1stdibs.com Q1 Earnings Call Highlights

Key Points

• 1stDibs reported Q1 GMV of $89.7 million (down 5%) and revenue of $22.4 million (down 1%) while delivering positive adjusted EBITDA of about $600,000 (~2.5% margin); average order value rose ~7% but active buyers fell ~10% after deliberate marketing cuts.
• Management sharply reduced sales and marketing spend (S&M expense down 31% to $6.3M) and reallocated resources to product and engineering (technology spend up 10%), helping drive operating expenses down 11% and lift gross margin to ~74% as the company reaffirmed its 2026 framework targeting positive adjusted EBITDA and free cash flow.
• The 2026 roadmap emphasizes AI-assisted development (over 50% of new code) across discovery, pricing, shipping and service—launching visual and natural-language search, price-parity expansion, shipping upgrades and AI seller/buyer tools—and management expects to return to GMV growth by Q4 irrespective of market recovery.

1stdibs.com NASDAQ: DIBS reported first-quarter 2026 results that company executives said aligned with internal expectations, reflecting a deliberate pullback in sales and marketing spending paired with continued investment in product and engineering. Management reiterated its 2026 financial framework, including positive full-year adjusted EBITDA and free cash flow, and said it still expects to return to year-over-year GMV growth by the fourth quarter.

Management cites disciplined execution amid soft demand

Chief Executive Officer David Rosenblatt said the first quarter delivered on “disciplined execution, durable profitability, and steady roadmap progress,” while acknowledging a challenging demand backdrop. Rosenblatt pointed to the U.S. housing market “hover[ing] near a 30-year low,” which he said has been weighing on consumer appetite for luxury home goods.

Despite the soft environment, Rosenblatt emphasized a long-term growth opportunity, noting that there are “approximately 5 million U.S. households worth at least $5 million,” compared with 1stDibs’ active buyer base of about 58,300. He said the company’s goal is to generate growth “irrespective of the timing of a market recovery,” adding that when conditions normalize, the company expects to be positioned to accelerate growth.

Q1 results: GMV down 5% as profitability remains positive

For the quarter ended March 31, 2026, the company reported gross merchandise value (GMV) of $89.7 million, down 5% year over year, and revenue of $22.4 million, down 1%. Rosenblatt attributed the top-line performance to both market conditions and the company’s decision to cut performance marketing spending by nearly 50% in the fourth quarter of 2025.

Chief Financial Officer Tom Etergino said the quarter marked the second consecutive period of positive adjusted EBITDA, which he described as validation of structural cost changes. Adjusted EBITDA was approximately $600,000, or about a 2.5% margin.

Etergino said traffic declined across both paid and organic channels as a “direct and expected consequence” of the sales and marketing reductions and soft demand. Order volume fell 12%, but the company recorded its 10th consecutive quarter of conversion growth, which management attributed to product investments.

Average order value (AOV) reached about $2,750, up 7%, while median order value was approximately $1,400, up 12%. Etergino said the increase reflected “a continued mix shift towards higher value transactions, especially from trade.” He added that trade GMV grew year over year, while consumer GMV declined.

On categories, Etergino said vintage and antique furniture grew year over year, while all other categories declined. The company ended the quarter with about 58,300 active buyers, down 10%, which Etergino said reflected the “deliberate reduction” in sales and marketing spend.

Margins, expense mix, and capital allocation

Etergino said take rates increased about 120 basis points, reflecting 2025 pricing actions, Sponsored Listings growth, and a favorable prior-year comparison. Gross profit was $16.7 million, up 2%, and gross margin was about 74%, which management said was at the high end of the company’s target range due to lower hosting and software costs as a percentage of revenue.

Total operating expenses were $20.0 million, down 11% year over year, continuing what Etergino called a multi-year cost reset that began in 2022. Within that total, he highlighted a reallocation of spending:

• Sales and marketing expense: $6.3 million, down 31%, with sales and marketing representing 28% of revenue versus 40% a year ago.
• Technology development expense: $6.2 million, up 10%, reflecting annual merit increases and higher headcount-related costs tied to shifting resources toward product and engineering; 28% of revenue versus 25% a year ago.
• General and administrative expense: $6.8 million, down 2%.

Etergino said operating expenses included approximately $500,000 in severance charges, “predominantly in sales and marketing,” as the company refined its organizational structure. Rosenblatt added that while operating expenses declined 11%, technology development spending grew 10% because the company views product and engineering as its “highest ROI investment.”

Roadmap focus: discovery, pricing, shipping, and service

Rosenblatt said the company’s 2026 roadmap is organized around four pillars—discovery, pricing, shipping, and service—intended to remove friction and modernize the platform. He said AI-assisted development accounted for more than 50% of new code, up from about 30% in the prior quarter, helping the team “ship faster than ever.”

On discovery, Rosenblatt said the company launched “1stDibs Tastemakers,” a brand ambassador program, and debuted a podcast titled “Objects of Desire,” hosted by editorial director Anthony Barzilay Freund and interior designer Noz Nozawa. He said early results from Tastemakers showed “measurable increases in reach and engagement on Instagram.”

He also cited AI-driven metadata enrichment, saying search success improved by nearly 4% and null results decreased by more than 25%. In response to an analyst question, Rosenblatt said null searches—where a buyer receives zero results—can drive shoppers to leave the experience, particularly given 1stDibs’ long-tail inventory of one-of-a-kind items. He said the company plans to launch visual search in the second quarter and expects an initial natural-language search release in the third quarter.

On pricing, Rosenblatt said the company expanded its “price parity” initiative, increasing coverage by 44% by adding two additional resale platforms and deepening reach on existing ones. He said early data suggests parity-priced items convert at higher rates. In the second quarter, he said 1stDibs plans to invest in the offer and product detail page experience and to more prominently surface its price match guarantee and comparable historical transaction pricing.

On shipping, Rosenblatt said the company integrated USPS into its shipping infrastructure, reducing parcel rates for packages under 20 pounds by roughly 30% to 50%. He said 1stDibs plans to introduce a machine learning-powered quoting tool in the second quarter for large items, and to upgrade tracking by expanding supported carriers from 10 to more than 70. Rosenblatt noted that about 25% of orders currently lack real-time tracking.

On service, Rosenblatt said the company is rolling out AI-assisted listing tools for sellers to streamline tasks like generating optimized titles and improving image upload workflows. He also said the company plans to launch an AI-powered client service chatbot for buyers and sellers in the second quarter.

Both Rosenblatt and Etergino referenced the company’s annual seller sentiment survey, which for the second consecutive year found that 1stDibs is the primary sales channel for its sellers, surpassing their own showrooms.

Q2 outlook and 2026 framework reiterated

For the second quarter, Etergino guided for GMV of $86 million to $91 million (down 4% to up 1%), net revenue of $21.6 million to $22.6 million (down 2% to up 2%), and adjusted EBITDA margin of negative 2% to positive 2%. He said the outlook reflects a “deliberate strategic trade-off” from reduced sales and marketing spend as the company prioritizes higher margins over short-term volume.

Etergino also said revenue guidance reflects continued growth in Sponsored Listings and a modest contribution from the company’s “first sponsored event,” which it plans to test in the second quarter as part of its advertising program.

On the full year, Etergino said the company is not providing formal annual guidance but reaffirmed its 2026 framework, including gross margins of 72% to 74%, take rates of 25% to 26%, and expectations for positive adjusted EBITDA and positive free cash flow. Rosenblatt reiterated confidence in a return to GMV growth by the fourth quarter, saying on the Q&A that the expectation is “not dependent on a market recovery,” citing the lapping of marketing reductions and the compounding impact of product improvements.

About 1stdibs.com NASDAQ: DIBS

1stDibs.com is an online marketplace specializing in high-end furniture, fine art, jewelry, watches, fashion and decor. The platform curates offerings from independent dealers, galleries and luxury brands, enabling vetted sellers to reach discerning buyers around the world. Headquartered in New York with an additional office in Paris, 1stDibs has built a reputation for quality and authenticity through rigorous seller screening and detailed item vetting.

Launched in 2001 by founder Michael Bruno, the company has grown into a leading destination for both private collectors and interior design professionals.

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