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    ThredUp Inc (TDUP)

    TDUP Q1 2025: New Buyer Acquisition Soars 95% YoY

    Reported on Aug 18, 2025 (After Market Close)
    Pre-Earnings Price$4.44Last close (May 5, 2025)
    Post-Earnings Price$5.39Open (May 6, 2025)
    Price Change
    $0.95(+21.40%)

    What went well

    • Strong buyer acquisition: New buyers increased by 95% YoY and improved conversion rates driven by a superior product experience signal sustainable revenue growth.
    • Efficient marketing and innovation: Enhanced AI-driven product features and favorable customer acquisition efficiencies have resulted in lower CACs and higher engagement, creating a positive feedback loop for continued topline expansion.
    • Resilient macro positioning: ThredUP’s limited direct tariff exposure and benefits from the closure of the de minimis loophole bolster its value proposition against new apparel pricing pressures.

    What went wrong

    • Margin Pressure from New Buyer Promotions: The aggressive push for new buyer acquisition drives significant promotional discounts that lower the average revenue per order, potentially putting pressure on gross margins.
    • Macroeconomic and Tariff Uncertainty: The uncertainty around tariff impacts and the closure of the de minimis loophole creates a volatile environment, making it difficult to predict how these factors will eventually affect pricing and consumer demand.
    • Reliance on High Marketing and Operational Investments: Heavy spending on marketing and inbound processing to drive buyer growth may not sustainably translate into improved profitability if the incremental efficiencies do not materialize as expected.

    Q&A Summary

    1. Buyer Growth
      Q: What sustains strong buyer growth?
      A: Management highlighted that new buyer acquisition surged 95% YoY driven by enhanced product experiences and efficient processing that created sustained momentum for future growth.

    2. Margin Seasonality
      Q: Will Q3 revenue and EBITDA peak?
      A: Leaders expect revenue to accelerate from Q2 into Q3 with EBITDA approaching 4.5%, before easing in Q4 to align with the full‐year outlook.

    3. Guidance & Macroeconomic
      Q: How do tariffs and macro factors affect guidance?
      A: They explained that guidance is based on current strong performance with no direct tariff exposure, and while de minimis policy changes can help, the overall assumptions remain neutral.

    4. Marketing Leverage
      Q: How is marketing spend supporting efficiency?
      A: Management noted that robust and efficient marketing investments are reinvested to drive strong customer acquisition and help leverage SG&A, enhancing bottom‐line performance.

    5. Inflation Impact
      Q: How is inflation affecting consumers?
      A: They observed that despite inflationary pressures, the company’s premium value proposition and solid processing capacity ensure consumers still find strong value in ThredUP’s offerings.

    6. Customer Demographics
      Q: Who are the new customers?
      A: New buyers primarily come from a middle-to-upper income segment, attracted by improved product discovery and the record-setting acquisition performance observed in April.

    7. Seller Trends
      Q: What are the trends on the seller side?
      A: Management reported healthy seller momentum with growing premium consignment activity and innovative initiatives like selling items with returns, bolstering supply quality.

    8. Shop Social
      Q: What’s the status of Shop Social?
      A: The beta for Shop Social is performing well, and management is optimistic about a near-term broad rollout that is expected to drive higher conversion and enhanced customer engagement.

    9. Order Revenue
      Q: Why did average revenue per order dip?
      A: The slight 5% decline in average revenue per order was attributed to promotions for first-time buyers rather than any underlying pricing pressure.

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