ThredUp Inc (TDUP) Posts Revenue Growth Amidst Narrowing Losses
Revenue Growth: Q4 revenue increased by 14% year-over-year to $81.4 million; full year revenue up 12% to $322.0 million.
Gross Margin: Q4 gross margin stood at 61.9%, with a full year gross margin of 66.4%.
Net Loss Improvement: Q4 net loss reduced to $14.6 million from $19.5 million in Q4 2022; full year net loss decreased to $71.2 million from $92.3 million in 2022.
Adjusted EBITDA: Q4 Adjusted EBITDA loss improved to $2.1 million; full year Adjusted EBITDA loss improved to $17.4 million.
Active Buyers and Orders: Record 1.8 million active buyers and 1.8 million orders in Q4, with annual orders reaching 6.9 million.
On March 4, 2024, ThredUp Inc (NASDAQ:TDUP) released its 8-K filing, detailing its financial results for the fourth quarter and full year ended December 31, 2023. The online resale platform for women and kids apparel, shoes, and accessories reported a year of growth and improved financial health, despite challenges in the retail sector.
Financial Performance Overview
ThredUp Inc (NASDAQ:TDUP) announced a 14% increase in quarterly revenue, reaching $81.4 million, and a 12% increase in full year revenue, totaling $322.0 million. The company's gross margin for Q4 was reported at 61.9%, slightly down from 63.1% in the same quarter of the previous year, impacted by a $1.9 million inventory write-off in Europe. The full year gross margin remained strong at 66.4%, with an 11% year-over-year growth in gross profit.
The company's net loss for Q4 improved to $14.6 million, or a negative 18.0% of revenue, compared to a net loss of $19.5 million, or a negative 27.3% of revenue, in Q4 2022. For the full year, ThredUp Inc (NASDAQ:TDUP) narrowed its net loss to $71.2 million, or a negative 22.1% of revenue, from a net loss of $92.3 million, or a negative 32.0% of revenue, in 2022.
Adjusted EBITDA loss for the fourth quarter was $2.1 million, or a negative 2.6% of revenue, a significant improvement from a loss of $5.8 million, or a negative 8.2% of revenue, in the same quarter last year. The full year Adjusted EBITDA loss also improved to $17.4 million, or a negative 5.4% of revenue, from a loss of $43.4 million, or a negative 15.0% of revenue, in 2022.
Operational Highlights and Future Outlook
ThredUp Inc (NASDAQ:TDUP) reported record active buyers and orders for the fourth quarter and full year, signaling strong customer engagement. The company's AI innovation and customer experience improvements, such as faster shipping promises, have contributed to a decrease in return rates and enhanced operational efficiency.
Looking ahead, ThredUp Inc (NASDAQ:TDUP) provided an optimistic financial outlook for 2024, expecting revenue in the range of $340.0 million to $350.0 million and gross margin between 69.5% to 71.5%. The company aims for an Adjusted EBITDA margin of 0.5% to 1.5%, indicating a move towards profitability.
CEO James Reinhart commented on the results, stating,
We closed out 2023 with another quarter of strong financial performance, demonstrating healthy top-line growth and bottom-line leverage. Looking ahead, we are confident that by focusing on strategic growth drivers in the U.S. and applying our proven resale playbook in Europe, we can deliver adjusted EBITDA breakeven on an annual basis in 2024."
Balance Sheet and Cash Flow Statements
The balance sheet shows a decrease in total assets from $301.9 million in 2022 to $249.9 million in 2023. Cash and cash equivalents stood at $56.1 million at the end of 2023, up from $38.0 million the previous year. The company's long-term debt, net of current portion, was reduced to $22.0 million from $25.8 million in 2022.
ThredUp Inc (NASDAQ:TDUP) used $22.6 million in operating activities during 2023, an improvement from $52.1 million used in 2022. Investing activities provided $43.7 million, mainly due to maturities of marketable securities, and financing activities used $3.6 million.
For value investors and potential GuruFocus.com members, ThredUp Inc (NASDAQ:TDUP)'s latest earnings report reflects a company that is navigating the cyclical retail market with strategic growth initiatives and operational improvements. The company's focus on technology and customer experience, coupled with a positive outlook for 2024, may offer an attractive opportunity for those looking to invest in the growing online resale sector.
For more detailed information and analysis, visit GuruFocus.com or access the full earnings report here.
Explore the complete 8-K earnings release (here) from ThredUp Inc for further details.
This article first appeared on GuruFocus.
