Executive Summary

ThredUp delivered record Q3 revenue of $82.2M (+34% YoY) with gross margin of 79.4% and Adjusted EBITDA margin of 4.6%, driven by record new buyer acquisition (+54% YoY) and strong order growth (+37% YoY) .
Results were above Wall Street consensus: revenue $82.2M vs $77.6M* and EPS -$0.03 vs -$0.043*; management raised Q4 and full-year revenue outlooks while maintaining margin targets .
Management cited earlier-quarter marketing and inbound processing investment, low CACs, improved conversion from AI-driven features, and a richer “premium” supply mix lifting ASPs as key drivers; Q4 guide embeds seasonal holiday headwinds and marketing pullback .
Strategic updates included a full brand re-launch, new personalization (Daily Edit/Trend Report), the beta launch of direct peer-to-peer (P2P) selling, and a new RaaS partnership with Cotopaxi—broadening supply and engagement vectors into 2026 .
Near-term catalysts: sustained buyer growth, raised FY revenue (+$9M at midpoint), P2P rollout, and RaaS wins; risks include holiday wallet share shift to new gifts and continued macro uncertainty .

What Went Well and What Went Wrong

What Went Well

Record revenue and accelerating growth: Q3 revenue $82.2M (+34% YoY), 4th straight quarter of acceleration; Adjusted EBITDA $3.8M (4.6% margin) vs $0.3M (0.5%) LY .
Customer acquisition and engagement: New buyer growth +54% YoY (best in company history), Active Buyers +26% YoY to ~1.57M, Orders +37% YoY; October was the best month ever for new customers (+81% YoY), tied to historically low CACs .
Strategic product advances: Rebrand plus AI-powered “Daily Edit” (100-item personalized feed) and “Trend Report” improved conversion; launch of direct P2P selling (closed beta) and new RaaS win with Cotopaxi expand supply and partner channels .

Selected management quotes:

“We acquired more new customers in the third quarter than at any other time in our history…new buyer acquisition up 54% YoY.”
“This was a major technical advancement in our personalization capabilities, powered by AI models we trained in house.”
“We are launching direct selling on ThredUP…we believe [it] will be a strong long-term EBITDA driver.”

What Went Wrong

GAAP profitability still negative: Loss from continuing operations of $(4.2)M (−5.2% of revenue), albeit improved vs $(10.4)M (−16.8%) LY .
Seasonal step-down ahead: Q4 revenue guided to $76–78M (~+14% YoY midpoint), reflecting typical holiday slowdown for resale and planned marketing pullback amid higher ad costs .
Macro caution: Management remains wary of holiday wallet share shifts to new gifts and overall consumer softness despite potential tariff-related tailwinds for resale value positioning .

Financial Results

P&L Snapshot (GAAP unless noted)

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($M)	$61.5	$77.7	$82.2
Gross Margin (%)	79.3%	79.5%	79.4%
Adjusted EBITDA ($M)	$0.31	$3.02	$3.77
Adjusted EBITDA Margin (%)	0.5%	3.9%	4.6%
Loss per Share – Continuing Ops ($)	$(0.09)	$(0.04)	$(0.03)

Notes: Adjusted EBITDA excludes SBC, D&A, interest, taxes, severance/other and gains; see reconciliations .

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Active Buyers (000s)	1,370	1,465	1,568
Orders (000s)	1,371	1,535	1,608

Additional highlights: New buyers +54% YoY; Active Buyers +26% YoY; Orders +37% YoY .

Consensus vs Actuals and Forward Benchmarks

Metric	Q3 2025 Actual	Q3 2025 Consensus*	Q4 2025 Company Guide	Q4 2025 Consensus*
Revenue ($M)	$82.2	$77.6*	$76.0–$78.0	$77.2*
EPS (Primary) ($)	$(0.03)	$(0.043)*	NA	$(0.04)*

*Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q4 2025	$73–$75	$76–$78	Raised
Revenue ($M)	FY 2025	$298–$302	$307–$309	Raised
Gross Margin (%)	FY 2025	78.0–79.0	79.0–79.2	Raised
Adj. EBITDA Margin (%)	Q4 2025	~3.0	~3.0	Maintained
Adj. EBITDA Margin (%)	FY 2025	~4.2	~4.2	Maintained
D&A ($M)	Q4 2025	~3.2	~3.2	Maintained
Stock-Based Comp ($M)	Q4 2025	~3.6	~3.8	Raised
Weighted Avg Shares (MM)	Q4 2025	~129	~126	Lowered

CFO noted the Q4 revenue raise is ~$3M above prior outlook; guide embeds seasonal holiday slowdown and ad-market CAC pressure .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Personalization & Conversion	18+ months into AI-led journey; features like visual/image search and social commerce improved signup-to-purchase conversion (+18%) .	Launch of “Daily Edit” and “Trend Report” powered by in-house AI embeddings; continued conversion gains; AI-generated content at scale .	Strengthening
Marketing Efficiency/LTV:CAC	Lower CACs driven by conversion improvements; aggressive but disciplined spend (high teens–20% of revenue) .	Historically low CACs; October best-ever new customer month (+81% YoY) .	Improving
Premium Supply/ASP	Premium mix drove higher ASPs; gross margin +70 bps YoY in Q2 .	Premium kits >20% of supply; supports higher ASPs and margins .	Positive mix shift
RaaS (Resale-as-a-Service)	Open-source RaaS model; re-engaged >60 brands; longer enterprise cycles .	Cotopaxi launch (shop + clean-out) announced; pipeline aided by contract renewals into 2026 .	Momentum building
Direct P2P Selling	Not launched.	Closed beta; focus on casual sellers, vetting, buyer returns/“insurance”, and tool monetization; goal to be long-term EBITDA driver .	New growth vector
Macro/Tariffs	De minimis closure and tariffs seen as potential tailwinds for resale value vs fast fashion .	Tariffs remain tailwind for acquisition; cautious on holiday wallet share shift to new gifts .	Mixed: tailwind vs holiday headwind

Management Commentary

Strategy and drivers: “Revenue growth accelerated to 34% year over year…driven by exceptional customer growth and orders…we acquired more new customers in the third quarter than at any other time in our history” .
Product & AI: “Daily Edit…100 items refreshed daily…powered by AI models…real time user and item embeddings…Trend Report…AI to combine macro and social trends…generate imagery and style feeds” .
Direct selling (P2P): Focus on casual sellers with vetting; no listing fees; buyer returns enabled via ThredUp’s infrastructure; monetize via buyer fees/returns “insurance” and seller tools; expected to be a long-term EBITDA driver .
Profitability approach: “Maintain our gross margin efficiency, gradually expand the bottom line, but largely reinvest incremental dollars…into product improvements, marketing spend and long term innovation” .
Long-term ambition: “Path to be a Rule of 40 company…long-term EBITDA model 20–25% implies growth in high teens to 20%” .

Q&A Highlights

2026 framing: Initial planning for low double-digit revenue growth with slightly better EBITDA expansion than 2025 (~+90 bps in 2025); more detail in March .
Q4 cadence: October strong; guide embeds holiday shift to new gifts and higher CACs; sequential step-down typical for resale .
RaaS pipeline: Contract renewal cycles drive timing; renewed momentum with brands; Cotopaxi announced; more expected over next months .
P2P unit economics: Lower top-line per transaction but superior margins on a variable basis; vetting and returns capability differentiate experience; monetize via buyer fees and optional returns .
Marketing: Historically low CACs; improved conversion from AI; plan to continue investing with disciplined LTV:CAC .

Estimates Context

Q3 2025: Revenue $82.2M vs $77.6M*; EPS $(0.03) vs $(0.043)*—both above consensus .
Q4 2025: Company revenue guide $76–$78M bracketing consensus of ~$77.2M*; no EPS guidance .
Note on EBITDA: Company focuses on Adjusted EBITDA (+$3.8M; 4.6% margin) while S&P’s “EBITDA” estimate/actual may not be comparable to management’s non-GAAP measure .