ThredUp Inc.

Hello, and thank you for standing by. My name is Tiffany, and I'll be your conference operator today. At this time, I would like to welcome everyone to the ThredUP first quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Lauren Frasch, Investor Relations. Lauren, please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp's financial results. With me are James Reinhart, ThredUp's CEO and co-founder, and Sean Sober, CFO. We posted our press release and supplemental financial information on our Investor Relations website at ir.thredup.com. This call is being webcast on our IR website, and a replay of this call will be available on the site shortly. Before we begin, I'd like to remind you that we will make forward-looking statements during the course of this call. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our earnings release, the supplemental financial information, and our Forms 10-K and 10-Q for more information on these expectations, assumptions, and related risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and the supplemental financial information, which are distributed and available to the public through our investor relations website located at ir.threadup.com. Now, I'd like to turn the call over to James. James?

good afternoon everyone i'm james reinhardt ceo and co-founder of thredUP thank you for joining our first quarter 2026 earnings call today i'll review our q1 results discuss what drove performance in the quarter and share how we're focused for the balance of the year i'll then hand it over to sean sobers our chief financial officer to walk through the financials in more detail and provide our outlook for q2 and the full year as always we'll close with a question and answer session first to the results In the first quarter, revenue grew 14.6% year-over-year to 81.7 million, while gross margin was 79.2%, and adjusted EBITDA was 3.4% of revenue. We grew our cash balance by 1.3 million. Active buyers on the trailing 12-month basis grew 25% year-over-year, and new buyer acquisition remained strong. March was the best month in our history. All of these metrics exceeded our expectations. However, as we move through Q2, We think it's worth acknowledging that the macro environment remains uncertain. Relative to prior quarters, we do see an incrementally discerning consumer as gas prices remain high and inflation proves to be sticky. We've observed this mainly through average selling prices and conversion rates being slightly lower since early March. Prices are off roughly 3% and conversion rates for existing customers lower by about 5%. Nevertheless, Overall demand has remained resilient year to date, with continued growth in new buyers and strong sell-through driven by existing buyers. That demand, combined with improved marketing efficiency, has supported strong unit economics and has given us confidence in our growth plan for 2026 and how our business leverages and expands margins over time. As we move through 2026, our priorities are focused in three areas, continuing to grow and retain high-value buyers, developing AI technology that helps customers discover and shop across our vast marketplace, and scaling high quality supply from a diverse group of sellers. In Q1, we continue to improve how customers discover, shop, and sell across startups. With millions of unique items, helping customers find the right item quickly is critical to conversion and retention. On that note, I'm excited to share that we now have our first agentic product experience live for a segment of customers. We start by assigning an agent or a team of agents to each customer. The agents consume event feeds across all platforms, web, mobile web, native, and channels, email, push, SMS, and use reinforcement learning to enable personalized browsing at the individual customer level. No two customer journeys are the same. Ultimately, we're working towards a customer experience that will dynamically change everything you see on ThredUP based on your clickstream data in real time. This is the true promise of agentic commerce. Second, we are now aggregating exact match items into an improved customer experience, starting with our highest volume category, dresses. Let me explain. This means a customer who is shopping for a dress might now see options on that product page to buy this dress in a different color or a different size or a different quality standard, all without having to navigate to another product page. While this is standard in e-commerce, No scaled resale company has been able to replicate this experience across thousands of brands and category skews. We think this is a foundational improvement in the resale shopping journey, and ThredUP is uniquely able to do this given our data and vast catalog of photography. This experience is particularly relevant for newer customers and amplifies our broader acquisition strategy as we bring more and more first-time secondhand shoppers to our site. We plan to slowly roll this out to more customers and more categories in the coming quarters. Third, with the ongoing success of our AI product development cycles and elevated conversion rates, we are unlocking scale in new channels. Our spend on meta is up 100% year-over-year in Q1, delivering some of the highest LTV to CAC ratios we've seen. Pinterest is similarly up 94%. This is reduced spend on Google, where we tend to see acquisition costs be lower and churn higher. This evolution is consistent with our goal of increasing early customer retention and expanding LTVs over time, and exemplifies how ThredUP benefits from advances in generative AI technology. Turning to supply, each year our annual resale report has become the industry's go-to resource for understanding where the secondhand market is headed. And this year's edition, which we published last month, identified supply as the defining constraint for the next phase of growth. With U.S. online resale already growing more than three times faster than the broader retail environment, we believe the key to unlocking the next phase of market value is in demand. It's aggregating more high-quality supply online. Let me anchor that in what we're actually seeing on the supply side of our own marketplace. Our seven-day sell-through rate, which we view as the best proxy for overall demand, is up more than 15% year over year. listings are up 17% year-over-year in Q1. The net of these performance indicators is that we need more sellers and more supply to satisfy the growing awareness and demand from buyers on our marketplace. We're moving swiftly to do so. In Q1, we made a deliberate investment in new seller acquisition. Of our total kit requests in the quarter, 48% came from sellers who were new to ThredUP. New seller kit requests grew 90% year-over-year. Overall, this was one of the largest surges in new sellers in Dredd's history, driven by TikTok shop activation, onsite promotion, and targeted seller campaigns. With so many new supplier initiatives in motion, we've renewed our focus on onboarding, seller education, and segmentation, with particular attention to TikTok shop, where we just recently launched premium bags. In addition, we're increasing inbound processing faster than planned to capitalize on this influx of new sellers and build on the momentum we saw in Q1. The long-term picture is clear. A larger seller base, improved supply quality, and more aggressive processing should create a faster growing, more liquid, more profitable marketplace. Now let me turn to other areas of opportunity in our business. Our direct listings beta remains promising as we've maintained our goal of growing 10% week over week while continuing to launch new features that deliver the highest quality buyer and seller experience. First, using our vast data set, we're launching a suite of improved seller pricing tools to help items sell more quickly. Second, leveraging the customer data we have accumulated over the years, we're finalizing the rollout of a relisting tool that allows our core marketplace buyer to resell their previously purchased items with one click, or make their entire purchase closet shoppable. This relisting feature is a powerful and unique asset, given we've sold over 100 million items that ostensibly could be made available to others with one click. We think about this as, quote, lean back selling, and it's more consistent with our approach to serving casual sellers versus professionals looking to run a small business. Finally, we are improving seller verification and training so that we reduce potential for fraud, eliminate subpar listings, and build more trust in our marketplace over time. On the Resell as a Service, or RAS, front, we've landed several new apparel brand partners that will be launching resale experiences with us in the coming quarters. We've also deepened engagement with existing clients. A standout example was Reformation's in-store trading event in New York City, which went viral on TikTok, a playbook we're now replicating across the entire partner base. Earth Month was a particularly strong activation period, with Land's End, Madewell, and Abercrombie all running RAS campaigns that drove meaningful engagement. As we look ahead, we remain focused on executing our growth plan amidst an ever-changing consumer environment. Our priority is building a marketplace that delivers clear value to buyers and compelling monetization and convenience for sellers. We are confident our focus on conversion, retention, and supply quality on top of our strong unit economics will position us to deliver durable compounding performance over time. With that, I'll turn it over to Sean to walk through the financials in more detail and provide our outlook for Q2 and the full year.