ThredUp (TDUP) 8-K Results of Operations and Financial Condition

Exhibit 99.2

ThredUp Inc.

Third Quarter 2022 Supplemental Financials

Key Financial Metrics for the Quarter

•Revenue of $67.9 million

◦vs. $63.3 million in 3Q21

◦Growth of 7.4% YoY

•Gross profit of $44.5 million

◦vs. $46.1 million in 3Q21

◦Decline of 3.5% YoY

•Gross margin of 65.5%

◦vs. 72.8% in 3Q21

•GAAP net loss of $23.7 million

◦vs. net loss of $14.7 million in 3Q21

•Adjusted EBITDA loss of $11.0 million

◦vs. loss of $7.8 million in 3Q21

•Adjusted EBITDA loss margin of 16.2%

◦vs. loss margin of 12.4% in 3Q21

•Cash, cash equivalents, restricted cash and short-term marketable securities were $130.6 million at the quarter end

•Total quarter Active Buyers of 1.694 million

◦vs. 1.439 million in 3Q21

◦An increase of 17.7% YoY

•Total Orders of 1.618 million

◦vs. 1.300 million in 3Q21

◦An increase of 24.5% YoY

Conference Call and Webcast

•The live call is accessible at: https://event.loopup.com/SelfRegistration/registration.aspx?booking=cLxjdNsWn3NsASUiYTFOUWiYSEPmkD8Dci5Q30o6Hps=&b=2389e96d-457b-46a8-bebb-fec356d5b03

•The live and archived webcast and all related earnings materials will be available at thredUP’s investor relations website: ir.thredup.com.

Financial Outlook

For fourth quarter 2022, thredUP expects:

•Revenue in the range of $62 million to $64 million

•Gross margin in the range of 62.0% to 64.0%

•Adjusted EBITDA loss margin in the range of 16.5% to 14.5%

•Depreciation and amortization of approximately $3.6 million

•Stock-based compensation of approximately $6.2 million

•Weighted-average shares of approximately 100 million

For fiscal year 2022, thredUP expects:

•Revenue in the range of $279 million to $281 million

•Gross margin in the range of 66.5% to 67.0%

•Adjusted EBITDA loss margin in the range of 17.0% to 16.5%

•Depreciation and amortization of approximately $13.9 million

•Stock-based compensation of approximately $27.0 million

•Weighted-average shares of approximately 100 million

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ThredUp Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages, unaudited)
Three Months Ended	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022			September 30, 2022
Revenue:
Consignment	$	33,657		$	34,211		$	44,688		$	48,597		$	48,071		$	44,758		$	47,435		$	48,536		$	41,553
Product	13,275			9,222			10,992			11,362			15,203			28,121			25,260			27,885			26,392
Total revenue	46,932			43,433			55,680			59,959			63,274			72,879			72,695			76,421			67,945
Cost of revenue:
Consignment	7,984			9,087			10,832			10,687			10,080			10,257			10,049			10,218			9,087
Product	6,172			4,611			5,130			5,140			7,100			14,434			12,418			13,555			14,362
Total cost of revenue	14,156			13,698			15,962			15,827			17,180			24,691			22,467			23,773			23,449
Gross profit	32,776			29,735			39,718			44,132			46,094			48,188			50,228			52,648			44,496
Gross margin % of revenue	69.8		%	68.5		%	71.3		%	73.6		%	72.8		%	66.1		%	69.1		%	68.9		%	65.5		%
Operating expenses:
Operations, product and technology	25,856			27,928			28,312			31,062			32,081			36,624			39,161			43,961			38,702
Marketing	10,614			10,252			15,446			15,957			16,941			15,281			16,978			19,640			14,752
Sales, general and administrative	6,891			7,802			10,638			10,999			12,569			14,608			14,664			17,380			15,232
Total operating expenses	43,361			45,982			54,396			58,018			61,591			66,513			70,803			80,981			68,686
Operating expenses % of revenue	92.4		%	105.9		%	97.7		%	96.8		%	97.3		%	91.3		%	97.4		%	106.0		%	101.1		%
Operating loss	(10,585)			(16,247)			(14,678)			(13,886)			(15,497)			(18,325)			(20,575)			(28,333)			(24,190)
Operating loss % of revenue	(22.6)		%	(37.4)		%	(26.4)		%	(23.2)		%	(24.5)		%	(25.1)		%	(28.3)		%	(37.1)		%	(35.6)		%
Interest and other expense (income), net	419			698			1,466			480			(799)			(437)			120			57			(521)
Loss before provision for income taxes	(11,004)			(16,945)			(16,144)			(14,366)			(14,698)			(17,888)			(20,695)			(28,390)			(23,669)
Provision for income taxes	—			56			27			13			17			23			13			9			9
Net loss	$	(11,004)		$	(17,001)		$	(16,171)		$	(14,379)		$	(14,715)		$	(17,911)		$	(20,708)		$	(28,399)		$	(23,678)
Net loss margin	(23.4)		%	(39.1)		%	(29.0)		%	(24.0)		%	(23.3)		%	(24.6)		%	(28.5)		%	(37.2)		%	(34.8)		%

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ThredUp Inc.
Adjusted EBITDA Reconciliation
(in thousands, except percentages, unaudited)
Three Months Ended	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022			September 30, 2022
Net loss	$	(11,004)		$	(17,001)		$	(16,171)		$	(14,379)		$	(14,715)		$	(17,911)		$	(20,708)		$	(28,399)		$	(23,678)
Interest expense	368			440			559			573			619			524			423			238			103
Provision for income taxes	—			56			27			13			17			23			13			9			9
Depreciation and amortization	1,425			1,713			2,038			1,861			2,248			3,008			3,271			3,407			3,539
Stock-based compensation expense	1,649			2,279			3,498			2,896			2,995			3,570			3,523			10,058			7,177
Acquisition and offering-related expenses	—			—			—			—			1,020			251			204			70			—
Restructuring charges	—			—			—			—			—			—			311			1,076			1,809
Change in fair value of convertible preferred stock warrant liability	89			285			930			—			—			—			—			—			—
Adjusted EBITDA loss	$	(7,473)		$	(12,228)		$	(9,119)		$	(9,036)		$	(7,816)		$	(10,535)		$	(12,963)		$	(13,541)		$	(11,041)
Adjusted EBITDA loss margin	(15.9)		%	(28.2)		%	(16.4)		%	(15.1)		%	(12.4)		%	(14.5)		%	(17.8)		%	(17.7)		%	(16.2)		%

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ThredUp Inc.
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses
(in thousands, except percentages, unaudited)
Three Months Ended	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022			September 30, 2022
Operations, product and technology	$	25,856		$	27,928		$	28,312		$	31,062		$	32,081		$	36,624		$	39,161		$	43,961		$	38,702
Marketing	10,614			10,252			15,446			15,957			16,941			15,281			16,978			19,640			14,752
Selling, general and administrative	6,891			7,802			10,638			10,999			12,569			14,608			14,664			17,380			15,232
Total operating expenses	43,361			45,982			54,396			58,018			61,591			66,513			70,803			80,981			68,686
Less: Stock-based compensation expense	(1,649)			(2,279)			(3,498)			(2,896)			(2,995)			(3,570)			(3,523)			(10,058)			(7,177)
Total non-GAAP operating expenses	$	41,712		$	43,703		$	50,898		$	55,122		$	58,596		$	62,943		$	67,280		$	70,923		$	61,509
Non-GAAP operating expenses % of revenue	88.9		%	100.6		%	91.4		%	91.9		%	92.6		%	86.4		%	92.6		%	92.8		%	90.5		%

ThredUp Inc.
Stock-Based Compensation Expense Details
(in thousands, unaudited)
Three Months Ended	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022
Operations, product and technology	$	987	$	1,167	$	1,350	$	984	$	1,024	$	883	$	1,392	$	3,970	$	2,480
Marketing	278		332		437		289		341		338		333		1,226		818
Selling, general and administrative	384		780		1,711		1,623		1,630		2,349		1,798		4,862		3,879
Total stock-based compensation expense	$	1,649	$	2,279	$	3,498	$	2,896	$	2,995	$	3,570	$	3,523	$	10,058	$	7,177

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ThredUp Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
	September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022
Assets:
Current assets:
Cash and cash equivalents	$	160,912	$	84,550	$	68,597	$	52,197	$	36,713
Marketable securities	100,762		121,277		115,189		96,326		86,501
Accounts receivable, net	1,895		4,136		2,971		3,368		3,175
Inventory, net	4,106		9,825		12,025		13,941		15,003
Other current assets	7,773		8,625		9,634		11,862		10,126
Total current assets	275,448		228,413		208,416		177,694		151,518
Operating lease right-of-use assets	20,455		39,340		42,937		49,420		46,760
Property and equipment, net	49,451		55,466		73,132		84,045		89,529
Goodwill	—		12,238		12,043		11,312		10,645
Intangible assets	—		13,854		12,942		11,522		10,242
Other assets	4,864		11,515		11,558		11,905		10,896
Total assets	$	350,218	$	360,826	$	361,028	$	345,898	$	319,590
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	8,407	$	13,336	$	19,529	$	16,183	$	8,642
Accrued and other current liabilities	46,427		45,253		50,970		48,590		53,365
Seller payable	18,306		19,125		20,640		22,564		18,690
Operating lease liabilities, current	2,757		3,931		4,433		5,014		4,931
Current portion of long-term debt	7,757		7,768		7,780		7,791		3,881
Total current liabilities	83,654		89,413		103,352		100,142		89,509
Operating lease liabilities, non-current	19,225		36,997		42,030		51,497		50,623
Long-term debt, net of current portion	29,478		27,559		25,634		23,705		26,859
Other non-current liabilities	2,187		1,123		2,324		2,625		2,904
Total liabilities	134,544		155,092		173,340		177,969		169,895
Commitments and contingencies
Stockholders’ equity:
Common stock	10		10		10		10		10
Additional paid-in capital	513,124		522,161		526,533		537,760		545,449
Accumulated other comprehensive loss	(28)		(1,094)		(2,804)		(5,391)		(7,636)
Accumulated deficit	(297,432)		(315,343)		(336,051)		(364,450)		(388,128)
Total stockholders’ equity	215,674		205,734		187,688		167,929		149,695
Total liabilities and stockholders’ equity	$	350,218	$	360,826	$	361,028	$	345,898	$	319,590

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ThredUp Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended	September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022
Cash flows from operating activities:
Net loss	$	(14,715)	$	(17,911)	$	(20,708)	$	(28,399)	$	(23,678)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,248		3,008		3,271		3,407		3,539
Stock-based compensation expense	2,995		3,570		3,523		10,058		7,177
Reduction in carrying amount of right-of-use assets	817		784		1,398		1,507		1,915
Other	589		574		481		657		271
Changes in operating assets and liabilities:
Accounts receivable, net	(350)		(1,117)		1,143		(461)		113
Inventory, net	256		(2,154)		(2,313)		(2,390)		(1,519)
Other current and non-current assets	(1,356)		(1,606)		(2,162)		(2,637)		3,067
Accounts payable	(2,142)		297		1,601		353		(4,954)
Accrued and other current liabilities	5,911		(4,831)		4,912		(4,163)		6,169
Seller payable	1,597		490		1,521		1,944		(3,845)
Operating lease liabilities	(892)		(729)		539		2,063		(206)
Other non-current liabilities	—		(1,262)		115		(95)		(153)
Net cash used in operating activities	(5,042)		(20,887)		(6,679)		(18,156)		(12,104)
Cash flows from investing activities:
Purchases of marketable securities	(45,297)		(22,502)		—		(3,475)		—
Maturities of marketable securities	1,600		1,200		4,726		21,568		9,536
Acquisition of business, net of cash acquired	—		(23,581)		—		—		—
Purchases of non-marketable equity investment	—		(3,750)		—		—		—
Purchases of property and equipment, net	(6,208)		(4,621)		(12,638)		(14,945)		(11,733)
Net cash provided by (used in) investing activities	(49,905)		(53,254)		(7,912)		3,148		(2,197)
Cash flows from financing activities:
Proceeds from debt, net of discount	—		—		—		—		491
Repayment of debt	(2,000)		(2,000)		(2,000)		(2,000)		(1,333)
Proceeds from issuance of Class A common stock upon initial public offering and the follow-on offering, net of underwriting discounts and commissions	46,621		—		—		—		—
Payment of costs for the initial public offering and follow-on offering	(618)		(478)		—		—		—
Proceeds from exercise of stock options and employee stock purchase plan	948		2,724		965		2,182		731
Tax withholding related to vesting of restricted stock units	—		(318)		(156)		(1,323)		(479)
Net cash provided by (used in) financing activities	44,951		(72)		(1,191)		(1,141)		(590)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—		(64)		(172)		(349)		(397)
Net change in cash, cash equivalents and restricted cash	(9,996)		(74,277)		(15,954)		(16,498)		(15,288)
Cash, cash equivalents and restricted cash, beginning of period	176,113		166,117		91,840		75,886		59,388
Cash, cash equivalents and restricted cash, end of period	$	166,117	$	91,840	$	75,886	$	59,388	$	44,100

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Investors

ir@thredup.com

Media

media@thredup.com

About thredUP

thredUP is transforming resale with technology and a mission to inspire a new generation of consumers to think secondhand first. By making it easy to buy and sell secondhand, thredUP has become one of the world's largest online resale platforms for women's and kids' apparel, shoes and accessories. Sellers love thredUP because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price. Our proprietary operating platform is the foundation for our managed marketplace and consists of distributed processing infrastructure, proprietary software and systems and data science expertise. With thredUP's Resale-as-a-Service, some of the world's leading brands and retailers are leveraging our platform to deliver customizable, scalable resale experiences to their customers. thredUP has processed over 137 million unique secondhand items from 55,000 brands across 100 categories. By extending the life cycle of clothing, thredUP is changing the way consumers shop and ushering in a more sustainable future for the fashion industry.

Forward-Looking Statements

This financial supplement 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 forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this financial supplement include, but are not limited to, guidance on financial results for the fourth quarter and full year of 2022; statements about future operating results and our long term growth; the momentum of our business; the growth rates in the markets in which we compete; the impact of the COVID-19 pandemic and its varied social and macroeconomic consequences, inflationary pressures, increased interest rates and general global economic uncertainty on consumer behavior and our business; our investments in technology and infrastructure; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions, investments or restructuring activities; the success and expansion of our RaaS® model and the timing and plans for future RaaS® clients; and our ability to attract new Active Buyers.

The forward-looking statements contained in this financial supplement are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and in our Quarterly Report on Form 10-Q that will be filed following this financial supplement. The forward-looking statements in this financial supplement are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing thredUP’s views as of any date subsequent to the date of this financial supplement.

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Additional information regarding these and other factors that could affect thredUP's results is included in thredUP’s SEC filings, which may be obtained by visiting our Investor Relations website at ir.thredup.com or the SEC's website at www.sec.gov.

Operating Metrics

An Active Buyer is a thredUP buyer who has made at least one purchase in the last twelve months. A thredUP buyer is a customer who has created an account or purchased in our marketplaces, including through our RaaS® clients. A thredUP buyer is identified by a unique email address and a single person could have multiple thredUP accounts and count as multiple Active Buyers.

Orders are defined as the total number of orders placed by buyers across our marketplaces, including through our RaaS® clients, in a given period, net of cancellations.

Non-GAAP Financial Measures

This financial supplement and the accompanying tables contain non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA margin. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes. We believe that Adjusted EBITDA and Adjusted EBITDA margin, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. Adjusted EBITDA and Adjusted EBITDA margin are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP measures used by other companies.

A reconciliation is provided above for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. We calculate Adjusted EBITDA as net loss adjusted to exclude, where applicable in a given period, depreciation and amortization, stock-based compensation expense, interest expense, acquisition-related expenses, restructuring charges, change in fair value of convertible preferred stock warrant liability and provision for income taxes.

Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA to net loss. thredUP is not providing a quantitative reconciliation of forward-looking guidance of Adjusted EBITDA to net loss because certain items are out of thredUP’s control or cannot be reasonably predicted. Historically, these items have included, but are not limited to, depreciation and amortization, stock-based compensation expense, change in fair value of convertible preferred stock warrant liability and provision for income taxes. Accordingly, a reconciliation for Adjusted EBITDA in order to calculate forward-looking Adjusted EBITDA margin is not available without unreasonable effort. However, for the fourth quarter of 2022 and full year 2022, depreciation and amortization is expected to be $3.6 million and $13.9 million, respectively. In addition, for the fourth quarter of 2022 and full year 2022, stock-based compensation expense is expected to be $6.2 million and $27 million, respectively. These items are uncertain, depend on various factors, and could result in projected net loss being materially less than is indicated by the currently estimated Adjusted EBITDA margin.

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