ThredUp (NASDAQ:TDUP) Announces Quarterly Earnings Results

Key Points

• ThredUp exceeded revenue expectations in Q2, reporting $90.8 million in revenue, up 16.9% year over year, while gross margin expanded to 79.9% and adjusted EBITDA reached $4.8 million. However, adjusted earnings per share of negative $0.05 missed the consensus estimate of negative $0.03.
• The company lowered its second-half outlook because customers are becoming more price-sensitive and promotions are expected to create a $7 million revenue headwind. Full-year revenue growth is now projected at approximately 11% at the midpoint, with near-term EBITDA margins under pressure.
• ThredUp is investing in growth initiatives, including customer acquisition through Meta and Pinterest, premium inventory expansion, and AI-powered personalization. Early AI testing produced a 5% increase in item engagement and a 7% rise in profit per new buyer.

ThredUp (NASDAQ:TDUP - Get Free Report) posted its earnings results on Wednesday. The company reported ($0.05) earnings per share for the quarter, missing the consensus estimate of ($0.03) by ($0.02), FiscalAI reports. The firm had revenue of $90.77 million during the quarter, compared to analyst estimates of $90.34 million. ThredUp had a negative return on equity of 36.11% and a negative net margin of 6.68%.

Here are the key takeaways from ThredUp's conference call:

• Q2 results exceeded expectations, with revenue up 16.9% year over year to $90.8 million, gross margin expanding to 79.9%, and adjusted EBITDA rising to $4.8 million. Active buyers increased 21% and orders rose 22%.
• ThredUp lowered its second-half outlook, citing a more price-sensitive lower-income customer base and an expected $7 million revenue headwind from elevated promotions. Full-year revenue is now expected to grow approximately 11% at the midpoint, while near-term EBITDA margins are pressured by lower revenue and continued investments.
• The company is shifting customer acquisition toward Meta and Pinterest, where it reports higher lifetime values and lower customer acquisition costs, while premium supply is expanding. Premium items rose 32% year over year, and management expects the customer mix to continue moving toward more affluent shoppers.
• ThredUp reported early traction from AI-driven personalization and shopping tools. Its real-time personalization engine generated a 5% lift in item engagement and a 7% increase in profit per buyer for new customers in an initial test, while features such as Exact Match and Notify Me aim to improve conversion and repeat visits.
• The newly expanded peer-to-peer direct-listing marketplace surpassed 100,000 listings with an average listing price of $80, but sell-through is slower than in the managed marketplace because sellers tend to price items above market-clearing levels.

ThredUp Stock Performance

Shares of TDUP traded up $0.11 during midday trading on Wednesday, reaching $6.28. The stock had a trading volume of 2,400,862 shares, compared to its average volume of 2,186,494. The firm has a market cap of $810.37 million, a PE ratio of -39.25 and a beta of 2.01. The firm has a 50 day simple moving average of $5.90 and a 200-day simple moving average of $4.88. ThredUp has a one year low of $3.08 and a one year high of $12.28. The company has a current ratio of 0.95, a quick ratio of 0.95 and a debt-to-equity ratio of 0.30.

Analyst Ratings Changes

TDUP has been the subject of several research reports. Wells Fargo & Company decreased their price target on shares of ThredUp from $10.00 to $8.00 and set an "overweight" rating for the company in a research note on Tuesday, May 5th. TD Cowen boosted their price objective on shares of ThredUp from $5.00 to $5.70 and gave the stock a "buy" rating in a research report on Tuesday, May 5th. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of ThredUp in a research report on Wednesday, June 24th. Finally, Telsey Advisory Group lowered their price target on shares of ThredUp from $9.00 to $7.00 and set an "outperform" rating on the stock in a research note on Tuesday, May 5th. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $7.92.

Insider Activity

In other ThredUp news, COO Christopher Homer sold 61,578 shares of the business's stock in a transaction that occurred on Tuesday, June 2nd. The stock was sold at an average price of $4.43, for a total transaction of $272,790.54. Following the transaction, the chief operating officer owned 1,301,843 shares of the company's stock, valued at $5,767,164.49. The trade was a 4.52% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Sean Sobers sold 45,554 shares of the firm's stock in a transaction that occurred on Tuesday, June 2nd. The shares were sold at an average price of $4.43, for a total value of $201,804.22. Following the completion of the sale, the chief financial officer directly owned 572,523 shares of the company's stock, valued at approximately $2,536,276.89. The trade was a 7.37% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Company insiders own 23.10% of the company's stock.

Institutional Investors Weigh In On ThredUp

A number of large investors have recently added to or reduced their stakes in TDUP. Woodson Capital Management LP bought a new position in ThredUp during the fourth quarter worth $11,502,000. Arrowstreet Capital Limited Partnership raised its position in shares of ThredUp by 263.7% in the third quarter. Arrowstreet Capital Limited Partnership now owns 2,056,345 shares of the company's stock valued at $19,432,000 after purchasing an additional 1,491,020 shares during the period. Invesco Ltd. lifted its stake in shares of ThredUp by 3,682.1% during the 2nd quarter. Invesco Ltd. now owns 1,135,351 shares of the company's stock worth $8,504,000 after buying an additional 1,105,332 shares during the last quarter. JPMorgan Chase & Co. lifted its stake in shares of ThredUp by 919.9% during the 2nd quarter. JPMorgan Chase & Co. now owns 785,155 shares of the company's stock worth $5,881,000 after buying an additional 708,169 shares during the last quarter. Finally, State Street Corp boosted its holdings in shares of ThredUp by 26.2% during the 4th quarter. State Street Corp now owns 2,886,417 shares of the company's stock worth $18,444,000 after buying an additional 598,793 shares during the period. Institutional investors own 89.08% of the company's stock.

About ThredUp

ThredUp, Inc operates an online consignment and thrift platform that enables consumers to buy and sell secondhand clothing and accessories. Through its digital marketplace, the company offers curated selections of apparel for women and children, spanning a broad range of brands and styles. Sellers can order a “Clean Out Kit” to send in items they no longer wear, while buyers benefit from discounted prices and a simplified shopping experience powered by ThredUp's in-house authentication, quality control and logistics capabilities.

In addition to its core consumer-to-consumer marketplace, ThredUp has expanded into business-to-business services with its Resale-as-a-Service (RaaS) offering.

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