ThredUp Q2 Earnings Call Highlights
ThredUp (NASDAQ:TDUP) reported second-quarter 2026 revenue of $90.8 million, up 16.9% from a year earlier, as active buyers and orders grew at double-digit rates. The online resale company said the results exceeded its internal expectations, though management lowered its outlook for the second half as it plans to use more promotions to support engagement among price-sensitive customers.
Chief Executive Officer and Co-Founder James Reinhart said the consumer environment was more difficult than expected, particularly in June and into July. While traffic remained strong and the company recorded its highest-ever quarterly new-buyer acquisition, some shoppers needed greater incentives to complete purchases.
“We had to be incrementally promotional to drive conversion among our most price-sensitive shoppers,” Reinhart said. The company estimated that promotional activity created a $3 million headwind to second-quarter revenue through lower average selling prices and average revenue per buyer.
Buyer Growth and Quarterly Financial Results
ThredUp ended the quarter with 1.8 million trailing-12-month active buyers, a 21% increase from the prior year. Second-quarter orders rose 22% year over year to 1.9 million, while new-buyer acquisition increased 13.1%, lapping 72% growth in the comparable period a year earlier.
The company reported a GAAP net loss of $5.9 million, compared with a net loss of $5.2 million in the prior-year quarter. Adjusted EBITDA totaled $4.8 million, or 5.3% of revenue, representing a 140-basis-point improvement from the prior year, according to Chief Financial Officer Sean Sobers.
- Revenue: $90.8 million, up 16.9% year over year.
- Gross margin: 79.9%, up 40 basis points year over year.
- GAAP net loss: $5.9 million.
- Adjusted EBITDA: $4.8 million, or 5.3% of revenue.
- Cash and securities at quarter-end: $57.4 million, up from $54.4 million at the beginning of the quarter.
- Cash generated during the quarter: $3 million.
- Capital expenditures: $2.7 million.
Sobers attributed gross-margin improvement to greater logistics efficiency. He said the company expects capital spending in 2026 to remain at levels similar to those in 2025.
Promotions Focused on Older Inventory
Management said its second-half strategy is intended to preserve engagement without discounting newly listed merchandise. Reinhart said the company is emphasizing discounts on aging inventory rather than fresh products, which it views as important to maintaining customers’ willingness to pay for new marketplace listings.
The pressure has been concentrated among shoppers earning less than $60,000 annually, Reinhart said, describing that cohort as less than 20% of the company’s customer base. He pointed to higher gas prices related to Middle East conflict as a factor weighing on budget-conscious consumers.
At the same time, ThredUp said it is shifting its buyer mix toward more premium customers. The company has reduced spending on Google PMax in favor of Meta and Pinterest, where it said customer lifetime values are higher and acquisition costs have declined. New-customer volume from Meta rose 130% year over year, while Pinterest volume increased 145%.
Reinhart said average order values are expected to decline somewhat in the back half of the year because of promotional activity, while orders and active-buyer growth are expected to remain strong. The company does not plan to materially alter its marketing approach in the fourth quarter relative to last year, he added.
Guidance Reduced for Second Half
ThredUp lowered its revenue and adjusted EBITDA-margin expectations for the rest of 2026, citing an estimated $7 million revenue headwind from elevated promotions in the second half. Sobers said the EBITDA effect reflects both lower revenue and the company’s continued investments in marketing and processing.
- Third quarter: Revenue of $87 million to $89 million, representing 7% year-over-year growth at the midpoint; gross margin of 78% to 79%; and adjusted EBITDA of about 4% of revenue.
- Fourth quarter: Revenue of $85 million to $87 million, representing 8% growth at the midpoint; gross margin of 77.5% to 78.5%; and adjusted EBITDA of about 6% of revenue.
- Full year: Revenue of $344.4 million to $348.4 million, representing 11% growth at the midpoint; gross margin of 78.7% to 79.1%; and adjusted EBITDA of about 4.7% of revenue.
The company expects to remain cash-flow positive for the full year. Reinhart said the updated outlook is intended to avoid relying on favorable macroeconomic shifts, seasonal acceleration and flawless execution to meet the company’s previous expectations.
Supply, Brand Partnerships and AI Features
On the supply side, ThredUp said active sellers reached record levels and premium bag items increased 32% year over year, reaching 12% of the company’s overall mix. The company is seeking a higher premium mix by year-end through seller incentives, new acquisition channels and seller-experience investments.
In June, ThredUp opened its direct-listings peer-to-peer offering to all marketplace users. Since then, listed items have increased 89% month over month, surpassing 100,000 items. The average listing price was $80. Reinhart said direct listings have a more premium product mix than the managed marketplace, though sell-through rates are slower, consistent with other peer-to-peer marketplaces.
The company also introduced three Resale-as-a-Service storefronts during the quarter for Steve Madden, Dolce Vita and Betsey Johnson. Reinhart said each storefront can attract sellers who have an existing relationship with those brands. He added that ThredUp plans to focus its Resale-as-a-Service efforts on more elevated brands, following a spring initiative with Reformation.
ThredUp continued to emphasize AI-driven shopping tools. Its new real-time personalization engine adjusts inventory feeds based on user intent within seconds, and an initial A/B test produced a 5% increase in item engagement and a 7% increase in profit per buyer among new customers, Reinhart said. The company has also expanded features including Clustering, Exact Match and Notify Me, with Notify Me opt-ins increasing more than 50% week over week since launch.
About ThredUp (NASDAQ:TDUP)
ThredUp, Inc operates an online consignment and thrift platform that enables consumers to buy and sell secondhand clothing and accessories. Through its digital marketplace, the company offers curated selections of apparel for women and children, spanning a broad range of brands and styles. Sellers can order a “Clean Out Kit” to send in items they no longer wear, while buyers benefit from discounted prices and a simplified shopping experience powered by ThredUp's in-house authentication, quality control and logistics capabilities.
In addition to its core consumer-to-consumer marketplace, ThredUp has expanded into business-to-business services with its Resale-as-a-Service (RaaS) offering.
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