ThredUp’s first quarter results were marked by significant acceleration in U.S. marketplace growth and a surge in new buyer acquisition, which management attributed to targeted marketing investments and improvements in inventory processing. CEO James Reinhart highlighted a 95% increase in new buyers compared to the prior year, noting, “April was the strongest new customer acquisition month in our history.” The company also benefited from operational efficiencies, with adjusted EBITDA margins expanding as revenue outpaced expectations. Management attributed the performance to a combination of optimized marketing spend, enhanced AI-driven product discovery features, and a robust supply of premium inventory, rather than any short-term shifts in the macroeconomic environment.
Is now the time to buy TDUP? Find out in our full research report (it’s free).
ThredUp (TDUP) Q1 CY2025 Highlights:
- Revenue: $71.29 million vs analyst estimates of $68.32 million (10.5% year-on-year growth, 4.4% beat)
- Adjusted EBITDA: $3.81 million vs analyst estimates of $2.17 million (5.3% margin, 75.1% beat)
- The company lifted its revenue guidance for the full year to $286 million at the midpoint from $275 million, a 4% increase
- Operating Margin: -7.6%, up from -19.2% in the same quarter last year
- Orders: 1.37 million, up 190,000 year on year
- Market Capitalization: $920 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions ThredUp’s Q1 Earnings Call
- Ike Boruchow (Wells Fargo) asked what underpins management’s confidence in sustaining buyer and revenue growth. CEO James Reinhart pointed to momentum in new buyer acquisition and supply-side processing, noting “everything is really fundamentally sound.”
- Dana Telsey (Telsey Group) inquired about the demographics of new buyers and marketing plans. Reinhart explained that new customers are skewing more middle to upper income and that efficient marketing spend will continue if paybacks remain attractive.
- Dylan Carden (William Blair) questioned the sustainability of high marketing spend and SG&A leverage. Reinhart responded that the company intends to reinvest incremental flow-through into growth, driving operating leverage as contribution margins improve.
- Bernie McTernan (Needham & Company) asked about macro assumptions in guidance, specifically tariffs. CFO Sean Sobers clarified that guidance assumes no tailwind from tariffs, and Reinhart emphasized ThredUp’s relative insulation from direct tariff impacts.
- Kunal Madhukar (Water Tower Research) sought details on seller trends post-tariffs and average revenue per order. Reinhart highlighted growth in premium consignment and clarified that lower average revenue per order is due to promotional incentives for new buyers rather than pricing pressure.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be tracking (1) the pace of new buyer acquisition and retention as marketing investments scale, (2) the effectiveness and broader rollout of AI-powered features such as “shop social” and personalized discovery, and (3) any measurable impact from tariff changes and the de minimis loophole closure on both demand and supply. The evolution of ThredUp’s branded resale partnerships and seller engagement will also be key indicators of future growth.
ThredUp currently trades at $7.81, up from $4.43 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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