ThredUp (TDUP) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $73.0 million, down 11% year-over-year, driven by a shift to consignment and reduced focus on European operations.

• Net loss for Q3 2024 was $24.8 million (33.9% of revenue), including a $9.8 million impairment charge related to the European exit.

• U.S. marketplace performance improved, with raised guidance for Q4 and FY 2024 and a focus on operational efficiency and AI-driven features.

• Active buyers and orders declined 7% and 14% year-over-year, partially offset by a 14% increase in average order value.

• Management buyout of the European business is expected to close by year-end, with ThredUp retaining a minority interest.

Financial highlights

• Q3 2024 consolidated revenue was $73 million, down 11% year-over-year; U.S. revenue was $61.5 million, down 10%.

• Gross margin improved to 71.2% (consolidated) and 79.3% (U.S.), both up year-over-year.

• Adjusted EBITDA loss improved to $2.5 million (3.4% of revenue) from $3.6 million (4.4%) year-over-year.

• U.S. Adjusted EBITDA was $700,000 (1.1% margin), marking the fifth consecutive positive quarter.

• Cash and cash equivalents totaled $56.1 million as of September 30, 2024.

Outlook and guidance

• Q4 2024 U.S. revenue expected at $58–$60 million; U.S. gross margin guided at 78.5%–79.5%.

• FY 2024 U.S. revenue expected at $250.8–$252.8 million; U.S. gross margin guided at 79.2%–79.4%.

• FY 2024 Adjusted EBITDA loss margin projected at (2.6)% to (2.2)%; U.S. Adjusted EBITDA margin 1.6–2.1%.

• Management expects operating losses to continue in 2024, but liquidity is sufficient for at least the next 12 months.

• 2025 planning for flat to slightly up U.S. net revenue and similar EBITDA margins, with free cash flow positive expected.