ThredUp Inc. (NASDAQ:TDUP) Q4 2024 Earnings Conference Call March 3, 2025 4:30 PM ET Company Participants Lauren Frasch - Senior Director, Investor Relation & Strategic Finance James Reinhart - Co-Founder & Chief Executive Officer Sean Sobers - Chief Financial Officer Conference Call Participants Ike Boruchow - Wells Fargo Dylan Carden - William Blair Bernie McTernan - Needham & Company Kunal Madhukar - Water Tower Research Operator Good afternoon, ladies and gentlemen, and welcome to the ThredUp Inc. fourt ...

INVESTOR PRESENTATION Fourth Quarter 2024 © THREDUP The following contains confidential information. Do not distribute without permission. Safe harbor This presentation and the accompanying oral commentary contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forwa ...

Financial Performance - As of December 31, 2024, the company had cash and cash equivalents of $31.9 million and marketable securities of $12.3 million, primarily consisting of money market funds and U.S. treasury securities[305]. - Inflation has significantly increased in recent months, affecting the company's gross margin and operating expenses, potentially slowing revenue growth[307]. - The Term Loan carries variable interest rates tied to the prime rate, with a floor of 4.75%, exposing the company to interest rate risk[306]. Competition - The company faces intense competition from various retailers, including secondhand marketplaces and large online retailers, impacting its market position[32]. Workforce and Diversity - The company employs 1,630 individuals, including 1,424 distribution center employees, and maintains good relations with its workforce[42]. - The company is committed to cultivating a diverse workforce and has a majority female and underrepresented minority staff[44]. Intellectual Property - The company has issued patents in the United States to protect its proprietary inventions and is actively pursuing additional patent protection[35]. - The company’s proprietary algorithm technologies are protected by trade secret laws, in addition to its patents and trademarks[34]. Compliance and Privacy - The company’s privacy policies are designed to comply with various laws regarding consumer information, which could pose compliance challenges[39]. Business Operations - On November 30, 2024, the company divested 91.0% of the common stock of Remix US Holdings Inc., resulting in the discontinuation of its European operations[31].

Revenue Projections - Preliminary total revenue for Q4 2024 is projected to be between $66.7 million and $67.2 million, exceeding previous guidance of $58.0 million to $60.0 million, representing an annual growth of 9%[3] - Combined revenue, including the European business until its divestiture, is projected to be between $74.5 million and $75.0 million, surpassing previous guidance of $67.2 million to $69.2 million[4] Gross Margin Expectations - Gross margin for Q4 2024 is expected to be between 80.2% and 80.4%, higher than the previous guidance of 78.5% to 79.5%[3] - Combined gross margin is expected to be between 75.9% and 76.1%, up from the previous guidance of 72.3% to 73.3%[4] EBITDA and Profitability - Adjusted EBITDA margin for Q4 2024 is anticipated to be between 6.4% and 6.9%, compared to the previous guidance of 0.0% to 2.0%[3] - The company anticipates sustaining its momentum into 2025, with a focus on profitability and positive adjusted EBITDA[15] Net Loss Projection - The net loss as a percentage of total revenue is projected to be between (12.6)% and (12.0)% for Q4 2024[3] Business Strategy and Market Position - Following the divestiture of Remix, ThredUp will no longer report combined results or provide a combined outlook going forward[5] - The company has processed over 200 million unique secondhand items from 60,000 brands across 100 categories, emphasizing its market position[14] - ThredUp's focus on U.S. operations and AI-driven enhancements contributed to solid growth in its core business[2]

Core Insights - ThredUp Inc. reported a return to growth in Q4 2024, with a focus on leveraging technology investments for future profitability [2][5][9] - The company divested 91% of its European business, Remix, which is now classified as a discontinued operation [2][5] Financial Highlights - Q4 2024 revenue reached $67.3 million, a 9% increase year-over-year, with a gross margin of 80.4% [5][6] - Full year 2024 revenue totaled $260.0 million, reflecting a 1% growth year-over-year, with a gross margin of 79.7% [5][6] - Active Buyers decreased by 6% to 1,274 thousand in Q4 2024, while Orders increased by 2% to 1,226 thousand [5][6] Profitability Metrics - Loss from continuing operations for Q4 2024 was $8.1 million, improving from a loss of $8.5 million in Q4 2023 [6] - Adjusted EBITDA from continuing operations was $5.0 million in Q4 2024, compared to $2.5 million in Q4 2023 [6] - For the full year 2024, the loss from continuing operations was $40.0 million, an improvement from $52.4 million in 2023 [6] Business Developments - The company achieved record gross margins for both Q4 and full year 2024, indicating improved operational efficiency [5][6] - Customer experience updates led to the strongest Q4 for new buyer acquisition in ThredUp's history, with new buyer conversion rates at all-time highs [10] Future Outlook - For Q1 2025, ThredUp expects revenue between $67.5 million and $69.5 million, and for the full year 2025, revenue is projected between $270.0 million and $280.0 million [9][10] - The company anticipates maintaining gross margins between 77.0% and 79.0% for both Q1 and full year 2025 [9][10]

The Consumer Staples group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is ThredUp (TDUP) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Consumer Staples peers, we might be able to answer that question.ThredUp is a member of our Consumer Staples group, which includes 180 different companies and currently sits at #10 in the Zacks Sector Rank. The Zacks Sector Rank gauges the s ...

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through the Zacks Momentum Style Score [2] Group 2: ThredUp (TDUP) Stock Analysis - ThredUp (TDUP) has shown a price increase of 18% over the past four weeks, indicating growing investor interest [3] - Over the past 12 weeks, TDUP's stock gained 48%, demonstrating its ability to deliver positive returns over a longer timeframe [4] - TDUP has a high beta of 1.75, suggesting it moves 75% more than the market in either direction, indicating fast-paced momentum [4] - The stock has a Momentum Score of A, suggesting it is an opportune time to invest [5] - TDUP has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - The stock is trading at a Price-to-Sales ratio of 0.93, indicating it is reasonably valued at 93 cents for each dollar of sales [6] Group 3: Investment Opportunities - TDUP is highlighted as a strong candidate for investment, with potential for further price appreciation [7] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Zacks offers over 45 Premium Screens to assist in identifying winning stock picks based on various investing styles [8]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: ThredUp (TDUP) - ThredUp currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating a favorable outlook for the stock [3][4]. - The stock has shown significant price performance, with a 59.46% increase over the past month, compared to a flat performance in the Zacks Consumer Products - Staples industry [6]. - Over the last three months, ThredUp shares have risen by 151.84%, and by 22.92% over the past year, outperforming the S&P 500, which increased by 5.07% and 22.47% respectively [7]. Trading Volume - ThredUp's average 20-day trading volume is 1,505,121 shares, which is a useful indicator of market interest and can signal bullish or bearish trends [8]. Earnings Outlook - Recent earnings estimate revisions for ThredUp have been positive, with one estimate moving higher in the last two months, raising the consensus estimate from -$0.61 to -$0.56 [10]. - For the next fiscal year, there has been one upward revision with no downward revisions, indicating a stable earnings outlook [10]. Conclusion - Given the positive momentum indicators and earnings outlook, ThredUp is positioned as a strong candidate for investors seeking short-term gains [12].

Financial Results Announcement - ThredUp will release its financial results for Q4 and the full year ended December 31, 2024 on March 3, 2025 after U.S. market close [1] - A conference call and live webcast will be held on the same day at 1:30 p.m. PT / 4:30 p.m. ET [1] Company Overview - ThredUp is one of the largest online resale platforms for apparel, shoes, and accessories, focusing on transforming resale through technology [3] - The platform allows sellers to easily clean out their closets and unlock value, benefiting both themselves and charities while promoting sustainability [3] - Buyers can shop for premium and luxury brands at discounts of up to 90% off estimated retail prices [3] - ThredUp has processed over 200 million unique secondhand items from 60,000 brands across 100 categories, contributing to a more sustainable fashion industry [3]

Core Viewpoint - Momentum investing focuses on buying stocks that are trending upwards rather than undervalued stocks, with the belief that one can achieve higher returns in a shorter time frame [1] Group 1: Momentum Investing Strategy - Momentum investing is characterized by the approach of "buying high and selling higher," contrasting with the traditional "buy low and sell high" strategy [1] - Identifying the right entry point for momentum stocks can be challenging, as these stocks may lose momentum if their valuations exceed future growth potential [1] Group 2: ThredUp (TDUP) Analysis - ThredUp (TDUP) has shown significant price momentum, with a four-week price change of 40.4%, indicating growing investor interest [3] - Over the past 12 weeks, TDUP's stock price has increased by 134.7%, demonstrating its ability to deliver positive returns over a longer time frame [4] - TDUP has a beta of 1.75, suggesting that it moves 75% more than the market in either direction, indicating fast-paced momentum [4] Group 3: Valuation and Earnings Estimates - TDUP has a Momentum Score of B, suggesting it is an opportune time to invest in the stock to capitalize on its momentum [5] - The stock has a Zacks Rank 2 (Buy) due to an upward trend in earnings estimate revisions, which typically attracts more investors [6] - TDUP is trading at a Price-to-Sales ratio of 0.79, indicating it is relatively cheap, as investors pay only 79 cents for each dollar of sales [6] Group 4: Additional Investment Opportunities - Besides TDUP, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, which can help identify potential winning stocks [8]