ThredUp Inc. (TDUP) Bundle
A Brief History of ThredUp
Founded in 2009, ThredUp has positioned itself as a leader in the online consignment and thrift store market. As of 2024, ThredUp operates primarily through a model that combines resale-as-a-service (RaaS) with traditional e-commerce.
Financial Performance Overview
For the third quarter of 2024, ThredUp reported total revenue of $73.0 million, a decrease of 11.0% compared to $82.0 million in the same period of 2023. This decline was primarily attributed to a significant drop in product revenue, which fell by 45.6% to $13.2 million, while consignment revenue increased by 3.5% to $59.9 million.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $73.0 million | $82.0 million | (11.0%) |
| Product Revenue | $13.2 million | $24.2 million | (45.6%) |
| Consignment Revenue | $59.9 million | $57.8 million | 3.5% |
For the nine months ended September 30, 2024, total revenue was $232.4 million, a decline of 3.4% from $240.6 million in 2023. The product revenue for the nine months also saw a substantial decline of 42.8%, totaling $47.4 million compared to $82.9 million in the prior year.
Operating Metrics
Active Buyers totaled 1.6 million in Q3 2024, down 7.4% from 1.8 million a year prior. The number of orders also decreased by 13.9%, totaling 1.6 million in Q3 2024 compared to 1.8 million in Q3 2023.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Active Buyers | 1.6 million | 1.8 million | (7.4%) |
| Orders | 1.6 million | 1.8 million | (13.9%) |
Gross Margin Analysis
ThredUp's gross margin for Q3 2024 was 71.2%, an increase of 220 basis points from 69.0% in Q3 2023. The nine-month gross margin also improved, standing at 70.3% compared to 67.9% in the prior year. This improvement is largely due to a higher proportion of revenue derived from the consignment model, which typically has a higher gross margin than product sales.
Net Loss and Operating Expenses
ThredUp reported a net loss of $24.8 million for Q3 2024, compared to a net loss of $18.1 million in Q3 2023. The net loss margin increased to 33.9% from 22.0% year-over-year. Operating expenses totaled $76.8 million, up from $74.8 million in the previous year.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Loss | $(24.8 million) | $(18.1 million) | 37.0% |
| Net Loss Margin | 33.9% | 22.0% | 11.9% |
| Operating Expenses | $76.8 million | $74.8 million | 2.7% |
Cash Flow and Liquidity
As of September 30, 2024, ThredUp had cash, cash equivalents, and short-term marketable securities amounting to $55.3 million. The company reported a net cash used in operating activities of $(232,000) for the nine months ended September 30, 2024, compared to $(14.6 million) in the same period of 2023.
Recent Developments
In 2024, ThredUp has focused on transitioning its business model towards consignment, reflecting a strategic decision to improve profitability and streamline operations. This shift has involved reallocating resources and re-evaluating market strategies, particularly in Europe, where the company has seen reduced focus in light of strategic alternatives being considered.
A Who Owns ThredUp Inc. (TDUP)
Ownership Structure
As of September 30, 2024, ThredUp Inc. (TDUP) has a total of 113,758,000 shares of common stock issued and outstanding. The company’s equity structure is composed of Class A and Class B common stock, with a par value of $0.0001. The total shares authorized are 1,120,000,000.
| Ownership Type | Shares Outstanding | Percentage of Total Shares |
|---|---|---|
| Class A Common Stock | 112,000,000 | 98.5% |
| Class B Common Stock | 1,758,000 | 1.5% |
Major Shareholders
The following table summarizes the major shareholders of ThredUp Inc. as of 2024:
| Shareholder | Shares Owned | Percentage of Ownership |
|---|---|---|
| Institutional Investors | 70,000,000 | 61.5% |
| Insider Holdings | 20,000,000 | 17.6% |
| Public Float | 23,758,000 | 20.9% |
Recent Changes in Ownership
In the third quarter of 2024, ThredUp reported a net loss of $24.8 million. This financial performance has influenced stock ownership dynamics, particularly affecting institutional investors who may reassess their positions in light of the company’s ongoing challenges.
Stock Performance and Market Trends
As of September 30, 2024, ThredUp's stock price has been volatile, reflecting broader trends in the resale market and economic conditions. The stock has seen a decline of approximately 11% compared to previous quarters, driven by a decrease in active buyers and orders, impacting overall revenue growth.
| Performance Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $73.0 million | $82.0 million |
| Net Loss | $(24.8 million) | $(18.1 million) |
| Active Buyers | 1.6 million | 1.8 million |
| Orders Processed | 1.6 million | 1.8 million |
Conclusion on Ownership Dynamics
The ownership landscape of ThredUp Inc. is characterized by significant institutional investment, alongside a notable percentage of insider ownership. The recent financial performance, including a substantial net loss, suggests potential shifts in shareholder strategies and market perceptions as the company navigates its operational challenges.
ThredUp Inc. (TDUP) Mission Statement
Mission Statement Overview
ThredUp Inc. aims to inspire a new generation of consumers to think sustainably by providing a platform for buying and selling secondhand clothing. The company focuses on making the resale experience easy and enjoyable, bridging the gap between online and offline retail through its proprietary technology.
Strategic Focus Areas
- Environmental Sustainability: ThredUp emphasizes reducing waste in the fashion industry by promoting the reuse of clothing.
- Consumer Convenience: The company simplifies the resale process for sellers by offering Clean Out Kits, allowing users to send in their unwanted clothing effortlessly.
- Brand Partnerships: ThredUp collaborates with leading retailers through its RaaS (Resale-as-a-Service) model to enhance brand loyalty and customer engagement.
Recent Financial Performance
As of September 30, 2024, ThredUp reported a total revenue of $73.0 million, marking an 11.0% decrease from the previous year. The decrease was primarily attributed to a 45.6% decline in product revenue, offset slightly by a 3.5% increase in consignment revenue. Active buyers totaled 1.6 million, a decrease of 7.4% year-over-year.
Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $73.0 million | $82.0 million | -11.0% |
| Gross Profit | $52.0 million | $56.6 million | -8.2% |
| Net Loss | ($24.8 million) | ($18.1 million) | +37.0% |
| Active Buyers | 1.6 million | 1.8 million | -7.4% |
| Orders | 1.6 million | 1.8 million | -13.9% |
Gross Margin Analysis
The gross margin for Q3 2024 was 71.2%, reflecting an increase of 220 basis points compared to the same period in 2023. This improvement was driven by a higher proportion of revenue from the consignment model, which has a higher gross margin compared to product sales.
Cost Structure
ThredUp's operational expenses for the three months ended September 30, 2024, included:
- Operations, Product, and Technology: $37.2 million
- Marketing: $15.3 million
- Sales, General, and Administrative: $14.5 million
Impairment Charges
In Q3 2024, ThredUp recognized an impairment of long-lived assets amounting to $9.8 million due to strategic shifts in its European operations, impacting its overall net loss for the quarter.
Liquidity Position
As of September 30, 2024, ThredUp held $55.3 million in cash, cash equivalents, and short-term marketable securities. The company also had a term loan facility with $22.5 million remaining available for drawdown, demonstrating a solid liquidity position to support ongoing operations and strategic initiatives.
Future Outlook
ThredUp anticipates continued operating losses into 2024 as it invests in growth and infrastructure while evaluating its European market strategy. The company aims to leverage its growing consignment revenue to enhance profitability in the long term.
How ThredUp Inc. (TDUP) Works
Business Model
ThredUp Inc. operates an online consignment and thrift store that allows consumers to buy and sell secondhand clothes. The company primarily focuses on sustainable fashion by promoting the resale of clothing, which reduces waste and encourages circular economy principles.
Revenue Streams
ThredUp generates revenue through two main channels:
- Consignment Revenue: The majority of ThredUp's revenue comes from its consignment model, where sellers send in their clothes and receive a payout after the sale.
- Product Revenue: This includes revenue from clothing purchased directly by ThredUp for resale.
Financial Performance (2024)
ThredUp reported total revenue of $73.0 million for the third quarter of 2024, a decrease of 11.0% year-over-year. This decline was primarily driven by a 45.6% decrease in product revenue, which totaled $13.2 million, compared to $24.2 million in the same quarter of 2023. In contrast, consignment revenue increased by 3.5% to $59.9 million from $57.8 million in the previous year.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $73.0 million | $82.0 million | (11.0) |
| Product Revenue | $13.2 million | $24.2 million | (45.6) |
| Consignment Revenue | $59.9 million | $57.8 million | 3.5 |
| Gross Profit | $51.98 million | $56.63 million | (8.2) |
| Net Loss | $(24.77 million) | $(18.08 million) | 37.0 |
| Active Buyers | 1.632 million | 1.763 million | (7.4) |
| Orders | 1.553 million | 1.803 million | (13.9) |
Cost Structure
ThredUp's cost structure includes expenses related to consignment and product revenue. For Q3 2024, the total cost of revenue was $21.04 million, down from $25.42 million in Q3 2023, representing a decrease of 17.2%.
Operating Expenses
Operating expenses for Q3 2024 totaled $76.85 million, up from $74.82 million in Q3 2023. This includes:
- Operations, Product, and Technology: $37.19 million
- Marketing: $15.30 million
- Sales, General, and Administrative: $14.55 million
- Impairment of Long-lived Assets: $9.81 million
Balance Sheet Highlights
As of September 30, 2024, ThredUp had total cash and cash equivalents of $55.3 million. The company also had a term loan with an outstanding balance of $23.3 million and an effective interest rate of 10.22%.
Long-term Debt
ThredUp's term loan agreement allows for borrowing up to $48.8 million, with $22.5 million allocated for equipment purchases. The loan matures on July 14, 2027.
Market Position and Strategy
ThredUp is positioned as a leader in the online resale market, focusing on sustainability and the circular economy. The company has shifted its strategy towards a consignment model, which is expected to improve profitability over time.
Future Outlook
Looking ahead, ThredUp anticipates continued operating losses as it invests in growth and infrastructure. The company aims to enhance its technology and distribution capabilities to facilitate a smoother customer experience and drive engagement.
How ThredUp Inc. (TDUP) Makes Money
Revenue Streams
ThredUp Inc. generates revenue primarily through two key streams: consignment revenue and product revenue. The company has strategically transitioned from a product-oriented model to a consignment model, which has significantly influenced its revenue structure.
| Revenue Type | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change (%) |
|---|---|---|---|
| Consignment Revenue | $59,850 | $57,838 | 3.5% |
| Product Revenue | $13,171 | $24,211 | (45.6%) |
| Total Revenue | $73,021 | $82,049 | (11.0%) |
Consignment Revenue Model
Consignment revenue represents a significant portion of ThredUp's income, accounting for approximately 82.0% of total revenue in Q3 2024. This model allows ThredUp to sell secondhand clothing on behalf of sellers, who receive a payout based on the sale price of their items.
The strategic shift towards consignment has resulted in a 17.2% increase in consignment revenue for the nine months ending September 30, 2024, compared to the same period in 2023, reaching $184.9 million.
Product Revenue and Gross Margin
Product revenue has seen a significant decline, dropping 42.8% for the nine months ended September 30, 2024, amounting to $47.4 million. This decline is attributed to the company's strategic decision to pivot towards a consignment model, leading to a lower focus on selling new products.
The gross margin for consignment revenue remains high at 81.0% for Q3 2024, whereas product gross margin has decreased to 26.5%.
| Gross Margin Comparison | Q3 2024 (%) | Q3 2023 (%) |
|---|---|---|
| Consignment Gross Margin | 81.0% | 82.5% |
| Product Gross Margin | 26.5% | 36.8% |
Customer Engagement and Active Buyers
As of September 30, 2024, ThredUp reported 1.6 million Active Buyers, a decrease of 7.4% from the previous year. The number of orders also declined by 13.9%, totaling 1.6 million orders.
Marketing and Operational Expenses
Marketing expenses for Q3 2024 were $15.3 million, representing a decrease of 21.2% year-over-year. This reduction is due to a strategic cutback in advertising costs and personnel-related expenses.
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Marketing Expenses | $15,299 | $19,406 | (21.2%) |
| Operations, Product, and Technology Expenses | $37,190 | $40,355 | (7.8%) |
Net Loss and Financial Performance
ThredUp reported a net loss of $24.8 million for Q3 2024, compared to a net loss of $18.1 million in Q3 2023. The net loss margin for Q3 2024 stood at (33.9%) of revenue.
Gift Cards and Loyalty Programs
ThredUp also generates revenue through gift cards and a customer loyalty program. As of September 30, 2024, the company had a gift card liability of $5.9 million and recognized $0.3 million in gift card revenue for Q3 2024. The loyalty program has contributed $2.8 million in revenue from reward redemptions.
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Resources:
- ThredUp Inc. (TDUP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ThredUp Inc. (TDUP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ThredUp Inc. (TDUP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.