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    TDUP
    Earnings call· Jun 2026(Q2 FY26)

    ThredUp Q2 FY26 earnings call TDUP

    Aug 5, 2026 Source

    Executive summary

    ThredUp Q2 FY26 — Strong Buyer Growth Despite Promotional Environment

    ThredUp delivered strong Q2 FY26 results, exceeding internal expectations across revenue, gross margin, and adjusted EBITDA, driven by record new buyer acquisitions and active buyer growth. However, a challenging consumer environment necessitated increased promotional activity, impacting average selling prices and leading to a revised, more cautious outlook for the second half of the year. The company is prioritizing buyer engagement and shifting its customer mix towards more premium segments, leveraging AI for personalization and efficiency, while navigating temporary macroeconomic headwinds.

    Highlights

    5

    • Revenue was $90.8 million, up 16.9% year over year, exceeding internal expectations.

    • Gross margin was 79.9%, up 40 basis points year over year, driven by improved efficiency.

    • Adjusted EBITDA was $4.8 million, or 5.3% of revenue, outperforming internal expectations.

    • Active buyers grew 21% year over year to 1.8 million on a TTM basis, reaching record levels.

    • New buyer acquisitions were up 13.1% year over year, marking the strongest quarter on record.

    Concerns

    5

    • A tougher consumer environment led to incremental promotional activity, resulting in an estimated $3 million headwind to Q2 top-line revenue.

    • Updated full-year 2026 revenue guidance to $344.4M-$348.4M, reflecting 11% YoY growth at the midpoint, due to an anticipated $7 million revenue headwind from promotions in H2.

    • Adjusted EBITDA margin guidance for full-year 2026 updated to approximately 4.7% of revenue, impacted by increased promotions and continued investments.

    • Q3 FY26 revenue guidance of $87M-$89M implies 7% YoY growth at midpoint, a deceleration from Q2.

    • Q4 FY26 revenue guidance of $85M-$87M implies 8% YoY growth at midpoint, further deceleration.

    Guidance & targets

    13
    CategoryTargetConfidence
    Q3 FY26 Revenue
    $87 million to $89 million
    high materiality
    High
    Q3 FY26 Revenue Growth (YoY midpoint)
    7%
    medium materiality
    High
    Q3 FY26 Gross Margin
    78% to 79%
    medium materiality
    High
    Q3 FY26 Adjusted EBITDA Margin
    approximately 4% of revenue
    medium materiality
    High
    Q4 FY26 Revenue
    $85 million to $87 million
    high materiality
    High
    Q4 FY26 Revenue Growth (YoY midpoint)
    8%
    medium materiality
    High
    Q4 FY26 Gross Margin
    77.5% to 78.5%
    medium materiality
    High
    Q4 FY26 Adjusted EBITDA Margin
    approximately 6% of revenue
    medium materiality
    High
    Full Year 2026 Revenue
    $344.4 million to $348.4 million
    high materiality
    High
    Full Year 2026 Revenue Growth (YoY midpoint)
    11%
    medium materiality
    High
    Full Year 2026 Gross Margin
    78.7% to 79.1%
    medium materiality
    High
    Full Year 2026 Adjusted EBITDA Margin
    approximately 4.7% of revenue
    high materiality
    High
    Full Year 2026 Cash Flow
    cash flow positive
    medium materiality
    High

    Operational metrics

    27
    Revenue
    $90.8 millionup 16.9% year over year
    Q2 FY26

    Exceeded internal expectations.

    Gross Margin
    79.9%up 40 basis points
    Q2 FY26

    Result of improved efficiency and logistics.

    GAAP Net Loss
    $5.9 millioncompared to $5.2 million in same quarter last year
    Q2 FY26
    Adjusted EBITDA
    $4.8 million140 basis point increase over last year
    Q2 FY26

    Outperformed internal expectations.

    Cash and Securities Balance
    $57.4 millionstarted quarter with $54.4 million
    Q2 FY26 end
    Capital Expenditure
    $2.7 million
    Q2 FY26

    Similar levels of CapEx investment expected for full year 2026 as in 2025.

    Cash Generated
    $3 million
    Q2 FY26
    Active Buyers
    1.8 milliongrew 21% year over year
    TTM ending Q2 FY26

    Record active buyers.

    Orders
    1.9 millionup 22%
    Q2 FY26
    New Buyers Acquired
    up 13%lapping 72% growth from prior year quarter
    Q2 FY26

    Strongest quarter on record for new buyers acquired, especially promising due to higher expected LTVs.

    Meta Marketing Volume Growth
    130%year over year
    Summer

    Shift from Google PMAX to Meta and Pinterest due to higher LTVs and lower customer acquisition costs.

    Pinterest Marketing Volume Growth
    145%year over year
    Summer

    Shift from Google PMAX to Meta and Pinterest due to higher LTVs and lower customer acquisition costs.

    Premium Bag Items Volume Growth
    32%year over year
    Q2 FY26

    Targeting an even stronger mix by year end through seller incentives and new acquisition channels.

    Direct Listings Items Listed Growth
    89%
    Month over month (since June launch)

    Since opening direct listings to everyone in June.

    Direct Listings Total Items Listed
    more than 100,000
    As of July/August 2026

    Small fraction of total available items, but pleased with steady organic growth and premium mix.

    Real-time Personalization Engine Item Engagement Lift
    5%
    First A-B test

    Driven by AI technology, reads intent within seconds and adapts feed on next fetch of inventory.

    Real-time Personalization Engine Profit Per Buyer Lift
    7%
    First A-B test

    Driven by AI technology, reads intent within seconds and adapts feed on next fetch of inventory.

    Notify Me Opt-ins Growth
    more than 50%
    Week over week since launch

    Feature turns sold-out single SKU items into a reason to come back once restocked.

    Revenue Headwind from Promotions
    $7 million
    H2 FY26

    Expected impact from elevated promotions to prioritize buyer engagement in a challenging consumer environment.

    Revenue Headwind from Promotions
    $3 million
    Q2 FY26

    Estimated impact to top line results due to incremental promotional activity in a tougher consumer environment.

    Basic Weighted Average Shares Outstanding
    approximately 132 million
    Q3 FY26 (expected)

    Guidance for Q3 FY26.

    Basic Weighted Average Shares Outstanding
    approximately 133 million
    Q4 FY26 (expected)

    Guidance for Q4 FY26.

    Basic Weighted Average Shares Outstanding
    approximately 131 million
    Full Year 2026 (expected)

    Guidance for Full Year 2026.

    Two-Year Average Revenue Growth Rate
    16.6%
    H2 FY26 (projected)

    Despite updated guidance, the company projects strong average growth over two years.

    Two-Year Average Revenue Growth Rate
    20.3%
    Q3 FY26 (projected)

    Midpoint of Q3 revenue guidance.

    Two-Year Average Revenue Growth Rate
    13.2%
    Q4 FY26 (projected)

    Midpoint of Q4 revenue guidance.

    Two-Year Average Revenue Growth Rate
    15.5%
    Full Year 2026 (projected)

    Midpoint of Full Year revenue guidance.

    Industry KPIs

    3
    MetricValueDetails
    Gross margin drivers79.9%%
    Active customers nspac1.8 millionbuyers
    Inventory position markdown risk—

    Product announcements

    4
    ProductTypeDetails
    Real-time Personalization Enginelaunch
    Clusteringlaunch
    Exact Matchlaunch
    Notify Melaunch

    Deals & partnerships

    3
    Steve MaddenLaunch of new brand storefront for Resell as a Service (RAS)

    Part of the Resell as a Service (RAS) program, leveraging brand trust for clean out kits.

    Dolce VitaLaunch of new brand storefront for Resell as a Service (RAS)

    Part of the Resell as a Service (RAS) program, leveraging brand trust for clean out kits.

    Betsy JohnsonLaunch of new brand storefront for Resell as a Service (RAS)

    Part of the Resell as a Service (RAS) program, leveraging brand trust for clean out kits.

    Risks & headwinds

    3
    Tougher consumer environmentQ2 FY26 and H2 FY26

    Estimated $3 million headwind to Q2 top line results; anticipated $7 million revenue headwind in H2 FY26.

    Mitigation: Increased promotional activity to drive conversion and maintain buyer engagement; shifting customer mix towards more premium buyers; focusing promotions on aging inventory rather than fresh products.

    Increased price sensitivity among budget shoppersQ2 FY26 and H2 FY26

    Impacts customers making under $60,000 a year (less than 20% of customer base); requires incremental promotions to convert.

    Mitigation: Targeted promotions on older inventory; strategic shift in marketing spend to acquire higher LTV, more premium buyers (Meta, Pinterest); belief that this is a temporary issue linked to factors like gas prices.

    Higher gas pricesOngoing, particularly Q2 FY26 and H2 FY26

    Weighing on budget customers.

    Mitigation: Considered a temporary factor; company is shifting customer mix away from segments most affected.

    What to watch in Q3 FY26

    5

    Revenue Growth (Q3 FY26)

    Q3 FY26
    CurrentQ2 FY26 revenue growth was 16.9% YoY.
    Target7% YoY growth at midpoint ($87M-$89M)

    Why it matters

    This will indicate the immediate impact of increased promotional activity and the challenging consumer environment on top-line growth.

    In the third quarter, we now expect revenue in the range of $87 to $89 million, representing 7% year-over-year growth at the midpoint and a 20.3% two-year average growth rate.

    Q&A highlights

    6

    Why is the guidance cautious given strong Q2 and focus on stickier buyers, and what are current business trends?

    Q2 was a beat, but June and early July showed increased promotional needs for conversion, especially among price-sensitive shoppers. The cautious guide reflects this need for incremental promotions to maintain buyer engagement, particularly for the less than 20% of customers making under $60k/year, which is seen as a temporary headwind.

    “it was grindy out there in June. It was just more challenging to get customers to convert. We saw lots of visitors, lots of traffic, but you could tell that people needed incentives and promotions to convert.”

    asked by Dylan Cardin · answered by James Reinhart

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities and Buyer Acquisition

    ThredUp continues to focus on three strategic priorities: growing and retaining high-value buyers, scaling high-quality premium supply, and developing AI technology. Q2 FY26 saw record new buyer acquisitions, up 13% year over year, building on 72% growth in the prior year. The company is shifting marketing spend from Google PMAX to Meta and Pinterest, where LTVs are higher and customer acquisition costs are decreasing, with volume on these platforms growing 130% and 145% year over year, respectively.

    02

    Supply Side Enhancements and Direct Listings

    Active sellers reached record levels, with the volume of premium bag items increasing 32% year over year, now representing 12% of the overall mix. ThredUp aims for an even stronger premium mix by year-end through seller incentives and new acquisition channels. The direct listings (peer-to-peer) offering, opened to all in June, has seen items listed increase 89% month over month, with over 100,000 items listed at an average price of $80, contributing to a premium mix.

    03

    Resell as a Service (RAS) Expansion

    The company launched three new brand storefronts this quarter: Steve Madden, Dolce Vita, and Betsy Johnson. Each new brand provides access to a new set of sellers and customers with brand affinity, offering a unique distribution advantage. The RAS strategy is focused on elevated brands that serve customers with higher purchasing power, with a big push with Reformation in the spring and more planned for the fall.

    04

    AI Transformation and Real-time Personalization

    ThredUp's AI transformation is now foundational to its operations, driving efficiency and cost leverage by reducing headcount growth and increasing team productivity. The long-term impact is seen in accelerating the speed of product development, testing pricing algorithms, and designing back-end operations. A new real-time personalization engine, reading intent within seconds, drove a 5% lift in item engagement and a 7% lift in profit per buyer for new customers in its first A-B test.

    05

    AI-Driven Product Experience Enhancements

    Several AI-driven product features have been deployed to reduce cognitive shopping friction, especially for new customers. "Clustering" groups visually similar items, and "Exact Match" aggregates listings of the same item into a single product page, allowing users to choose size, color, or condition. These features remove visual redundancy, making secondhand shopping more akin to traditional e-commerce. The "Notify Me" feature, which alerts users when a sold-out item is restocked, has seen opt-ins grow over 50% week over week since launch.

    06

    Navigating Macroeconomic Headwinds

    Despite strong underlying fundamentals, ThredUp adjusted its second-half guidance due to a tougher consumer environment, particularly impacting price-sensitive shoppers. The company chose to prioritize buyer engagement through increased promotions, anticipating a $7 million revenue headwind in H2. This strategic decision aims to build durable, compounding performance without compromising long-term vision for short-term gains, even as the two-year average revenue growth rate for H2 is projected at 16.6%.

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