ThredUp NASDAQ: TDUP reported first quarter fiscal 2026 results that management said exceeded internal expectations, driven by strong buyer growth, improved marketing efficiency, and higher inbound processing. CEO and co-founder James Reinhart said revenue grew 14.6% year-over-year to $81.7 million, gross margin was 79.2%, and the company grew its cash balance by $1.3 million during the quarter.
“March was the best month in our history,” Reinhart said, adding that trailing twelve-month active buyers rose 25% year-over-year and new buyer acquisition “remains strong.”
Q1 results and operating trends
CFO Sean Sobers said the company ended the quarter with a record 1.7 million trailing twelve-month active buyers, up 25% from the prior year. Orders in the first quarter increased 19.3% to 1.6 million. Sobers said the quarter’s performance was driven by “investments into new buyer acquisition, continued LTV to CAC efficiencies, and inbound processing that drove our marketplace flywheel.”
Gross margin of 79.2% was up 10 basis points from the year-ago quarter, which Sobers attributed to higher average selling prices (ASPs) during the quarter. On the bottom line, ThredUp posted a GAAP net loss of $6.5 million, compared with a GAAP net loss of $5.2 million a year earlier. Sobers reported adjusted EBITDA of $2.7 million in the quarter and said the company invested earlier in growth drivers this year, resulting in “better top-line results and more moderate EBITDA.”
On the balance sheet, Sobers said ThredUp ended the quarter with $54.4 million in cash and securities, up from $53.1 million at the start of the quarter. The company invested $4.1 million in capital expenditures and generated $1.3 million in cash during Q1.
Consumer environment: resilient demand, but softer ASPs and conversion
While management highlighted demand resilience, both Reinhart and Sobers cautioned that consumer behavior has become more selective entering the second quarter. Reinhart said ThredUp has observed “average selling prices and conversion rates being slightly lower since early March,” with prices down roughly 3% and conversion rates for existing customers down about 5%.
During Q&A, Reinhart tied the shift in trends to macro developments, noting the pattern “does track” elevated oil and gas prices and referencing “the war in Iran,” while emphasizing that April performance had been “good” quarter-to-date. Sobers added that the company incorporated the observed ASP and conversion environment from late March through April into its guidance, and that assumptions do not include a recovery in those metrics.
Analysts pressed management on how ThredUp posted a record month for buyer acquisition despite the headwinds. Reinhart said both dynamics could be true, pointing to conversion improvements made over prior quarters and saying conversion remains “very strong” even after a pullback. He also said new buyers in Q1 rose in the mid-to-high 20% range year-over-year while customer acquisition costs (CACs) declined by a double-digit percentage.
Product and AI initiatives aimed at conversion and retention
Reinhart outlined three 2026 priorities: growing and retaining high-value buyers, developing AI technology to improve discovery and shopping, and scaling high-quality supply. He said ThredUp has launched its “first agentic product experience” for a segment of customers, where an “agent or a team of agents” leverages event feeds across platforms and reinforcement learning to personalize browsing in real time.
Reinhart also described an initiative to aggregate “exact match” items—starting with dresses—so customers can view the same item in different colors, sizes, or condition tiers without navigating to another page. He said ThredUp believes no scaled resale company has replicated that experience across “thousands of brands and category SKUs,” and that the change is particularly helpful for newer customers.
On marketing, Reinhart said ThredUp increased spending on Meta by 100% year-over-year and on Pinterest by 94% in Q1, while reducing spend on Google. He said Meta and Pinterest cohorts have higher predicted lifetime values, even if CACs are “slightly elevated,” and the company believes the shift supports improved retention and higher LTV over time.
Sobers also addressed buying behavior, saying the company is seeing incremental improvements in order frequency. He said revenue per order has been “slightly lower,” but “orders per buyer actually [are] going up,” and indicated the company expects that trend to continue through 2026.
Supply: new seller surge, TikTok activation, and faster processing
Reinhart said ThredUp’s seven-day sell-through rate—described as its best proxy for demand—rose more than 15% year-over-year, while listings increased 17% year-over-year in Q1. He said those metrics suggest the marketplace needs “more sellers and more supply” to meet buyer demand.
In Q1, ThredUp made “a deliberate investment in new seller acquisition.” Reinhart said 48% of kit requests came from new sellers, and new seller kit requests rose 90% year-over-year. He attributed the surge to TikTok Shop activation, on-site promotion, and targeted seller campaigns.
In response to questions about paid seller acquisition, Reinhart said the company is beginning a more “methodical approach,” including working with creators and influencers on an affiliate basis. He said acquiring sellers can also benefit the buyer side because acquired sellers can convert into buyers and higher-quality supply can improve buyer conversion and LTV.
Regarding TikTok Shop supply, Reinhart said the quality of goods from new suppliers tends to be lower than existing suppliers due to a learning curve, but he characterized the channel as a “huge opportunity” and said ThredUp recently launched premium bags on TikTok. He also said the company is increasing inbound processing “faster than planned” to capitalize on the influx of sellers and what he described as “pent-up demand” from a growing buyer base.
Reinhart said ThredUp tracks supply adequacy using “items per buyer” and an item quality metric he referred to as a “hanger score.” He said items per buyer “flipped” in Q1, signaling incremental buyer demand has outpaced supply availability, supporting the company’s decision to more aggressively ramp processing and supply acquisition.
Guidance: Q2 acceleration, full-year outlook maintained
For the second quarter, Sobers guided revenue to $89 million to $91 million, gross margin of 78.5% to 79.5%, and adjusted EBITDA of approximately 5.2% of revenue. He also projected basic weighted average shares outstanding of about 130 million.
For the full year 2026, Sobers guided revenue to $351.2 million to $356.2 million and raised gross margin expectations to 78.5% to 79.5%. The company expects adjusted EBITDA of approximately 6.1% of revenue, which Sobers said implies about 170 basis points of expansion versus last year. Basic weighted average shares outstanding is expected to be about 131 million.
Sobers said ThredUp plans to reinvest incremental dollars above its guidance into “growth-driving opportunities in processing and marketing,” while Reinhart emphasized that the company is operating at a high level even as it navigates softer ASPs and conversion rates.
About ThredUp NASDAQ: TDUP
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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