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

Exhibit 99.2

ThredUp Inc.

Fourth Quarter and Full Year 2022 Supplemental Financials

Key Financial Metrics for the Quarter

•Revenue of $71.3 million

◦vs. $72.9 million in 4Q21

◦Decline of 2.1% YoY

•Gross profit of $45.0 million

◦vs. $48.2 million in 4Q21

◦Decline of 6.7% YoY

•Gross margin of 63.1%

◦vs. 66.1% in 4Q21

•GAAP net loss attributable to common stockholders of $19.5 million

◦vs. net loss attributable to common stockholders of $17.9 million in 4Q21

•Adjusted EBITDA loss of $5.8 million

◦vs. loss of $10.5 million in 4Q21

•Adjusted EBITDA loss margin of 8.2%

◦vs. loss margin of 14.5% in 4Q21

•Cash, cash equivalents, restricted cash and short-term marketable securities were $111.0 million at the quarter end

•Total quarter Active Buyers of 1.651 million

◦vs. 1.691 million in 4Q21

◦Decline of 2.4% YoY

•Total Orders of 1.545 million

◦vs. 1.683 million in 4Q21

◦Decline of 8.2% YoY

Key Financial Metrics for the Full Year 2022

•Revenue of $288.4 million

◦vs. $251.8 million in FY 2021

◦Growth of 14.5% YoY

•Gross profit of $192.3 million

◦vs. $178.1 million in FY 2021

◦Growth of 8.0% YoY

•Gross margin of 66.7%

◦vs. 70.7% in FY 2021

•GAAP net loss attributable to common stockholders of $92.3 million

◦vs. net loss attributable to common stockholders of $63.2 million in FY 2021

•Adjusted EBITDA loss of $43.4 million

◦vs. loss of $36.5 million in FY 2021

•Adjusted EBITDA loss margin of 15.0%

◦vs. loss margin of 14.5% in FY 2021

•Total Orders of 6.507 million

◦vs. 5.328 million in FY2021

◦Growth of 22.1% YoY

Conference Call and Webcast

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

Financial Outlook

For first quarter 2023, thredUP expects:

•Revenue in the range of $71 million to $73 million

•Gross margin in the range of 66.0% to 68.0%

•Adjusted EBITDA loss margin in the range of 12.0% to 10.0%

•Depreciation and amortization of approximately $4.3 million

•Stock-based compensation of approximately $8.8 million

•Weighted-average shares of approximately 102 million

For fiscal year 2023, thredUP expects:

•Revenue in the range of $310 million to $320 million

•Gross margin in the range of 66.0% to 68.0%

•Adjusted EBITDA loss margin in the range of 8.0% to 6.0%

•Depreciation and amortization of approximately $19.9 million

•Stock-based compensation of approximately $38.8 million

•Weighted-average shares of approximately 105 million

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ThredUp Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages, unaudited)
Three Months Ended	March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022			September 30, 2022			December 31, 2022
Revenue:
Consignment	$	44,688		$	48,597		$	48,071		$	44,758		$	47,435		$	48,536		$	41,553		$	37,470
Product	10,992			11,362			15,203			28,121			25,260			27,885			26,392			33,848
Total revenue	55,680			59,959			63,274			72,879			72,695			76,421			67,945			71,318
Cost of revenue:
Consignment	10,832			10,687			10,080			10,257			10,049			10,218			9,087			7,661
Product	5,130			5,140			7,100			14,434			12,418			13,555			14,362			18,691
Total cost of revenue	15,962			15,827			17,180			24,691			22,467			23,773			23,449			26,352
Gross profit	39,718			44,132			46,094			48,188			50,228			52,648			44,496			44,966
Gross margin % of revenue	71.3		%	73.6		%	72.8		%	66.1		%	69.1		%	68.9		%	65.5		%	63.1		%
Operating expenses:
Operations, product and technology	28,312			31,062			32,081			36,624			39,161			43,961			38,702			33,818
Marketing	15,446			15,957			16,941			15,281			16,978			19,640			14,752			12,999
Sales, general and administrative	10,638			10,999			12,569			14,608			14,664			17,380			15,232			14,538
Total operating expenses	54,396			58,018			61,591			66,513			70,803			80,981			68,686			61,355
Operating expenses % of revenue	97.7		%	96.8		%	97.3		%	91.3		%	97.4		%	106.0		%	101.1		%	86.0		%
Operating loss	(14,678)			(13,886)			(15,497)			(18,325)			(20,575)			(28,333)			(24,190)			(16,389)
Operating loss % of revenue	(26.4)		%	(23.2)		%	(24.5)		%	(25.1)		%	(28.3)		%	(37.1)		%	(35.6)		%	(23.0)		%
Interest and other expense (income), net	1,466			480			(799)			(437)			120			57			(521)			3,106
Loss before provision for income taxes	(16,144)			(14,366)			(14,698)			(17,888)			(20,695)			(28,390)			(23,669)			(19,495)
Provision for income taxes	27			13			17			23			13			9			9			4
Net loss attributable to common stockholders	$	(16,171)		$	(14,379)		$	(14,715)		$	(17,911)		$	(20,708)		$	(28,399)		$	(23,678)		$	(19,499)
Net loss attributable to common stockholders margin	(29.0)		%	(24.0)		%	(23.3)		%	(24.6)		%	(28.5)		%	(37.2)		%	(34.8)		%	(27.3)		%

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ThredUp Inc.
Adjusted EBITDA Reconciliation
(in thousands, except percentages, unaudited)
Three Months Ended	March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022			September 30, 2022			December 31, 2022
GAAP net loss attributable to common stockholders, as reported	$	(16,171)		$	(14,379)		$	(14,715)		$	(17,911)		$	(20,708)		$	(28,399)		$	(23,678)		$	(19,499)
Interest expense	559			573			619			524			423			238			103			41
Provision for income taxes	27			13			17			23			13			9			9			4
Depreciation and amortization	2,038			1,861			2,248			3,008			3,271			3,407			3,539			3,816
Stock-based compensation expense	3,498			2,896			2,995			3,570			3,523			10,058			7,177			6,059
Acquisition and offering-related expenses	—			—			1,020			251			204			70			—			—
Restructuring charges	—			—			—			—			311			1,076			1,809			(14)
Impairment of non-marketable equity investment	—			—			—			—			—			—			—			3,750
Change in fair value of convertible preferred stock warrant liability	930			—			—			—			—			—			—			—
Non-GAAP adjusted EBITDA loss	$	(9,119)		$	(9,036)		$	(7,816)		$	(10,535)		$	(12,963)		$	(13,541)		$	(11,041)		$	(5,843)
Non-GAAP adjusted EBITDA loss margin	(16.4)		%	(15.1)		%	(12.4)		%	(14.5)		%	(17.8)		%	(17.7)		%	(16.2)		%	(8.2)		%

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ThredUp Inc.
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses
(in thousands, except percentages, unaudited)
Three Months Ended	March 31, 2021			June 30, 2021			September 30, 2021			December 31, 2021			March 31, 2022			June 30, 2022			September 30, 2022			December 31, 2022
Operations, product and technology	$	28,312		$	31,062		$	32,081		$	36,624		$	39,161		$	43,961		$	38,702		$	33,818
Marketing	15,446			15,957			16,941			15,281			16,978			19,640			14,752			12,999
Selling, general and administrative	10,638			10,999			12,569			14,608			14,664			17,380			15,232			14,538
Total operating expenses	54,396			58,018			61,591			66,513			70,803			80,981			68,686			61,355
Less: Stock-based compensation expense	(3,498)			(2,896)			(2,995)			(3,570)			(3,523)			(10,058)			(7,177)			(6,059)
Total non-GAAP adjusted operating expenses	$	50,898		$	55,122		$	58,596		$	62,943		$	67,280		$	70,923		$	61,509		$	55,296
Non-GAAP adjusted operating expenses % of revenue	91.4		%	91.9		%	92.6		%	86.4		%	92.6		%	92.8		%	90.5		%	77.5		%

ThredUp Inc.
Stock-Based Compensation Expense Details
(in thousands, unaudited)
Three Months Ended	March 31, 2021		June 30, 2021		September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022
Operations, product and technology	$	1,350	$	984	$	1,024	$	883	$	1,392	$	3,970	$	2,480	$	2,193
Marketing	437		289		341		338		333		1,226		818		767
Selling, general and administrative	1,711		1,623		1,630		2,349		1,798		4,862		3,879		3,099
Total stock-based compensation expense	$	3,498	$	2,896	$	2,995	$	3,570	$	3,523	$	10,058	$	7,177	$	6,059

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ThredUp Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
	March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022
Assets:
Current assets:
Cash and cash equivalents	$	68,597	$	52,197	$	36,713	$	38,029
Marketable securities	115,189		96,326		86,501		66,902
Accounts receivable, net	2,971		3,368		3,175		4,669
Inventory	12,025		13,941		15,003		17,519
Other current assets	9,634		11,862		10,126		7,076
Total current assets	208,416		177,694		151,518		134,195
Operating lease right-of-use assets	42,937		49,420		46,760		46,153
Property and equipment, net	73,132		84,045		89,529		92,482
Goodwill	12,043		11,312		10,645		11,592
Intangible assets	12,942		11,522		10,242		10,499
Other assets	11,558		11,905		10,896		7,027
Total assets	$	361,028	$	345,898	$	319,590	$	301,948
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	19,529	$	16,183	$	8,642	$	7,800
Accrued and other current liabilities	50,970		48,590		53,365		50,155
Seller payable	20,640		22,564		18,690		16,166
Operating lease liabilities, current	4,433		5,014		4,931		6,413
Current portion of long-term debt	7,780		7,791		3,881		3,879
Total current liabilities	103,352		100,142		89,509		84,413
Operating lease liabilities, non-current	42,030		51,497		50,623		48,727
Long-term debt, net of current portion	25,634		23,705		26,859		25,788
Other non-current liabilities	2,324		2,625		2,904		3,019
Total liabilities	173,340		177,969		169,895		161,947
Commitments and contingencies
Stockholders’ equity:
Common stock	10		10		10		10
Additional paid-in capital	526,533		537,760		545,449		551,852
Accumulated other comprehensive loss	(2,804)		(5,391)		(7,636)		(4,234)
Accumulated deficit	(336,051)		(364,450)		(388,128)		(407,627)
Total stockholders’ equity	187,688		167,929		149,695		140,001
Total liabilities and stockholders’ equity	$	361,028	$	345,898	$	319,590	$	301,948

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ThredUp Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended	March 31, 2022		June 30, 2022		September 30, 2022		December 31, 2022
Cash flows from operating activities:
Net loss attributable to common stockholders	$	(20,708)	$	(28,399)	$	(23,678)	$	(19,499)
Adjustments to reconcile net loss attributable to common stockholders to net cash used in operating activities:
Depreciation and amortization	3,271		3,407		3,539		3,816
Stock-based compensation expense	3,523		10,058		7,177		6,059
Reduction in carrying amount of right-of-use assets	1,398		1,507		1,915		1,653
Other	481		657		271		4,184
Changes in operating assets and liabilities:
Accounts receivable, net	1,143		(461)		113		(1,325)
Inventory	(2,313)		(2,390)		(1,519)		(1,664)
Other current and non-current assets	(2,162)		(2,637)		3,067		2,625
Accounts payable	1,601		353		(4,954)		(985)
Accrued and other current liabilities	4,912		(4,163)		6,169		(5,166)
Seller payable	1,521		1,944		(3,845)		(2,565)
Operating lease liabilities	539		2,063		(206)		(1,472)
Other non-current liabilities	115		(95)		(153)		(827)
Net cash used in operating activities	(6,679)		(18,156)		(12,104)		(15,166)
Cash flows from investing activities:
Purchases of marketable securities	—		(3,475)		—		—
Maturities of marketable securities	4,726		21,568		9,536		19,820
Purchases of property and equipment, net	(12,638)		(14,945)		(11,733)		(3,935)
Net cash provided by (used in) investing activities	(7,912)		3,148		(2,197)		15,885
Cash flows from financing activities:
Proceeds from debt, net of discount	—		—		491		(100)
Repayment of debt	(2,000)		(2,000)		(1,333)		(1,000)
Proceeds from exercise of stock options and employee stock purchase plan	965		2,182		731		324
Tax withholding related to vesting of restricted stock units	(156)		(1,323)		(479)		(238)
Net cash used in financing activities	(1,191)		(1,141)		(590)		(1,014)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(172)		(349)		(397)		246
Net change in cash, cash equivalents and restricted cash	(15,954)		(16,498)		(15,288)		(49)
Cash, cash equivalents and restricted cash, beginning of period	91,840		75,886		59,388		44,100
Cash, cash equivalents and restricted cash, end of period	$	75,886	$	59,388	$	44,100	$	44,051

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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 first quarter and full year of 2023; 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.

More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. 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, Adjusted EBITDA margin, and Adjusted operating expenses. In addition to our results determined in accordance with GAAP, we believe that Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted operating expenses, non-GAAP measures, are useful in evaluating our operating performance. We use Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted operating expenses 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, Adjusted EBITDA margin, and Adjusted operating expenses, 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, Adjusted EBITDA margin, and Adjusted operating expenses 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 attributable to common stockholders and Adjusted operating expenses to reported operating expenses, the most directly comparable financial measures stated in accordance with GAAP. We calculate Adjusted EBITDA as net loss attributable to common stockholders adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, impairment of non-marketable equity investment, restructuring charges, interest expense, acquisition-related expenses, provision for income taxes, change in fair value of convertible preferred stock warrant liability. We calculate Adjusted operating expenses as operating expenses adjusted to exclude stock-based compensation expense.

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Investors are encouraged to review our results determined in accordance with GAAP and the reconciliation of Adjusted EBITDA to net loss attributable to common stockholders and Adjusted operating expenses to operating expenses. thredUP is not providing a quantitative reconciliation of forward-looking guidance of Adjusted EBITDA to net loss attributable to common stockholders or Adjusted operating expenses to operating expenses 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 first quarter of 2023 and full year 2023, depreciation and amortization is expected to be $4.3 million and $19.9 million, respectively. In addition, for the first quarter of 2023 and full year 2023, stock-based compensation expense is expected to be $8.8 million and $38.8 million, respectively. These items are uncertain, depend on various factors, and could result in projected net loss attributable to common stockholders being materially less than is indicated by the currently estimated Adjusted EBITDA margin.

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