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DATE

Monday, March 2, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer and Co-Founder — James G. Reinhart
  • Chief Financial Officer — Graden Sean Sobers
  • Head of Investor Relations — Lauren Frasch

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TAKEAWAYS

  • Revenue -- $79.7 million for the quarter, up 18.5% year over year, driven by investments in new buyer acquisition and increased customer engagement.
  • Gross Margin -- 79.6% for the quarter, an 80 basis point decline from the prior year, attributed to growth in the premium supply offering.
  • Adjusted EBITDA -- $2.9 million, or 3.7% of revenue for the quarter, representing a 370 basis point decline from last year, as more investment was done proactively to set up for 2026.
  • Active Buyers -- 1,700,000 for the trailing twelve months, a 29.5% increase year over year, reflecting record buyer engagement on the platform.
  • New Buyer Acquisition -- 57% growth year over year for the quarter, indicating continued success in customer acquisition strategy.
  • Orders -- 1,600,000 for the quarter, representing 27.3% growth from the previous year.
  • Full-Year Revenue -- $310.8 million, a 20% increase year over year, led by platform scale and expansion of premium offerings.
  • Full-Year Adjusted EBITDA -- $14 million, or 4.4% of revenue, achieved in every quarter and marking positive free cash flow for the full year.
  • Supply Volume -- 21,100,000 items processed for the year, up more than 17%, supported by a 36% rise in Clean Out Kit requests driven by premium kit offerings.
  • Consignment Model Transition -- Over 90% of the business now operates on the consignment model, completing a multiyear transition and eliminating former accounting headwinds.
  • Premium Kit Supply -- Accounted for 17% of 2025 supply, supporting higher average selling prices and attracting higher-value buyers.
  • TikTok Shop Clean Out Bags -- Over 100,000 sold in January, with 97% purchased by first-time suppliers on the platform.
  • Direct Listing Beta -- Sellers in the beta listed ten times more items than initial estimates, with average selling prices exceeding $70 and 50% of new listings originating from bulk import features.
  • Full-Year Cash Flow -- Achieved positive annual free cash flow for the first time, following $10.5 million in capital expenditures.
  • Cash Position -- Ended the year with $53.1 million in cash and securities, compared to $528 million at the start of the period.
  • 2026 Q1 Guidance -- Revenue projected between $79.5 million and $80.5 million, with expected 12% growth at midpoint, gross margin between 78% and 79%, and adjusted EBITDA around 3% of revenue.
  • 2026 Full-Year Guidance -- Revenue expected in the $349 million to $355 million range, representing 13% growth at midpoint; gross margin of 78%-79%; adjusted EBITDA targeted at 6% of revenue, indicating over 150 basis points of margin expansion.
  • Marketing and Expense Leverage -- Management stated, "marketing will be at a similar percent of revenue for the year," with targeted margin leverage coming from SG&A and operations (OPNT) lines.
  • SG&A and OPNT Cost Structure -- CFO Graden Sean Sobers stated, "SG&A is pretty easy because it is mostly—almost like 97%—what you would consider fixed. The only piece that goes through SG&A is the payment processor fees, which are about 3%. And then OPNT, it is more like 60/40 variable/fixed. Sorry—40/60 variable/fixed."
  • AI Adoption -- AI-driven product enhancements have improved site search, discovery, measurement, customer satisfaction, and operational efficiencies, notably reducing human escalation rates in customer service via the Dottie agent.

SUMMARY

Management confirmed ThredUp (TDUP 7.77%)'s first year of positive annual free cash flow, with every quarter of 2025 delivering adjusted EBITDA profitability. The company completed its transition to a fully consignment-based model, which now comprises over 90% of the business and streamlines gross margin and growth predictability. Strategic investments in customer acquisition and innovation led to a 57% surge in new buyers and a 30% increase in active buyers across the trailing year. Bulk import and direct listing initiatives demonstrated significantly higher seller engagement, with average selling prices above $70, while TikTok Shop activation unlocked rapid new-seller acquisition. The 2026 guidance signals double-digit top-line growth, planned gross margin stability, and clear priorities for multi-year LTV expansion and further EBITDA margin improvement.

  • AI advancements underpin cost efficiency by driving customer issue resolution and platform personalization, with management emphasizing plans to embed agentic AI deeper into the buyer journey.
  • Sellers using the bulk import feature currently account for half of all new peer-to-peer listings, notably aiding platform consolidation and market share capture from competitors.
  • Premium product offerings and the Q4 seasonal Holiday Shop contributed to rising average selling prices and attracted more affluent customers, with management highlighting 17%-18% of business mix attributed to premium kits by year-end.
  • First quarter of 2026 is expected to be the lowest for both revenue and EBITDA, with sequential acceleration projected into the second quarter and beyond based on normal business cadence.
  • Company is actively leveraging viral marketing channels such as TikTok affiliates and influencers for seller acquisition, indicating early success in digital advocacy strategies.
  • Management stated, you typically see acceleration Q1 to Q2 to Q3, and then the seasonal step back in Q4. That was exactly the pattern in 2025. And even prior to going public, that was a very common pattern for the business. I think we are just getting back to that normal cadence. framing 2025 as the baseline for future seasonal patterns.
  • Guidance depends on reinvesting any outperformance above targets into further growth levers, maintaining disciplined expense policy.

INDUSTRY GLOSSARY

  • Consignment Model: An inventory model where the platform sells goods on behalf of third-party owners, recording revenue only when items are sold and typically not holding owned inventory risk.
  • Clean Out Kit: A branded package enabling sellers to send apparel to ThredUp Inc. for resale, processed under either regular or premium terms via consignment.
  • Retail-as-a-Service (RaaS): Partner-branded resale initiatives where ThredUp Inc. supplies logistics, inventory processing, and operations support for external fashion brands' resale channels.
  • LTV-to-CAC Ratio: A key metric comparing the lifetime value of a customer (LTV) to the cost of acquiring that customer (CAC), used to assess marketing efficiency and profitability.
  • OPNT: Refers to operations-related expense lines in the company's financials, encompassing costs attributed to fulfillment, logistics, and platform support.
  • Agentic AI: Artificial intelligence that can autonomously perform tasks and resolve customer inquiries without human intervention, including end-to-end customer support functions.

Full Conference Call Transcript

Operator: Good afternoon, ladies and gentlemen, and welcome to the ThredUp Inc. Fourth Quarter 2025 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Monday, March 2, 2026. I would now like to turn the conference over to Lauren Frasch, Head of Investor Relations. Please go ahead.

Lauren Frasch: Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp Inc.'s fourth quarter and 2025 financial results. With me are James G. Reinhart, ThredUp Inc.'s CEO and Co-Founder, and Graden Sean Sobers, 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 the call will be available on the site shortly. Before we begin, I would 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 supplemental financial information, which are distributed and available to the public through our Investor Relations website located at ir.thredup.com. Now I would like to turn the call over to James. James?

James G. Reinhart: Good afternoon, everyone. I am James Reinhart, CEO and Co-Founder of ThredUp Inc. Thank you for joining our fourth quarter earnings call. Today, we will discuss our financial results for the fourth quarter, along with a review of our performance for the full fiscal year 2025. I will start by reviewing highlights of our first full year back as a streamlined U.S.-focused business and how this focus has allowed us to drive record gross margins and more predictable growth. I will then discuss our product innovation wins in 2025, and how these investments in our marketplace can translate into compounding advantages in 2026.

I will also provide our perspective on the current macro environment, and how we believe our strategy uniquely positions our marketplace model to thrive as consumers continue to look for both value and delight as they allocate their discretionary spending budgets. Finally, I will turn it over to Graden Sean Sobers, our Chief Financial Officer, to walk through our financial results in detail and provide our initial guidance for Q1 and the full year 2026. We will conclude the call with a question-and-answer session.

First, to the results. We are pleased to report that Q4 revenue grew 18.5% year over year, while gross margin was 79.6%. Adjusted EBITDA was 3.7% of revenue. In particular, our top-line outperformance was driven by our deliberate investment in customer acquisition and new listings. This drove a noticeable surge in both new buyers and customer engagement. To that end, we are pleased to report that new buyer acquisition increased 57% year over year while active buyers for the trailing twelve months were up 30% year over year.

For the full year 2025, our performance was a testament to the durability and scalability of the infrastructure we have built over the last decade, and the fundamental strength of our marketplace model. We delivered record revenue of $310.8 million, representing 20% year-over-year growth, while maintaining our premium gross margin profile at 79.4%. These results were driven by a record 1,700,000 active buyers, a 30% increase over the prior year, and a record 21,100,000 items processed, representing volume growth of more than 17%. Importantly, this operational scale combined with expense discipline allowed us to generate $14 million in adjusted EBITDA, or 4.4% of revenue.

I am especially proud of the underlying consistency we maintained to achieve this, delivering adjusted EBITDA every single quarter over the past two years and delivering positive free cash flow for the full year in 2025.

As I look back on the past twelve months, I would characterize 2025 as a year where we successfully returned to the core fundamentals of our marketplace, and then rapidly built on top of this foundation. This was our first full year operating as a dedicated U.S.-focused enterprise, without the complexities of our former European operations. It also marked the completion of our multiyear accounting transition to a fully consignment-based model, with more than 90% of our business now on consignment. By removing these historical headwinds and accounting transitions, we have cleared the path for the higher-margin, scalable growth you see today. I believe this establishes the financial baseline for our business moving forward: predictable growth, an exceptional gross margin profile, and the operating leverage required to generate consistent free cash flow.

In addition, 2025 demonstrated the unique defensive advantages of our marketplace model. During the large tariff disruptions of 2025, we experienced little impact given our supply is held on consignment and U.S.-sourced. We were able to launch new ways to grow supply, first with premium listings at the beginning of the year, and following up with direct listings at the end of the year. These innovations expand the types of customers we can attract to our business over time. Given our legacy of investments in infrastructure, automation, and technology, we rapidly took advantage of emerging AI models to improve product search, discovery, ad buying, recommendations, photography, measurement, and flaw detection.

I honestly cannot remember another time when the business took such a giant leap forward on behalf of the customer. With the surge of innovation across our business, we then executed a well-received rebrand in the fall to better position ThredUp Inc. for years to come as a marketplace for fashion forever.

Before we dive deeper into our strategy for 2026, I want to address the broader consumer landscape. I have said for a number of quarters that I think the American consumer may be weaker than headline data would appear to indicate, and that recent data validates some of this instinct. In 2025, job growth was anemic, with the BLS revising numbers down by the largest factor in twenty years. At the same time, the New York Fed confirmed that nearly 90% of the 2025 tariff burden fell directly on firms and consumers.

This is on top of an affordability crisis where nondiscretionary costs like rent and insurance have structurally reset at higher levels, effectively shrinking the wallet share left over for apparel and other discretionary goods. All this taken together, I think it is fair to say that the macroeconomic environment for discretionary spending remains uncertain, and the American consumer is understandably approaching the year with a degree of caution.

However, we believe these circumstances allow us to offer a differentiated approach. While traditional apparel retailers may face headwinds in a value-driven environment, our managed marketplace is uniquely built to capture upside demand as consumers prioritize both the stretch of their dollar and the liquidity in their closets. As we enter 2026, our focus at ThredUp Inc. is to build on our past toward sustained profitable growth by enhancing the structural drivers of our marketplace flywheel: full-funnel buyer growth, high-quality supply, and AI-driven innovation that meaningfully reduces friction in shopping secondhand, all while maintaining our expense discipline.

This strategy is threefold. First, we are focused on full-funnel growth and early lifecycle engagement. Our success in 2025 was fueled by record-breaking customer acquisition, capped off by a 57% year-over-year surge in new customers during Q4. This momentum proves that our brand and value proposition are resonating at increased scale. As we move into 2026, our priority is evolving from pure acquisition to deepening our relationship with these new cohorts. Our LTV-to-CAC ratio reached all-time highs in 2025, but we think there is more to do to build multiyear LTV expansion. We recognize that early lifecycle engagement is our highest-leverage growth driver.

By prioritizing retention alongside acquisition, we are building a more predictive, high-LTV buyer base that fuels our long-term growth engine.

Second, in 2025, we proved that we could scale supply volume meaningfully, with kit requests up 36% year over year. This was not just about quantity; it was about obtaining the right supply, driven by a few key initiatives. A primary driver of this increase can be attributed to our premium kit offering. We launched this product in early 2025. It has scaled into a material contributor to our supply, representing 17% of supply for the year. We will continue to invest in expanding our premium kit offering through new channels, as well as evolving the sets of incentives we offer customers. Specifically, we developed a supply approach for capitalizing on the momentum of TikTok Shop.

While selling unique secondhand SKUs on TikTok Shop is challenging, our Clean Out Kits—premium, regular, or otherwise—can be SKUed and sold effectively. In January, we sold over 100,000 Clean Out bags through TikTok Shop, with 97% of these orders being brand-new suppliers on our platform. In light of this early success, we are now actively experimenting in TikTok Live and creator affiliates to capitalize and convert these new sellers into long-term customers.

Our Retail-as-a-Service footprint has expanded to include a handful of beloved brands since our last call, including Lands' End, Steve Madden, and Betsey Johnson. We continue to see RaaS as a broad, ever-extendable channel for adding high-quality supply. We are now several months into our direct listing beta. I mentioned on our last call that we would be very deliberate in how we rolled out this initiative to meet a market need. Thus, we are focused on growing the business by approximately 10% per week as we observe and learn. There are now thousands of buyers and sellers involved in our beta, providing rich data to test and learn from.

Some of the early data has confirmed our hypotheses, while other behaviors have surprised us. Sellers who choose to take advantage of direct listings are listing 10 times more items than we expected. This suggests there is enormous closet share left for us to take as we provide more ways for our customers to monetize the full depth of their wardrobes. Sell-through has been as expected, while the average selling price is much higher, more than $70. We believe that scaling these higher ASP listings will allow us to further capture a more premium shopper, consistent with the launch of our premium kits last year.

Customers have also reacted very positively to the seamless nature of using our infrastructure to handle returns, giving them confidence to shop direct listings when they might not have previously done so. We are continuing to roll out new updates to the experience weekly. Most recently, we enabled the bulk import of listings. This way, customers can move their closets over more easily from competitor sites. Already 50% of new listings are now coming from bulk import, which we think is one indicator that we are building the right tools for sellers to consolidate their selling on ThredUp Inc.

We launched direct messaging so sellers could communicate, and just this week, an offer function so buyers and sellers can more easily find a market-clearing price without ThredUp Inc.'s direct involvement.

Finally, we are leveraging AI to build a structural advantage across our entire business. Our goal is to use technology to remove the friction inherent in resale, both for our customers but also for our bottom line. Following the launch of our AI-powered shopping suite last year, we doubled down with features like the Daily Edit and the Trend Report. These tools use proprietary embeddings to move us toward a “segment of one,” where the marketplace feels custom built for every individual. Looking ahead, we are going to use agentic AI to transform the ThredUp Inc. experience into a much more personalized, end-to-end discovery and shopping journey.

We are also redefining the post-purchase experience with Dottie, our AI customer service agent. In a relatively short amount of time, Dottie has evolved from a simple question-and-answer tool into an agentic engine capable of facilitating the resolution of customer issues that previously required representatives. By reducing the human escalation rate of customer service inquiries, Dottie allows our team to focus on higher-value interactions and more nuanced customer requests. More importantly, a shift to instant resolution has driven a meaningful increase in our customer satisfaction scores, directly supporting our overall customer growth goals.

By embedding AI into everything from discovery to service, we are building a marketplace that is not only more enjoyable for the consumer, but structurally more profitable to operate.

In closing, as we look ahead, ThredUp Inc. is transitioning from a period of recovery to one of compounding progress. The data-driven infrastructure we have built, supported by our commitment to operational excellence and our foundational AI architecture, is transforming our marketplace into a more efficient, scalable, and personalized ecosystem than ever before. We have often said that marketplaces are hard to build, but when you get the flywheel spinning, they are very hard to stop. By continuing to redefine the buyer experience with emerging AI tools, while expanding our addressable market through supply innovation, we are demonstrating that our model could scale more widely and effectively over time.

I am confident in our team's execution as we work toward our goal of making secondhand the preferred choice for consumers everywhere, and building a generation-defining company that endures. With that, I will turn it over to Sean to talk through the financials in more detail.

Graden Sean Sobers: Thanks, James. I will begin with an overview of our results and follow up with guidance for the first quarter and full year of 2026. I will discuss non-GAAP results throughout my remarks. Our GAAP financials and a reconciliation between our GAAP and non-GAAP measures are found in our earnings release, supplemental financials, and our 10-K filing. We are extremely proud of our Q4 and 2025 results, in which we exceeded our internal expectations for revenue, gross margins, and adjusted EBITDA. For the year, we delivered 20% revenue growth, adjusted EBITDA profitability, and our first year of positive total cash flow and set company records for revenue, new buyer acquisition, and total active buyers.

For Q4 2025, revenue totaled $79.7 million, an increase of 18.5% year over year. Our performance was driven by investments into new buyer acquisition, continued LTV-to-CAC efficiencies, and inbound processing that drove our marketplace flywheel. These drivers resulted in another strong quarter for new buyer acquisition, with new buyers up 57% year over year. We also benefited from repeat purchases by new buyers acquired earlier in the year as well as reduced churn. We finished the quarter with a record 1,700,000 active buyers for the trailing twelve months, up 29.5% over last year, while we had 1,600,000 orders in the fourth quarter, up 27.3%.

For Q4 2025, gross margin was 79.6%, an 80 basis point decrease versus the same quarter last year. Our outperformance versus our expectations was driven by higher selling prices due to the growth in our premium supply offering. Adjusted EBITDA was $2.9 million, or 3.7% of revenue, for Q4 2025, outperforming our internal expectations. Our Q4 result represented a 370 basis point decline over last year when our revenue outperformance occurred later in the quarter and we were unable to accelerate our spend efficiently to keep pace with our top-line performance. This year, as we gained confidence in our ability to drive future growth, we were pleased to be able to appropriately invest to better set us up for 2026.

Turning to the balance sheet. We began the year with $528 million in cash and securities and ended the year with $53.1 million. We are proud to have reached a major milestone for the company in 2025, generating our first year of annual free cash flow, having invested $10.5 million on CapEx in 2025. We continue to expect similar levels of CapEx in 2026 with expanding free cash flow.

Now I would like to provide a bit of context for our guidance. Our 2025 strategy represented a return to our marketplace fundamentals: disciplined investment in active buyer growth, supply processing, and product innovation, while maintaining rigorous expense control and leveraging our legacy investments. This approach generated success beyond our expectations. In 2026, our plan is to extend our commitment to this core strategy, prioritizing scalable, sustainable growth, and methodical EBITDA expansion. As discussed earlier, the levers to our marketplace flywheel are marketing dollars to drive buyer growth, inbound processing of high-quality supply to fuel revenue, and customer experience investments to improve conversions. As our volume scales, the margin profile benefits from strong flow-through inherent in our marketplace model. Put simply, the more we grow, the more EBITDA dollars we generate.

Similar to our approach in 2025, we plan to flow through any incremental dollars above our guide back into these growth-driving opportunities.

With all that said, as James discussed earlier, we remain cautious on the current consumer environment and are taking a measured approach to our outlook. In addition, it is important to consider our typical seasonality. We expect the year to follow a similar quarterly cadence to 2025. To be explicit, we expect Q1 to be the smallest quarter in terms of both revenue and EBITDA dollars. This is because we normally experience some hangover from the Q4 holiday. At the same time, we ramp supply processing and marketing to accelerate revenue growth from Q1 onwards. That growth acceleration then drives EBITDA expansion through the year.

We expect revenue dollars to be the largest in Q2 and Q3, followed by a seasonal step down in Q4.

For the first quarter, we expect revenue in the range of $79.5 million to $80.5 million, representing 12% year-over-year growth at the midpoint; gross margin in the range of 78% to 79%; adjusted EBITDA of approximately 3% of revenue; and basic weighted average shares outstanding of approximately 128 million shares.

For the full year 2026, we expect revenue in the range of $349 million to $355 million, reflecting 13% year-over-year growth at the midpoint; gross margin in the range of 78% to 79%; adjusted EBITDA of approximately 6% of revenue, representing over 150 basis points of expansion versus last year; and basic weighted average shares outstanding of approximately 130 million shares.

In closing, we are extremely proud of the milestones we achieved in 2025. This year, we are more confident than ever in the fundamentals of our marketplace flywheel, our operational consistency, and our strategy, as we pursue predictable growth, expanding profits, and accelerating cash flow. James and I are now ready for your questions. Operator, please open the line.

Operator: We will now open for questions. If you would like to ask a question, please press 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press then the number 2. If you are using a speakerphone, please make sure to lift your handset before pressing keys. Your first question comes from the line of Ike Boruchow from Wells Fargo. Please go ahead.

Ike Boruchow: Congrats on the good end of the year. I guess, maybe for James or Sean, not sure, but just talk about the guide. You have got a lot of momentum coming out of the year, guide in the low double-digit range for Q1. Anything you are seeing in the business or anything notable to call out? Or is this just you guys taking a conservative approach to start? And then maybe, Sean, can you help us more with the revenue and EBITDA expansion pacing through the year or anything we should keep in mind for the models? Thanks.

James G. Reinhart: Hey, Ike. I will start. No, I do not think we are seeing anything materially different in the business. I think there is just enough uncertainty out there in the world that we continue investing in Q1, and we want to print the quarters, not guide the quarters. And so I think we are being appropriately thoughtful around what the next year could look like given the puts and takes. I think if you go back to where we were a year ago, we ran a very similar playbook, investing in Q1 and watching those returns come in Q2, Q3, and Q4.

And I think if we could have a repeat of last year this year, I think that would be a great result. And so we feel good about the momentum in the business coming out of Q4, and I will turn it over to Sean to talk a little bit about the cadence and the sequencing in the quarters, as I think that is more helping folks understand what ThredUp Inc. looks like in a more normalized operating environment. So I will let Sean handle that.

Graden Sean Sobers: Oh, hey, Ike, I will just go through a little more detail there. Expect Q1 to be our smallest quarter in both revenue and EBITDA dollars as well as EBITDA margin. Then we would expect Q2 revenue growth rate to reaccelerate to the highest of the year, and then on the EBITDA side, we would expect sequential EBITDA expansion into Q2, and then second-half EBITDA overall will be greater than first-half EBITDA. And I think that is the pattern that you are going to see for the business, not just this year, but I would expect in 2027 and 2028. That is, I think, the standalone U.S. business sequencing.

Ike Boruchow: Sorry, just a follow-up, Sean. When you say 2H greater than 1H on the EBITDA, you are talking just dollars or rate expansion year over year?

Graden Sean Sobers: Rate and dollars.

Ike Boruchow: Okay. Cool. Yes. Alright. Thank you. Sorry about that.

Operator: Your next question comes from the line of Matt Koranda from Roth Capital. Please go ahead.

Matt Koranda: Hey, guys. I guess I just wanted to hear a little bit more about the line items you expect to leverage in 2026, just given the EBITDA margin expansion guidance? Crossed up with, I guess, the gross margin slight decline year over year. Are we getting more leverage on the operations line, OPNT? It sounded like you are willing to invest in marketing. Anything over and above the target range of 6% for the year. Just wanted to hear you confirm that as well.

Graden Sean Sobers: Hey, Matt. This is Sean. Yes. Think of marketing will be at a similar percent of revenue for the year, meaning we are going to leverage SG&A and OPNT to gain that 150 bps on the EBITDA line. But I think on the gross margin side, to touch on that a little bit, when we did the IPO we set our long-term target 75% to 78%. We have been outpacing that for the last couple of years. We feel pretty good about the range of 78% to 79%.

And the reason that gives a little lower than some of the stuff we have done recently is it gives us a little bit of leverage to improve customer satisfaction or do things that we have not done historically. And James pointed out on the call, like on the TikTok Shop. That is something that we can do that is a little bit of a headwind to GM, but it is really good for the overall business.

Matt Koranda: Okay. That makes sense. And then maybe just speak to the level of competency you have in the top line in the second quarter. Is there something in recent customer trends in terms of the new customers you have acquired that gives you a better visibility to see that acceleration in the second quarter? Just wondering where that comes from given the commentary around some of the softness that you see in the macro as well.

James G. Reinhart: Yes. Hey, Matt. It is James. Yes. I mean, I think, again, I just want to emphasize how much the sequencing and pace of the business we are operating in this new normal. And I think that you should always see this sequential increase from Q1 to Q2. But that is really driven by just how the business attracts customers and delights customers over time. We always have this small hangover effect in Q1 as people digest their holiday spending. So they digest their holiday spending, then they make new resolutions: shopping more sustainably, being more thoughtful, cleaning out their closets, all that kind of New Year's resolution stuff.

That then creates opportunities for us to capture some of their attention and mind share, and then that produces some momentum into Q2. If you go back and look at 2025, it is the same thing. If you see Q1 growth rates in 2025 going from Q1 to Q2, it is the same pattern you are seeing in 2026. In fact, if you look at Q1 this year over Q1 last year, it is actually accelerating growth. We grew 10% in Q1 of last year, and we are guiding to 12%. So, anyway, I think that is just the normal cadence of the business.

Matt Koranda: Okay. Appreciate it. Thanks, guys.

Operator: Your next question is from the line of Dylan Douglas Carden from William Blair. Please go ahead.

Dylan Douglas Carden: Thanks. I kind of have a related question. So if you think about the 50-plus percent new buyer growth, the strong active customer growth that you printed, can you kind of remind us the lag effect or speak to any churn as far as sort of guiding the go-forward revenue growth where you have put it? Yes.

James G. Reinhart: Yes, Dylan. I mean, it is James. We always have churn in the business, but I think it is more, again, helping investors and others understand the patterns in the business. Because last year, Dylan, was the first sort of, I would characterize that as a clean year for us being U.S. only. And you typically see acceleration Q1 to Q2 to Q3, and then the seasonal step back in Q4. That was exactly the pattern in 2025. And even prior to going public, that was a very common pattern for the business. I think we are just getting back to that normal cadence. And so it is less about new buyer growth or churn.

It is more of, as customers come back in the market, how the business performs. So, hopefully, that helps set some context.

Dylan Douglas Carden: Yes. Thank you. And then any commentary on sort of customer acquisition costs? I know that sort of tends to be, or has emerged as, a hot-button topic for you guys—efficiencies, players in the market.

James G. Reinhart: Yes. Thanks. I mean, acquisition—you know, we have customer acquisition costs going up a little bit this year, just as we continue to invest in marketing and scale spend, but we are still expecting to acquire at least as many customers this year as we acquired last year, especially with spend incrementally up. So I expect another very strong year on the customer acquisition side for new buyers. Obviously, we are lapping, Dylan, a very different set of comps around total new buyers, but I expect strong momentum.

And then I think the real secondary emphasis is expanding those three- and five-year LTVs, and I think a lot of the product work that we are doing in 2026 is really focused there, which is a little bit different than in 2025, which was much more focused on reaccelerating first-time new buyer growth. But I think that will create some of the momentum as we move throughout the year.

Dylan Douglas Carden: Awesome. Thank you very much. Thanks.

Operator: Your next question comes from the line of Dana Lauren Telsey from Telsey Group. Please go ahead.

Dana Lauren Telsey: Hi, good afternoon everyone. As you talk about the product and the premium assortment that you have been having lately, what did you see in ASPs? Did the premium portion of the business differentiate from the earlier quarters in the year? Anything that you are seeing there? And also, how do you think about the health of your customer? Thank you.

James G. Reinhart: Hey, Dana. It is James. Yes. I think we are very pleased with the trajectory of premium in the business. It is a product for sellers that we launched over a year ago at this point, but it grew to be high teens—17%, 18%—of the business by Q4. I think you even saw more of it from a mix perspective, ASPs start to flow up because of holiday—handbags, more expensive dresses, shoes, those types of things. And I think it really speaks to us continuing to move, I think, where the sweet spot is for customers and making sure that we do not have too much exposure to the lowest-income demographic, which I think can be challenged in this economy.

And so I think the second part of your question, I think we have been on this multiyear journey to stepping up the mix of goods, the ASPs, the price points, and I think 2025 was a big step forward. I think 2026 will continue some of that. And then the last piece on this is, we launched the direct listings piece at the end of the year in 2025. And as I mentioned in the prepared remarks, I have been quite surprised by the price points in the direct selling business being more than double what we were seeing in the core.

And I think, again, that will allow us to touch a slightly more affluent customer and, I think, drive appropriate margin. So I think we feel very good about where the assortment is headed and the types of customers that we can attract and delight.

Dana Lauren Telsey: And, James, any color on category performance, what you saw?

James G. Reinhart: Dana, no. I hate to be a broken record. It is more of the same. We are still selling tons of dresses. I do think, though, that Q4—again—we had another very successful year with our Holiday Shop. The business growing 18% year over year on top of Q4 last year was actually like the first quarter reacceleration. So what I would say is that the customer is starting to—or secondhand is starting to—resonate more with customers around the holidays, and I think that is a place we want to continue to push in the years ahead.

Operator: Thank you. Your next question comes from the line of Robert Brooks from Northland Capital Markets. Please go ahead.

Robert Brooks: James, I think you mentioned in a couple of questions ago that 2026 there is a lot on the slate for product enhancements focused on expanding the three- and five-year LTVs of customers, and that is exciting news just thinking about how successful you guys integrated AI into the search piece. So just was curious if we could get a little bit more granular detail on those plans of trying to drive the long-term LTVs higher?

James G. Reinhart: Yes. Hey, Bobby. Yes. I mean, I do not want to get too far ahead of ourselves. I think you will definitely hear us put some things in market over the next couple of quarters, but what I would say at a high level is we are really emphasizing customers choosing to go to ThredUp Inc. first for all of their needs. I think, historically, people would—ThredUp Inc. would be one of, say, a handful of places in their consideration set around where they might shop. They might shop discount retail. They might shop off-price.

I think what we are really trying to do is emphasize that we can really serve all of your closet needs by building this robust personalization experience. And that started with the Daily Edit, which we talked about last quarter, but I will tell you that the Daily Edit momentum is growing. You are seeing customers come back every day and checking what is new, and that is allowing us to refine the mix of goods that we can put in front of you. And so I think the focus really is how do we move you from—the average customer might buy 12 items a year, but we know that is still only 25% of her closet.

I think what we are really trying to attack, Bobby, is the other 75%. And so a lot of the investments are to make ThredUp Inc. top of mind for all of your needs, and so I am very excited about what I am seeing from the team around these types of investments. And I do think if we get this right, you can see real expansion in LTV. And I think if you do that, you can really then change the acquisition mix over time.

Robert Brooks: Absolutely. Looking forward to hearing more on that. Then it was great to hear—I think you called out you sold 100,000 Clean Out bags through the TikTok Shop, which was really impressive, and maybe even more—maybe even more impressive was the 97% were folks new to ThredUp Inc. Just curious, how did those folks get to the TikTok Shop to buy the Clean Out bag? Was there specific advertising campaigns? I was just kind of curious to hear that. And when I think of the 100,000 bags, were the majority of those already sent in and now going to the supply chain? Just curious to hear more there.

James G. Reinhart: Sure. It started as a campaign with some influencers, some affiliates. But the thing about TikTok is it can take on a life of its own. And so we truly went viral there for a little bit with influencers and affiliates talking about the Clean Out Kit value. And so that was great. It was a ton of new sellers. We are now in the process of processing those bags to really understand the mix of goods, because, obviously, it is not just quantity. We want high-quality product coming through. And we have been tweaking exactly how we are trying to work with influencers and affiliates to get the right stuff.

But I think it is super exciting because it really shows how the brand that we built—specifically the rebrand—and the service offering can resonate at that type of viral scale. And so I think it is more now of us getting it all the way dialed in, Bobby, but I think it could be a real unlock for our supply goal not just over the next year, but over the next several years if we can really get this right. And then we also want to learn for how we can translate it into some of the work we can do on buyer development, some of the work we can do on direct selling.

So it is an exciting opportunity and I am thrilled it was really driven by just a handful of great product and engineering and marketing folks coming in to drive that.

Robert Brooks: Got it. And then one more for me is on the bulk import with the peer-to-peer selling. That was really interesting, and I just wanted to hear more. Is it as simple as them turning over their seller page from a different platform, and then it is just a click of a button and everything gets integrated into the ThredUp Inc. platform? I was just curious to hear that cycle a little bit more.

James G. Reinhart: Yes. I think the engineers would berate me if I said it is just that easy. But, yes, the idea is that customers can, with just a handful of clicks, export and import their listings. And we always believed this would be a really important tool to reduce switching costs. With any marketplace where seller reputation matters, switching costs are a really important thing. But I think our thesis on direct selling was that the barriers out there in peer to peer and the switching costs are getting lower and lower with the improvement in AI technology.

And so I think the combination of technology improvements independent of ThredUp Inc., as well as our strategy to make it as easy as possible for you to list, and the convergence of those two has been successful. And so you are really seeing established sellers on these other platforms say, “Oh, well, I will give ThredUp Inc. a try because it is so easy.” And so I think that is an exciting development. And we are going to keep doing things like that to make ThredUp Inc. really the easiest way to consolidate all of your selling.

Robert Brooks: Makes sense. Appreciate the time. Thanks.

Operator: Your last question comes from the line of Julia Shlansky on for Oliver Chen from TD Cowen. Please go ahead.

Julia Shlansky: Hi, this is Julia Shlansky on for Oliver Chen. I was curious if you could provide a snapshot of the percentage of fixed versus variable costs within OPNT and SG&A today, and how you expect that mix to evolve as you gain operating leverage? And second, I am curious how rising ASP influences your payback math across cohorts and particularly within newer customer acquisition channels such as TikTok. Thank you.

James G. Reinhart: Yes. I think I will take the second one, and then I can let Sean provide a little bit of color on the mix. I think as you have ASPs go up on premium listings, you do have more potential contribution margin that flows through as those items sell, and, therefore, that contribution margin can flow into the LTV math that would allow you to pay higher CAC. I think that is generally how our engine has worked over the past few years. And so I do think premium helps us acquire some more customers, and I think our strategy is to provide more premium product in 2026 relative to 2025.

So I think that and CAC can kind of work together, but we also recognize that the ad markets are dynamic, and so we have to be thoughtful around making sure that we are honest with the LTV/CAC payback math. But as for the other stuff, OPNT and SG&A, let Sean kind of treat it.

Graden Sean Sobers: SG&A is pretty easy because it is mostly—almost like 97%—what you would consider fixed. The only piece that goes through SG&A is the payment processor fees, which are about 3%. And then OPNT, it is more like 60/40 variable/fixed. Sorry—40/60 variable/fixed.

Julia Shlansky: Got it. Great. Thank you.

Operator: Thank you. There are no further questions at this time. I would now like to turn the call back to James G. Reinhart for closing comments. Sir, please go ahead.

James G. Reinhart: Well, thank you all for joining our 2025 full-year results call. To a great year. I want to thank all the ThredUp Inc. teammates for all their hard work in 2025, and I am excited about the opportunities in the business in 2026, and look forward to talking to all of you in just a couple of short months. Thanks.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.