively impact our access to debt and equity financing and such financing may not be available on terms favorable to us or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, we could face significant limitations on our ability to invest in our operations and otherwise suffer harm to our business.

RecentAdverse eventsdevelopments affecting the financial services industry could have an adverse impact on our business, results of operations and financial conditions.

General RisksRisk Factors

We also expect that being a public company and being subject to these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

ThredUp’s proprietary operating platform is the foundation for our managed marketplace, where we have bridged online and offline technology to make the buying and selling of tens of millions of unique items easy and fun. The marketplaces we have built enable buyers to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Kit,Bag, fill and return it to us using our prepaid label. We take it from there and do the work to make those items available for resale. In addition to our core marketplace, some of the world’s leading brands and retailers are taking advantage of our RaaS offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers. We believe RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy and other services.

On November 30, 2024, we divested 91% of our European business and Bulgarian subsidiary, Remix, which qualified for reporting as a discontinued operation. As a result, Remix’s results,results includingfor 2024, reflecting the lossperiod onfrom divestiture,the beginning of the year through the transaction date, are presented as a single line item, loss from discontinued operations, net of taxtax, and excluded from continuing operations in the consolidated statements of income and excluded from continuing operations for allthe periodsyear presented.ended December 31, 2024. Cash flows attributable to Remix are segregated and presented separately as net cash flow used in discontinued operating activities and net cash flow used in discontinued investing activities for the period through the transaction date during the year ended December 31, 2024 in the consolidated statements of cash flows. Accordingly, any discussion of historical information in Management’sthe Discussionfollowing and Analysis belowsections reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.

Active Buyers and OrdersRevenue: Active BuyersRevenue totaled 1.3$310.8 million andfor Ordersthe totaledyear 4.9ended December 31, 2025, compared to $260.0 million infor the year ended December 31, 2024, representing decreasesan increase of 6.1%19.5% andyear 0.6%, respectively, compared to the priorover year.

(1)Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies. See below for a reconciliation of Non-GAAP Adjusted EBITDA (loss) from continuing operations to its most directly comparable GAAP measure, loss from continuing operations.

Non-GAAP Adjusted EBITDA (Loss) from continuing operations and Non-GAAP Adjusted EBITDA (Loss) from continuing operations Margin

Non-GAAP Adjusted EBITDA (loss) from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, interest expense, impairment of long-lived assets, legal settlement and fees, provision for income taxes, severance and other reorganization costs, interest expense, and provisiongains forrelated incometo taxes.non-marketable equity investment. Non-GAAP Adjusted EBITDA (loss) from continuing operations margin represents Non-GAAP Adjusted EBITDA (loss) from continuing operations divided by Total revenue.Revenue. We use Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, which are non-GAAP measures, to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe that Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.

The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA (loss) from continuing operations:

We generate consignment revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers. WeRevenue recognizeis consignment revenue,recognized net of seller payouts, discounts, incentives and returns. Additionally, revenue includes sales of company-owned inventory and bag fees charged to sellers for processing Clean Out Bags. We expect consignment revenue to continue to increase as we grow our Active Buyers and Orders. Additionally, consignment revenue includes bag fees charged to sellers for processing Clean Out Kits.

Cost of consignmentrevenue revenueprimarily consists of outbound shipping, outbound laborlabor, and packaging costs. We expect cost of consignment revenue to decrease and gross profit to increase as a percentage of consignment revenue as we continue to scaleremain ourrelatively business due to our ability to drive leverage in shipping, labor and packaging.stable.

Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses. Distribution center operating costs mainly include personnel costs, inbound shipping costs,costs other(excluding than thoseamounts capitalized into inventory, as well as personnel costs,inventory), distribution center rent, maintenanceequipment, maintenance, and depreciation of equipment and leasehold improvements.depreciation. Product and technology costs include personnel costs for the design and development of product and the related technology that is used to operate our distribution centers, merchandise science, website development and related expenses for these departments. Operations, product and technology expenses also include an allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. We expect operations, product and technology expenses to increase in absolute dollars in future periods to support our growth, especially as costs to increase our supply (inbound costs) are generally incurred prior to the expected revenue growth. Additionally, we expect to continue investing in automation and other technology improvements to support and drive efficiency in our operations. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, including business acquisitions. We expect these expenses to increase in absolute dollars and decrease as a percentage of revenue over the longer term due to better leverage in our operations.

Interest expense consists of interest and debt issuance costs relating to our term loan facility. Certain 2023 interest costs in conjunction with the build-out of our distribution centers were reclassified from interest expense and capitalized.

Other Income (Expense),Income, Net

Other income (expense),income, net primarily consists of non-operating income and expensesexpenses, such asincluding interest income earned on our investments in marketable securities.securities and gains related to our non-marketable equity investments.

Consignment grossGross margin was 81.5%79.4% and 81.4%79.7% for the years ended December 31, 20242025 and 2023,2024, respectively, remainingrepresenting a decrease of 30 basis points. Overall, gross margin remained relatively flatstable year over year, with athe modest increase of 10 basis points,decrease primarily driven by slightly lowerhigher outbound shipping and laborpackaging costs.

Operations, product, and technology expenses decreasedincreased $1.1$10.6 million or 0.8%7.5% for the year ended December 31, 20242025 as compared to the same period in 2023.2024, while decreasing as a percentage of revenue. The decreaseincrease in absolute dollars was primarily due to a $9.0 million increase in personnel-related costs, primarily driven by higher distribution center headcount, a $4.6$1.8 million decreaseincrease in personnel-relatedinbound shipping costs followingdriven ourby workforcehigher reorganizationsupply in March 2024volume, and a $0.9$1.1 million impairment charge related to a warehouse lease incurred in 2025. The increase was partially offset by a $1.2 million decrease in facilities, technology and other costs,distribution partiallycenter-related offsetcosts. byOverall, a $3.0 million increase in accelerated depreciation of certain warehouse equipment , a $0.8 million increase in inbound shipping related to consignment revenue, and a $0.6 million increase in severance costs as a result of our workforce reorganization. Thethe decrease in operations, product, and technology expenses as a percentage of total revenue wasreflects primarilyimproved dueoperating toefficiency, acost decreaseoptimization in operations, product,efforts, and technologybenefits spend offset by an increase in total revenue, reflecting our ongoing efforts to optimize costs, improve operational efficiency, and leveragefrom economies of scale.

Interest expense increaseddecreased $0.3$0.6 million or 24.0% for the year ended December 31, 20242025 as compared to the same period in 2023. This increase was2024, primarily due to a $0.6 million capitalization of interest costs in the first quarter of 2023 in conjunction with the build-out of our distribution centers, which did not recur in 2024, partially offset by $0.3 million in lower interest costsrate inenvironment 2024 due toand reduced outstanding debt balances.

Other income, net increased $0.3 million or 10.6% for the year ended December 31, 20242025 as compared to the same period in 2023. The increase was2024, primarily due to a $0.7$1.5 million increaseof ingains interest income from our marketable securities duerelated to anon-marketable higherequity interest rate environment,investments, partially offset by a $0.4$0.9 million decrease in claiminterest proceedsincome forresulting lostfrom shipments.lower interest rates and $0.3 million in legal settlement and related fees.

We have historically generated negativepositive cash flows from continuing operations andof $10.7 million for the year ended December 31, 2025. We have primarily financed our operations through private and public sales of equity securities and debt. As of December 31, 2024, we had cash, cash equivalents and short-term marketable securities of $44.2 million. Additionally, we have a term loan facility (“Term Loan”). As of December 31, 2025, we had cash, cash equivalents, restricted cash and short-term marketable securities of $53.1 million. Additionally, we have a Term Loan under which $22.5 million remained available to be drawn as of December 31, 20242025 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date. See Note 8,7, Long-Term Debt, to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a further discussion on our Term Loan.

We expect operating losses to continue in 20252026 as we continue to invest in growing our business and our infrastructure. Our primary sources of liquidity are cash flows generated from operations, cash on hand and borrowings available under the Term Loan. Our primary use of cash includes seller payouts and product inventory costs,payouts, operating costs such as distribution network spend, product and technologytechnology, marketing, personnel-related expenses, marketing expenses, personnel expenses and other expenditures necessary to support our operations and our growth.growth, as well as repayments on our Term Loan. Additionally, our primary capital expenditures are related to the set-up, expansion and/or automation of our distribution network. Based upon our current operating plans, we believe that our existing cash, cash equivalents,equivalents and short-term marketable securities, and remaining availability under the Term Loansecurities will be sufficient for at least the next 12 months to meet our short- and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term. Our cash flow forecast is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Our future capital requirements will depend on many factors, including but not limited to, the timing of our increased distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings and new RaaS clients,offerings, the continuing growth of our marketplaces and overall economic conditions. However, we expect that our capital expenditures will remain modest in 2025.2026. See thePart sectionI, titledItem 1A, Risk Factors, under “Risk Factors—Risks Relating to Our Indebtedness and Liquidity—We may require additional capital to support business growth, and this capital might not be available or may be available only by diluting existing stockholders.stockholders” in this Annual Report on Form 10-K.

Net cash used in continuing investing activities was $10.3$7.2 million for the year ended December 31, 2024,2025, compared to net cash provided of $46.6$10.3 million for the same period in 2023.2024. The $56.8$3.1 million increasedecrease in continuing investing cash outflows was primarily driven by an $11.1 million decrease in purchases of marketable securities, partially offset by a $49.5$4.1 million decrease in maturities in marketable securities and a $13.9$3.9 million increase in purchases of marketable securities, partially offset by a $6.5 million decrease in purchases of property and equipment following the completion of the first phase of our Texas distribution center build-out.equipment.

Net cash used in continuing financing activities was $4.4$0.4 million for the year ended December 31, 2024,2025, compared to net cash used of $3.6$4.4 million for the same period in 2023.2024. The $0.8$4.0 million increasedecrease in continuing financing cash outflows was primarily driven by a $1.5$24.3 million decreaseincrease in proceeds from issuance of stock-based awards, driven by a higher stock price, partially offset by a $0.7$20.3 million increase in payroll taxes paid on stock-based award activity.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with other information, including our condensed consolidated financial statements and related notes included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q; Part I,II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q; and our consolidated financial statements and related notes appearing in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 10-K”). There have been no material changes to the risk factors described in our 2025 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. You should review the section titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and the section titled “Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full calendar year or any other period.

ThredUp operates one of the world’s largest online resale platforms for apparel, shoes and accessories. Our mission is to inspire the world to think secondhand first. We believe in a sustainable fashion future and we are proud that our business model creates a positive impact to the benefit of our buyers, sellers, clients, employees, investors and the environment. Our custom-built operating platform consists of distributed processing infrastructure, proprietary software and systemssystems, and data science and artificial intelligence expertise. This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in April 2026.

ThredUp’s proprietary operating platform is the foundation for our managed marketplace, where we have bridged online and offline technology to make the buying and selling of tens of millions of unique items easy and fun. The marketplaces we have builtbuilt, enhanced by artificial intelligence-powered search and personalization tools, enable buyers to browse and purchase resale items for primarily apparel, shoes and accessories across a wide range of price points. Buyers enjoy shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. ThredUp’s sellers order a Clean Out Bag or a prepaid shipping label, fill a bag or a box and return it to us. We take it from there and do the work to make those items available for resale. In addition to our core marketplace, some of the world’s leading brands and retailers are taking advantage of our Resale-as-a-Service (“RaaS”) offering, which allowsleverages our generative artificial intelligence technology to allow them to conveniently offer a scalable closet clean out service and/or resale shop to their customers. We believe that RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy and other services.

Overview of FirstSecond Quarter Results

Revenue totaled $81.7$90.8 million for the firstsecond quarter of 2026, compared to $71.3$77.7 million for the firstsecond quarter of 2025, representing an increase of 14.6%16.9% year over year.

Gross Profit and Margin: Gross profit totaled $64.7$72.5 million for the firstsecond quarter of 2026, compared to $56.4$61.7 million for the firstsecond quarter of 2025, representing an increase of 14.7%17.5% year over year. Gross margin was 79.2%,79.9%, an increase of 1040 basis points from 79.1%79.5% in the comparable quarter last year.

Net Loss was $6.5$5.9 million, or a negative 7.9%6.5% of revenue, for the firstsecond quarter of 2026, compared to $5.2 million, or a negative 7.3%6.7% of revenue, for the firstsecond quarter of 2025, representing an increase of 24.1%14.7% year over year.

Non-GAAP Adjusted EBITDA(1) was $2.7 million, or 3.4% of revenue, for the first quarter of 2026, compared to $3.8$4.8 million, or 5.3% of revenue, for the firstsecond quarter of 2026, compared to $3.0 million, or 3.9% of revenue, for the second quarter of 2025, representing aan decreaseincrease of 27.9%58.4% year over year.

Active Buyers and Orders: Active Buyers totaled 1.71.8 million and Orders totaled 1.61.9 million,million in the firstsecond quarter of 2026, compared to 1.41.5 million and 1.41.5 million, respectively, in the firstsecond quarter of 2025, representing increases of 25.0%20.9% and 19.3%,21.9%, respectively, year over year.

Comparison of Financial Results for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Revenue increased $10.4$13.1 million, or 14.6%,16.9%, for the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. The growth in revenue was mainly driven by a 19.3%21.9% increase in Orders, supported by higher engagement from both new and returning buyers, partially offset by a 1.6%2.9% decrease in the average order value, primarily driven by a higher mix of orders from newer buyer cohorts who tend to place smaller orders, all largely attributable to a lower free shipping threshold.orders. These trends reflect the continued strength in our core marketplace business and our ongoing focus on driving platform growth.

Gross margin was 79.2%79.9% for the three months ended MarchJune 31,30, 2026, compared to 79.1%79.5% in the same period in 2025, an increase of 1040 basis points. Overall, gross margin remained relatively stable betweenacross the periods.

Operations, product, and technology expenses increased $5.9$7.6 million, or 16.9%,20.2%, for the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. The increase was primarily due to a $3.6$4.2 million increase in personnel-related costs, mainly reflecting distribution center headcount, a $1.7$2.0 million increase in inbound shipping costs driven by higher supply volume, and a $0.7$1.4 million increase in facilities, technology and other distribution center-related costs. We expect shipping rates to increase in the near term driven by fuel surcharges. The increase in operations, product, and technology expenses as a percentage of revenue for the three months ended June 30, 2026 as compared to the same period in 2025 reflects higher labor and inbound shipping costs associated with increased orderprocessing volume.

Marketing expenses increased $1.8$1.6 million, or 13.7%,9.6%, for the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025.2025, The increasewhich was primarily due to a $1.9 millionan increase in advertising costs related to our marketing initiatives aimed at driving customer engagement and platform growth. The decrease in marketing expenses as a percentage of revenue remainedfor relativelythe consistentthree betweenmonths periods.ended June 30, 2026 as compared to the same period in 2025 was primarily due to increased operating leverage resulting from higher revenue.

Sales, general, and administrative expenses increased $1.7$2.5 million, or 12.5%,19.0%, for the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. The increase was primarily due to a $1.0$1.5 million increase in personnel-related costs, of which $1.0 million was attributable to stock-based compensation, a $0.5$0.4 million increase in facilities,professional technology and other costs, andservices, a $0.4$0.3 million increase in payment processing fees driven by higher ordergross sales volume during the period.period, This increase was partially offset byand a $0.3 million decreaseincrease in professionalfacilities, services.technology and other costs. The decrease in sales, general, and administrative expenses as a percentage of revenue wasremained primarilyconsistent dueacross tothe increased operating leverage resulting from higher revenue.periods.

Interest expense decreased $0.1$0.2 million for the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025, primarily due to a lower interest rate resulting from our recent debt amendment and reduced outstanding debt balances.

Other income, net decreasedremained $0.3relatively millionconsistent for the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025, primarily due to a gain recognized on a non-marketable equity investment in the first quarter of 2025.

We generated positive cash flows from operating activities of $4.8$9.2 million for the threesix months ended MarchJune 31,30, 2026. We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”). As of MarchJune 31,30, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $54.4$57.4 million, an increase of $1.3$4.3 million from December 31, 2025. Additionally, we have a Term Loan under which $10.0 million remained available to be drawn as of MarchJune 31,30, 2026 for the purchase of certain equipment, and we were in full compliance with our debt covenants under the Term Loan as of that date. See Note 6, Long-Term Debt, to the condensed consolidated financial statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our Term Loan.

Net cash provided by operating activities was $4.7$9.2 million during the threesix months ended MarchJune 31,30, 2026, compared to $5.7$6.1 million for the same period in 2025. The $1.0$3.1 million decreaseincrease in operating cash inflows was primarily due to a $0.9$0.8 million increaseimprovement in net loss, adjusted for non-cash items, reflecting higher operating losses, as well as a $0.1$2.3 million decreaseincrease in the net cash provided by changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily driven by $1.2 million in higher cash outflows from accounts receivable reflecting the timing of cash receipts and higher sales volume near the end of the quarter and $0.6 million in higher cash outflows from operating liabilities reflecting higher lease payments. These were partially offset by $2.0$3.3 million in higher cash inflows from accounts payable and accrued and other liabilities, primarily reflecting the timing of vendor payments, compensationpayments and taxes.compensation, partially offset by $0.9 million in higher cash outflows from operating liabilities reflecting higher lease payments.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $5.0$7.5 million as compared to net cash provided by investing activities of $5.1$1.0 million for the same period in 2025. The $10.1$8.4 million increase in cash outflows was primarily due to a $6.4$5.6 million decrease in sale and maturities of marketable securities, a $2.3$1.7 million increase in purchases of property and equipment, and a $1.4$1.1 million increase in purchases of marketable securities.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $0.6$1.8 million as compared to net cash used in financing activities of $1.6$2.1 million for the same period in 2025. The $2.2$0.3 million increasedecrease in cash inflows was primarily due to a $3.3$6.5 million increasedecrease in proceeds from issuance of stock-based awardsawards, partially offset by a $4.7 million decrease in withholding taxes paid on stock-based award activity and a $0.6$1.5 million decrease in payments on debt resulting from our recent debt amendment in the first quarter of 2026, partially offset by a $1.6 million increase in payroll taxes paid on stock-based award activity.2026.