ThredUp Reports Impressive Q4 and Annual Financial Growth

Financial Performance Overview

ThredUp Inc. (NASDAQ: TDUP), a leading online resale platform for apparel, shoes, and accessories, recently reported its financial results for the fourth quarter and full year. The company achieved remarkable quarterly revenue of $67.3 million, reflecting a year-over-year increase of 9%. Additionally, ThredUp recorded a record gross margin of 80.4%, showcasing significant progress in controlling costs and enhancing profitability.

Fourth Quarter Highlights

For the fourth quarter of 2024, ThredUp's thorough efforts led to total revenue reaching $67.3 million, which marks a 9% growth compared to the previous year. The gross profit amounted to $54.1 million, an increase of 14%. This impressive growth aligns closely with their overall strategy of making secondhand shopping easier and more accessible for all consumers.

Active Buyer Engagement

During this quarter, ThredUp reported 1,274 thousand active buyers, along with processing 1,226 thousand orders. While there was a slight year-over-year decline in active buyers by 6%, the orders registered a 2% increase. This fluctuation reflects the evolving landscape of consumer preferences in online shopping and resale.

Full Year Highlights

Looking at the complete fiscal year of 2024, ThredUp reported total revenue of $260.0 million, with a modest growth of 1% from the previous year. The annual gross profit reached $207.1 million, indicating a 4% increase year-over-year. Despite facing operating challenges, the company managed to reduce its loss from continuing operations to $40.0 million, compared to a larger loss of $52.4 million in the prior year.

Strategic Changes and Outlook for 2025

ThredUp made significant adjustments in its operational strategy by divesting 91% of its European business, Remix. This strategic move is expected to streamline operations further while focusing closely on their core markets. CEO and co-founder James Reinhart expressed optimism for 2025, aiming to leverage their investments in technology and infrastructure to drive growth and work toward long-term profitability targets.

Future Projections

Looking ahead, ThredUp forecasts revenue in the range of $270.0 million to $280.0 million for the full fiscal year 2025. The expectations reflect a 6% year-over-year growth at the midpoint. Moreover, the company anticipates maintaining a healthy gross margin of 77.0% to 79.0% while aiming for an adjusted EBITDA margin similar to the prior year’s figure of 3.3%.

Investing in Customer Experience

ThredUp emphasizes enhancing the customer experience as a crucial part of their growth strategy. During Q4, they achieved their strongest new buyer acquisition in history. Innovations like Image Search have vastly improved conversion rates, enabling customers to engage more deeply with the platform's offerings.

Conclusion

In summary, ThredUp's recent financial results demonstrate a robust business model that adapts to changing market conditions. With an eye toward future growth and a commitment to fostering sustainable practices in apparel resale, the company is strategically poised for the upcoming fiscal year.

Frequently Asked Questions

What were ThredUp's total revenues for Q4 2024?

ThredUp reported total revenues of $67.3 million for Q4 2024, representing a 9% increase year-over-year.

How did ThredUp's gross margins perform in 2024?

ThredUp achieved a record gross margin of 80.4% in Q4 2024 and a full-year gross margin of 79.7%.

What was the change in active buyers for ThredUp in Q4 2024?

Active buyers decreased by 6% year-over-year to 1,274 thousand in the fourth quarter.

What are ThredUp's revenue expectations for 2025?

ThredUp expects full-year revenue to be in the range of $270.0 million to $280.0 million for 2025.

What operational changes did ThredUp make recently?

ThredUp divested 91% of its European business, Remix, to streamline its operations and focus on core markets.

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