1stdibs.com, Inc. (DIBS)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 came in essentially in line on topline with net revenue of $22.1M (-0.4% YoY; -1.8% QoQ), gross margin of 71.8% (+10 bps YoY), and GAAP EPS of $(0.12), while adjusted EBITDA was $(1.8)M (−7.9% margin) and total operating expenses fell 4% YoY, reflecting continued cost discipline .
• KPIs showed mixed demand: GMV declined 2% YoY to $89.9M; orders fell ~3% YoY to ~33K, while active buyers rose 5% YoY to ~64K; jewelry (~20% of GMV) grew high single digits, offset by softness in home categories tied to the housing market .
• Management said Q2 met or exceeded all guidance metrics and reiterated a focus on conversion (now up seven consecutive quarters) and efficiency; Q3 2025 guidance implies revenue of $21.0–$22.1M and adjusted EBITDA margin of (12%)–(8%) amid seasonally lower revenue and gross margin near the low end of the 71–73% range .
• Narrative drivers: April 2 tariff headlines temporarily dampened conversion early in the quarter before improving; paid marketing optimizations reduced paid traffic, but >70% traffic remains organic; take rate rose ~30 bps YoY due to mix shift to lower-value orders .
• Potential stock catalysts: sustained conversion gains and ML-pricing adoption, jewelry category resilience, and execution on Q3 guidance; leadership addition of Bradford Shellhammer as CMO/CPO underscores intent to accelerate product and marketing velocity .

What Went Well and What Went Wrong

• What Went Well

  • Conversion increased for the seventh consecutive quarter, aided by funnel optimizations (PDP call-to-action changes, trust signals, smoother checkout), and ML pricing models now live across all verticals with early adoption benefits on sell-through and reduced negotiations .
  • Cost discipline: total operating expenses declined 4% YoY; sales & marketing down 12% YoY as the team optimized paid performance and maintained a >70% organic traffic mix; adjusted EBITDA met/exceeded guidance .
  • Jewelry strength and market share gains versus a contracting luxury home goods market (per syndicated card data) helped offset pockets of demand weakness; management emphasized consistent share gains over the last six quarters .

• What Went Wrong

  • GMV declined 2% YoY to $89.9M and orders fell ~3% YoY amid macro headwinds (soft luxury housing; discretionary caution); on-platform AOV was ~$2,600, flat YoY, with a slight shift away from higher-value orders .
  • April 2 tariff news flow weighed on conversion early in the quarter; traffic growth softened driven by reduced paid investment (performance marketing was tightened), partially offset by improving conversion later in the quarter .
  • Adjusted EBITDA margin modestly deteriorated to (7.9)% vs (7.1)% a year ago, reflecting lower seasonal revenue and mix; tech development spend rose on merit increases, lifting tech OpEx as a percent of revenue to 27% vs 24% YoY .

Financial Results

Quarterly trend (oldest → newest)

Year-over-year and sequential context (period-aligned)

Marketplace KPIs

Additional operating detail

• Take rate rose ~30 bps YoY on mix shift to lower value orders; transaction revenue ~75% of total; provision for transaction losses ~4% of revenue (flat YoY) .
• Cash, cash equivalents and short-term investments: $94.3M as of June 30, 2025 .

Guidance Changes

Management context: Q3 guide embeds seasonally low revenue, gross margin at lower end of 71–73% range, continued benefit from paid marketing optimizations .

Earnings Call Themes & Trends

Management Commentary

• CEO on macro and share: “While GMV modestly declined, we continued to gain market share against the contracting luxury home goods market… conversion gains for seven consecutive quarters.”
• CEO on ML pricing: “Proprietary models leverage our transactional database… we are seeing increased sell-through on items meeting our pricing recommendations and a reduction in price negotiations.”
• CFO on operating discipline: “Operating expenses were $21.6M, a 4% reduction… adjusted EBITDA margin loss was 8% vs. 7% a year ago.”
• CEO on AI/search: “To date, the impact on our organic search traffic has been low, but this remains an area of ongoing surveillance.”
• Leadership: Appointment of Bradford Shellhammer as CMO/CPO to drive marketing and product execution .

Q&A Highlights

• Macro and demand: Management sees continued softness in housing and luxury home goods; believes it is gaining market share versus syndicated card data despite modest GMV declines .
• AI-driven search risk: Active monitoring; no material impact to organic traffic or core keywords yet .
• Active buyers trajectory: Growth tied to conversion improvements; macro drove a notable conversion step-down from March to April in consumer furniture .
• Path to profitability: Management reiterated breakeven depends on revenue growth with expense discipline; targeting operating leverage at mid-single-digit revenue growth in 2025 .
• ML pricing adoption: High adoption below $9,000 ticket; lower at higher price points given fewer data points; expanding ML to shipping quotes to raise pre-quote coverage and conversion .

Estimates Context

Q2 2025 actuals vs S&P Global consensus

Q3 2025 context

Notes: Asterisks indicate values retrieved from S&P Global.
Implications: Q2 revenue and EPS were slight beats vs consensus; Q3 revenue guide midpoint ($21.55M) is roughly in line with consensus ($21.51M), suggesting steady near-term expectations while the company prioritizes conversion and cost control .

Key Takeaways for Investors

• Execution remains consistent: seven straight quarters of conversion gains, disciplined OpEx (-4% YoY), and in-range Q2 results; the playbook of funnel optimization and ML pricing is working against a tough macro .
• Demand is choppy: GMV (-2% YoY) and orders (~−3% YoY) reflect discretionary softness and housing headwinds; category mix skews to jewelry strength while home categories lag .
• Mix and pricing support monetization: Take rate up ~30 bps YoY; ML pricing shows promising sell-through/negotiation benefits and should support continued conversion improvement .
• Q3 guide is seasonal and disciplined: revenue $21.0–$22.1M and adjusted EBITDA margin (12%)–(8%) reflect seasonality, cautious macro, and low-end gross margin assumption; execution on paid optimizations and organic traffic should be watched .
• Balance sheet optionality: $94.3M in cash and investments offers runway to invest in product/marketing and navigate volatility; repurchases have been used historically to enhance per-share metrics .
• Leadership upgrade: New CMO/CPO Bradford Shellhammer should accelerate product velocity and brand/traffic initiatives—potential medium-term upside if adoption and traffic lift materialize .
• Trading setup: Near-term stock moves likely tied to signs of accelerating GMV (especially outside jewelry), sustained conversion gains, and Q3 execution vs guide; watch AI/search traffic impacts and tariff-related volatility, though no material impact observed yet .

Sources: Q2 2025 8‑K and press release, earnings call transcript, prior Q1 2025 and Q4 2024 materials, and S&P Global consensus where noted .