ThredUp (TDUP) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $79.8 million, down 3.5–4% year-over-year, with U.S. revenue flat and Europe down 18%.

• Gross margin improved to 70.4%, with net loss narrowing to $14.0 million (17.5% of revenue) from $18.8 million (22.7%) in Q2 2023.

• The company is exiting the European market and seeking strategic alternatives for the Remix business.

• Major AI-driven product launches, including visual search and Style Chat, are expected to enhance customer experience and drive growth.

• Published its third annual ESG Impact Report, highlighting sustainability and board-level oversight.

Financial highlights

• U.S. revenue was $66.7 million (flat YoY), EU revenue $13 million (down 18% YoY); U.S. gross margin was 78.8%, EU gross margin 27.3%.

• Q2 2024 gross margin rose to 70.4% (up 300 bps YoY); adjusted EBITDA loss was $1.5 million (-1.9% margin), improved from $5.0 million (-6.1%) last year.

• Cash and marketable securities totaled $55.3 million at June 30, 2024; cash used in Q2 was $7.2 million, including $2.3 million for EU needs.

• Consignment revenue accounted for 80.1% of Q2 2024 total revenue, up from 68.7% in Q4 2023.

• Operating expenses decreased 5.4% YoY, with marketing down 13.9% and SG&A down 3.7%.

Outlook and guidance

• U.S. Q3 revenue expected at $59–$61 million, Q4 at $57–$59 million; full-year 2024 U.S. revenue $247–$251 million.

• U.S. gross margin expected at 78.5–79.5% for FY 2024; adjusted EBITDA margin 1–2%.

• Exiting Europe is expected to immediately improve gross margins, adjusted EBITDA, and accelerate free cash flow.

• Long-term target model aims for gross margin of 75–78% and adjusted EBITDA margin of 20–25%.

• Existing liquidity is expected to be sufficient for at least the next 12 months and beyond.