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    DIBS
    Earnings call· Jun 2026(Q2 FY26)

    1stdibs.com Q2 FY26 earnings call DIBS

    Aug 5, 2026 Source

    Executive summary

    1stdibs.Com Q2 FY26 — Strong GMV Growth and Margin Expansion

    1stdibs.Com delivered strong Q2 FY26 results, surpassing guidance for GMV and adjusted EBITDA margin. This performance was driven by effective product roadmap execution and a re-engineered cost structure, enabling significant margin expansion despite a challenging macro environment and reduced marketing spend. The company achieved its strongest GMV growth since Q4 2024, indicating market share gains independent of a macro recovery.

    Highlights

    5

    • GMV of $96 million, up 7% year-over-year, exceeded the high end of guidance.

    • Adjusted EBITDA margin reached approximately 6%, an improvement of over 13 percentage points versus a year ago and well above guidance.

    • Conversion grew for the 11th consecutive quarter, reflecting compounding product improvements.

    • Average order value expanded 10% year-over-year to approximately $2,850.

    • Sales and marketing expenses were down 34% year-over-year, demonstrating cost efficiency while achieving GMV growth.

    Concerns

    3

    • The U.S. housing market continues to hover near a 30-year low, and high-end furniture demand declined mid-single digits year-over-year.

    • Active buyers were down 10% year-over-year, reflecting deliberate reductions in sales and marketing spend.

    • Free cash flow for 2026 is no longer likely to be positive due to an accounting reclassification related to payment processor agreements.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q3 GMV
    $89M-$94M
    high materiality
    High
    Q3 Net Revenue
    $22M-$22.9M
    medium materiality
    High
    Q3 Adjusted EBITDA Margin
    -1% to +2%
    medium materiality
    High
    Full-year 2026 GMV Growth
    grow year-over-year
    high materiality
    High
    Q4 GMV Growth
    grow year-over-year
    high materiality
    High
    Full-year 2026 Revenue Take Rates
    24% to 25%
    medium materiality
    High
    Full-year 2026 Gross Margins
    72% to 74%
    medium materiality
    High
    Full-year 2026 Adjusted EBITDA
    positive
    high materiality
    High
    Full-year 2026 Free Cash Flow
    no longer likely to generate positive
    high materiality
    High
    Tastemakers Ambassador Program Scaling
    scale significantly
    medium materiality
    High
    Sponsored Events
    host one additional sponsored event
    low materiality
    High
    Pricing Pillar Expansion
    expand into a broader trust initiative
    medium materiality
    High

    Operational metrics

    32
    GMV
    $96Mup 7%
    Q2 FY26

    GMV growth driven by easing traffic declines, expanding average order values, and continued conversion growth.

    Net Revenue
    $23.3Mup 5%
    Q2 FY26

    Net revenue growth despite substantial sales and marketing reductions.

    Gross Profit
    $17.2Mup 8%
    Q2 FY26
    Gross Margin
    73.9%up 210 bps YoY
    Q2 FY26

    Gross margin at the high end of the target range.

    Total Operating Expenses
    $19.3Mdown 11%
    Q2 FY26

    Decline did not come at the expense of product investment.

    Sales and Marketing Expenses
    $5.4Mdown 34%
    Q2 FY26

    Reduction reflects strategic realignment implemented in late 2025 and lower headcount-related expenses.

    Technology Development Expenses
    $6.3Mup 7%
    Q2 FY26

    Increase reflects continued investment in product and engineering in support of the 2026 roadmap.

    General Administrative Expenses
    $6.7Mup 1%
    Q2 FY26

    Reflects ongoing discipline in overhead cost base.

    Provision for Transaction Losses
    $930,000
    Q2 FY26

    In line with historical range.

    Cash, Cash Equivalents, and Short-term Investments
    $67.7Mdown $17.6M sequentially
    Q2 FY26

    Excluding reclassification, cash declined approximately $11.7 million, primarily driven by capital returns.

    Share Repurchases (Q2)
    $11.1M
    Q2 FY26
    Share Repurchases (Since Inception)
    $55.3M
    Since Inception
    Traffic from organic sources
    approximately 75%
    Q2 FY26

    A continued reflection of the enduring strength of the First Hibs brand.

    Average Order Value (AOV)
    $2,850up 10% YoY
    Q2 FY26

    Reflects trust buyers place in the platform for high-end transactions.

    Median Order Value
    $1,500up 10% YoY
    Q2 FY26

    Indicates order value expansion is broad-based, excluding outlier transactions.

    Active Buyers
    approximately 57,700down 10%
    Q2 FY26

    Reflecting the deliberate reduction in sales and marketing spend enacted in late 2025.

    Unique Sellers
    approximately 5,700flat sequentially
    Q2 FY26

    Reflecting continued stabilization following 2024 and 2025 pricing actions.

    Listings
    nearly 1.9Mup 1% YoY
    Q2 FY26

    Providing buyers with a deep and expanding catalog of one-of-a-kind inventory.

    Non-endemic Advertising Revenue
    $270,000
    Q2 FY26

    Related to the first DIBS50 sponsorships, an early but tangible contribution from this nascent revenue stream.

    Trade Grades (Commission Rate)
    declined approximately 30 bpsYoY
    Q2 FY26

    Largely driven by a mixed shift to higher value orders which carry a lower blended commission rate.

    Freight Pre-quote Coverage
    90%
    Q2 FY26

    More items now show an upfront shipping cost, reducing purchase friction.

    Parcel Rates Optimization
    up to 8% cheaper
    Q2 FY26

    Directly improves economics of transactions and reduces a barrier to completing a purchase.

    AI-assisted Development
    over 70%up from over 50% last quarter
    Q2 FY26

    Enabling the team to ship faster than ever.

    Instagram Following
    over 1M
    Q2 FY26

    Result of the Tastemakers Ambassador Program.

    Instagram Reels Production
    doubledYoY
    Q2 FY26

    Result of the Tastemakers Ambassador Program.

    Instagram Total Video View Time
    tripledversus Q1
    Q2 FY26

    Result of the Tastemakers Ambassador Program.

    Price Parity Coverage
    doubled
    Q2 FY26

    Using AI to identify and flag inconsistently priced items, leading to increased sell-through rates for corrected items.

    Conversion
    grew11th consecutive quarter
    Q2 FY26

    Reflecting compounding product improvements and giving confidence in the roadmap.

    Order Volume
    grew sequentiallydeclined YoY
    Q2 FY26
    Consumer and Trade GMB
    both grewYoY
    Q2 FY26

    Platform gaining traction across buyer types independent of the macro environment.

    Luxury Home Furnishings Market
    declined mid-single digitsYoY
    Q2 FY26

    Based on syndicated credit card data, indicating a challenging macro environment.

    Market Share
    —
    Q2 FY26

    Management believes they gained market share in Q2 based on credit card panel data.

    Industry KPIs

    2
    MetricValueDetails
    Advertising revenue take rate$270,000USD
    Operating income EBIT and adjusted EBITDA$1.3MUSD

    Product announcements

    5
    ProductTypeDetails
    Image Searchlaunch
    Personalized Homepage Recommendationslaunch
    Overhauled Favorites Experienceupdate
    AI-powered Customer Service Chatbotlaunch
    Improved Item Listing Creation Processupdate

    Deals & partnerships

    1
    Miele, House of Roll, SeracPaid event sponsorships for the first DIBS50 annual celebration

    Partnerships allowed these brands to reach an audience of top interior designers and high net worth buyers, which they cannot easily access elsewhere. This marks the first time paid sponsorships were introduced for the event.

    Risks & headwinds

    4
    Challenging Demand EnvironmentOngoing

    U.S. housing market near a 30-year low; high-end furniture demand declined mid-single digits YoY in Q2.

    Mitigation: Company's 2026 GMV growth expectation does not depend on a macro recovery; product improvements are driving market share gains independent of macro conditions.

    Traffic HeadwindOngoing

    Traffic declines moderated relative to Q1, but still a headwind; sessions were flat sequentially.

    Mitigation: Focus on product improvements (discovery, personalization) and organic sources (75% of traffic from organic sources); scaling Tastemakers program to build organic reach.

    Free Cash Flow Impact from Accounting ReclassificationFY26

    No longer likely to generate positive free cash flow for 2026.

    Mitigation: Reclassification has no economic impact, only a presentation change; underlying business is generating cash ahead of original expectations.

    Macroeconomic Conditions Stability AssumptionFY26

    Assumption that macroeconomic conditions, particularly those impacting the housing market and consumer discretionary spending, remain stable.

    Mitigation: Company's strategy is designed to grow independent of macro recovery, but a significant deterioration could still pose a risk.

    What to watch in Q3 FY26

    5

    Tastemakers Ambassador Program Scaling

    H2 FY26
    CurrentInstagram following >1M, Reels production doubled YoY, video view time tripled QoQ
    TargetContinued significant scaling and impact on S&M efficiency

    Why it matters

    This program is key to building organic reach, brand affinity, and improving the efficiency of paid media, crucial for new buyer acquisition.

    We plan to scale the tastemaker program significantly in the second half of 2026.

    Q&A highlights

    4

    What new growth or cost initiatives are planned for the coming quarters to continue bolstering results, building on the strong Q2 performance?

    Management highlighted that growth is driven by their product roadmap, which is ahead of schedule. The focus for H2 2026 is broadening the deployment of foundational improvements across discovery, trust, shipping, and service. This includes rolling out new ML models for personalization, expanding trust initiatives beyond pricing, improving shipping transparency and cost, and scaling the AI-powered customer service chatbot.

    “the first half has really been focused on building a foundation in our four primary areas of focus. And then the second half of the year is going to be focused on broadening the deployment of those across as many service areas as possible.”

    asked by Robert Brooks · answered by David Rosenblatt

    2 min read6 chapters

    Detailed Narrative

    01

    Product Roadmap & AI Integration Driving Growth

    1stdibs' 2026 roadmap, focused on discovery, pricing, shipping, and service, is proving effective, driving GMV growth ahead of expectations. AI-assisted development now constitutes over 70% of new code, up from 50% last quarter, accelerating feature deployment. Key advancements include the June launch of image search, Q2 rollout of personalized homepage recommendations with highest-ever click-through rates, and an AI-powered customer service chatbot pilot resolving a meaningful share of inquiries.

    02

    Market Share Gains Amidst Macro Headwinds

    Despite a challenging macro environment, including the U.S. housing market near a 30-year low and mid-single-digit declines in high-end furniture demand, 1stdibs believes it gained market share in Q2. This outperformance is attributed to product improvements and operational efficiencies rather than a macro recovery. The company's GMV growth expectation for 2026 does not rely on an economic rebound, positioning it to benefit further when conditions normalize.

    03

    Successful Cost Structure Re-engineering

    The systematic re-engineering of the cost structure from 2022-2025, involving headcount reductions and expense rationalization, is yielding significant results. Q2 demonstrated that revenue recovery now flows disproportionately to the bottom line, with adjusted EBITDA margin reaching approximately 6%. This was achieved despite a 34% year-over-year reduction in sales and marketing expenses, highlighting the effectiveness of the strategic realignment.

    04

    Enhanced Buyer Trust and Experience

    Initiatives to build buyer confidence include doubling price parity coverage using AI, expanding ML-powered freight pre-quote coverage from 50% to 75% (90% overall), and optimizing parcel rates by up to 8% in certain categories. The company plans to expand its pricing pillar into a broader trust initiative in Q3, addressing authenticity, seller quality, and platform integrity to further drive conversion.

    05

    New Revenue Streams and Audience Monetization

    1stdibs successfully introduced paid event sponsorships for the first time during its ninth annual first DIBS50 event, partnering with Miele, House of Roll, and Serac. This validates the commercial value of their curated audience of top interior designers and high-net-worth buyers, providing a new monetization channel. The company plans to host one additional sponsored event in 2026 and scale events in the future.

    06

    Tastemakers Ambassador Program Success

    The pilot of the Tastemakers Ambassador Program in Q2 yielded tangible results, including an Instagram following topping 1 million, doubled Reels production year-over-year, and tripled total video view time quarter-over-quarter. This content strategy is improving the efficiency of paid media by expanding reach and reducing cost per ad impression, making new buyer acquisition more efficient. The program is slated for significant scaling in H2 2026.

    AI-generated summary of the company’s earnings call. Not investment advice.