ThredUp (TDUP) TD Cowen 9th Annual Future of the Consumer Conference summary

Business performance and financials

• Achieved $71 million in Q1 revenue, 79% gross margins, and 5% EBITDA margin; stock up over 400% YTD.

• Seven consecutive quarters of EBITDA positivity and multiple quarters of free cash flow generation.

• Q1 marked the best customer acquisition quarter ever, with new customers up 95% year-over-year.

• Marketing spend was 18% of sales in Q1, with improved customer cohorts and conversion rates.

• Recent divestiture of a challenging European business allowed renewed focus on the US market.

Market trends and competition

• Second-hand market expected to maintain strong double-digit growth, driven by younger generations.

• Peer-to-peer resale platforms are converging on zero seller fees, shifting monetization to logistics and services.

• Subscale resale businesses face profitability challenges, likely leading to further industry consolidation.

• Off-price retailers like TJ Maxx are key competitors, but no mergers are planned.

• Tariff and de minimis policy changes may benefit resale platforms by increasing relative value.

Technology and innovation

• AI-driven search and personalization, using FashionClip and OpenAI, led to significant improvements in product discoverability and conversion rates.

• AI implementation reduced development time from seven years to 90 days for new search features.

• Experimentation with AI-powered sortation increased conversion rates by 19%.

• AI disproportionately benefits long-tail marketplaces by improving metadata and buyer experience.

• Ongoing focus on leveraging technology to reduce friction and enhance customer satisfaction.