Q1 2025 ThredUp Inc Earnings Call

Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the ThredUp First Quarter 2025 earnings conference call.

At this time, all lines are in listen only mode [inaudible]

Speaker Change: Following the presentation, we will conduct a question and answer session

Speaker Change: If at any time during this call you require immediate assistance please press

Speaker Change: This call is being recorded on Monday May 5th of 2025.

Speaker Change: I would now like to turn the conference over to Lauren Frasch, please go ahead.

Lauren Frasch: Good afternoon, everyone, and thank you for joining us on today's conference call to discuss ThredUp's first quarter 2025 financial results. With me, our James Reinhart, ThredUp, CEO and co-founder, and Sean Sobers, CFL. We posted our press release and supplemental financial information on our investor relations website at ir.thredUp.com.

Lauren Frasch: This call is being webcast on our IR website and a replay of this call will be available on the site shortly.

Lauren Frasch: Before we begin, I'd like to remind you that we will make forward-looking statements during the course of this call.

Lauren Frasch: Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties.

Lauren Frasch: Actual results could differ materially. Please refer to our earnings release, the supplemental financial information, and our forms 10K and 10Qs for more information on these expectations, assumptions and related risk factors. We undertake no obligation to update any forward-looking

Lauren Frasch: During this call, we will present both gap and non-GAAP financial life.

Lauren Frasch: Reinhart. A reconciliation of non-gap-to- GAAP measures is included in today's earnings press release and the supplemental financial information, which are distributed and available to the public through our Investor Relations website located at ir.spyup.com.

James Reinhart: Now, I'd like to turn the call over to Dana. Dana? Yes.

James Reinhart: Good afternoon everyone, I'm James Reinhart, CEO and co-founder of ThredUp. Thank you for joining our first quarter of 2025 earning stall.

James Reinhart: We are pleased to share ThredUp's financial results for Q1 and update our expectations for Q2 and fiscal year 2025. I will provide a high level summary of our improving financial profile to spend the majority of my time commenting on the macro environment and our approach to navigating this unique time for ThredUp.

James Reinhart: I will discuss key ongoing innovation in our AI-driven product experience and update you on our evolving raw strategy.

James Reinhart: I will then hand it over to Sean Sobers, our Chief Financial Officer, to talk through our first quarter of 2025 financials in more detail and provide our outlook for the second quarter in full year 2025. As always, we'll close out today's call with a question and answer session.

James Reinhart: Active buyer worth turned positive on a trailing 12-month basis and was up 5.7% year-over-year. But most importantly, new buyers acquired in the quarter were up 95%.

James Reinhart: from Q1 2025 over Q1 2024. This positive acquisition trends has continued early in Q2, with April being the strongest new customer acquisition month in our history.

James Reinhart: Our approach in 2025 is simple. Maintain our gross margin and bottom line efficiency and reinvest incremental dollars we generate back into growing new buyers and sellers in our marketplace. We believe this creates the greatest long-term shareholder value.

James Reinhart: Turning to the macro, our financial results in Q1 exceeded our expectations and we believe this had very little to do with the macro environment.

James Reinhart: Given the announcements of successive rounds of tariff and the closure of the Diminimous Loophole only were made public on April 2nd, and were to go into effect on May 2nd or later, it is hard to observe any directly correlated impact.

James Reinhart: If our customer base remains resilient, while tariffs drive increases in new apparel prices, these changes could add incremental benefit to our current business trajectory, for the following

James Reinhart: First, by far the most impactful to ThredUp is the closure of the Diminimous Loophole. This is a policy change we have been advocating for over the course of the past few years.

James Reinhart: While we expect Harris-induced disruptions to global trade to normalize over time, we do not anticipate a broad rollback of the unanimous loophole closure.

James Reinhart: Duty-free, ultra-fast fashion, this flooded the US market over the past few years, undoubtedly puts some pressure on our price competitiveness.

James Reinhart: We believe the closure of the diminished exemption is likely to cause higher prices for these goods and to reduce production volumes, both of which could be a positive for ThredUp.

James Reinhart: Second, the increase in the price of a peril that could result from broad-based tariffs in key overseas manufacturing hubs could be a tailwind. If the price of new clothing goes up because of these tariffs, we believe this enhances the comparative value proposition for consumers who shop for use clothing on ThredUp.

James Reinhart: Third, large ad buyers on Met and Google, like Sheen and Timo, have announced a reduction in their advertising spend, and this should reduce the escalation we have seen in advertising costs.

James Reinhart: In some cases, we might see customer acquisition advertising costs come down. This is what we've seen in April , though we anticipate markets to efficiently reprise over time.

James Reinhart: Finally on the macro piece, I would reiterate that our business was accelerating before the trade disruptions were introduced in early April . And while we can't predict the future, we want to underscore our fundamentally improving growth and profit profile, tariffs and diminimous closure aside.

Now, I'm turning to the proud of the experience.

James Reinhart: Across the product experience, with our inventory of 4 million plus items to change every day, we have continued to augment the customer experience with an AI first mentality.

James Reinhart: Improving our core search and discovery infrastructure is key to building out the next set of customer facing product features that makes drifting more joyful. Let me give you a few examples of enhancements we've launched in just the past 60 days.

James Reinhart: First, customers can now effortlessly pivot from items they love to similar styles, shop from any inspiration source, and put together outfits on any conceivable theme.

James Reinhart: Are Expanded Discovery Tools Mean Customers Rarely Quote Miss Their Chants

to purchase a coveted style [inaudible]

James Reinhart: When items are sold or held in someone else's cart, a new powerful visual search is just one touch away for items that are just like that item or even better.

James Reinhart: Sessions where a customer uses our updated shop similar feature have a 64% higher conversion rate as it helps customers discover even more of what they already love.

Next, we're developing fully personalized pathways for product discovery.

James Reinhart: ThredUp is benefited from having a personalized item sort for many years, but our recently upgraded personalized sort is created by incorporating data from every user interaction into unique information-rich customer profiles that we then match against our deep catalog to find the most relevant files.

James Reinhart: Each day we're serving up many hundreds of thousands of personalized product listing pages powered by our in-house recommendation engine.

James Reinhart: In addition, updated tooling that launched last month is making discovering brands far far better. It leverages our massive database of customer interactions.

James Reinhart: Across all the AI-powered discovery initiatives that we've developed over the last year and half, including Visual Search, Style Chat, Image Search, Shops and More and more, we see encouraging signs that we are reshaping browse behaviors.

James Reinhart: Instead of doubling down on well-established and utilitarian e-commerce shopping patterns,

James Reinhart: We're creating new product discovery paths and augmenting existing ones to help make drifting our vast catalogue feel like shopping at your own personal beauty.

James Reinhart: And finally, beyond optimizing the core product experience, we're launching new ways for customers to shop their favorite styles and trends.

James Reinhart: In early April , we launched an AI-powered shopping experience for customers to link their social media inspiration from Instagram and elsewhere and receive curated aesthetics, styles and brands to shop on ThredUp.

James Reinhart: The shop's social feature is currently in beta in the ThredUp iOS app, and we're seeing strong early signals, including nearly four times higher conversion than non-AI searches.

Now, turning to the seller side of our marketplace, [inaudible]

James Reinhart: We are making some substantial investments across the seller experience with our ambition to make ThredUp the default place to sell second hand clothing online, expanding our tan, and at the same time, our sustainability impact.

James Reinhart: Our strategy involved expanding the number of ways customers can sell and the frequency with which they want to sell on ThredUp.

James Reinhart: For premium sellers, we are continuing to refine their dashboard and seller tools to make it easy for those with premium items to feel confident selling on DredUp.

James Reinhart: Premium continues to grow as a mix of items processed, and contribution margins from premium items sold are 60% higher than regular items sold.

James Reinhart: Our previous selling experience was designed for episodic cleanup kit selling alongside regular buying

James Reinhart: We are now innovating to what buying and selling follow a more rhythmic in-out pattern, that we think fits with how the modern consumer thinks about circularity. Buy a few items, sell a few items, repeat.

James Reinhart: Last quarter we launched the ability for customers to sell items alongside any returns they were making on ThredUp, leveraging not just the shipping, but importantly the psychology of getting rid of things to make room for new things.

James Reinhart: Already 8% of returns now include items for retail and on average customers are including 9 items in those returns.

James Reinhart: And finally, let me turn to resell at the service, we're rast [inaudible]

James Reinhart: I wanted to share a more detailed update on our RAS strategy. Over the past year, we've seen the market evolve in ways we think are counterproductive to building scalable, circularity business models.

James Reinhart: A lot of what's being counted as resale is overstock and customer returns, masquerading a second-hand

James Reinhart: This is largely because brands have been unable to scale their take back in circularity programs.

James Reinhart: And are left with no choice but to fill their shops with other branded products. In reality, they are paying software, management, and consulting fees for programs that are doing very little to build native circularity into their strategies.

James Reinhart: In short, we think branded resale is being held back by the lack of sophisticated technology and operations.

James Reinhart: So we've decided to begin open sourcing our front end technology and back end logistics chain to encourage brands to make a bigger impact. We believe value for this ecosystem is created in the operations and technology layer to ingest secondhand items at scale and make them available for resale as efficiently as possible.

James Reinhart: This has never been more relevant than it is today, as brands navigate global supply chain

James Reinhart: We're excited to pioneer the next generation of branded refill, pairing free branded to resell shops with clean-out programs that significantly reduce barriers to entry for brands

James Reinhart: We expected these shops will not just help brands expand inventory listings, they will also be more reflective of the brands aesthetic, with catalog data and imagery, enhanced customization, optional cleaning and repair, and are built in ever-improving AI search and discovery technology.

James Reinhart: Alongside these free refill shops, we were also lowering our usage-based fees on our clean-out programs to support brand loyalty and allow brands to grow their second-hand inventory, ensuring a consistent supply of quality items for sale.

James Reinhart: We also plan to provide broader marketing support, including new modules on ThredUp.com to promote brand-of-custom requisition and retention.

James Reinhart: We believe branded resale scales better when it's designed with a simplified performance based model that aligns revenue sharing and usage based fees with brand success.

James Reinhart: Over the long-term, as Brandon Riesel becomes more prevalent in the industry, we believe the ecosystem will benefit from a powerful, affordable quote, the universal re-commerce layer.

James Reinhart: A kind of what Amazon Web Services has done for cloud services or Shopify has done for small businesses.

James Reinhart: This can enable any brand to do everything they need across the resell ecosystem.

James Reinhart: We remain more ambitious than ever as we begin the next chapter of RAF.

James Reinhart: With that, I'll turn it over to Sean to talk through the financials in more detail.

Sean Sobers: Thanks James, I'll begin with an overview of our results as follow-up with guidance for the second quarter in full year of 2025.

All reported results are from continuing operations unless otherwise noted.

Sean Sobers: I will discuss non-GAAP results throughout my remarks, our GAAP financial s and a rick-into-lation between our Gap and non-GAAP measures are found in our earnings release, supplemental financials, and our 10Q filing.

Sean Sobers: We are truly proud of our Q1 results for the first quarter of 2025 revenue totaled $71.3 million and increased a 10.5% year-over-year.

Sean Sobers: Our outperformance was driven by the significant investment into marketing and inbound processing we made in order to drive our marketplace flywheel.

Sean Sobers: These investments resulted in our strongest quarter for new buyer acquisition in the company's history. The new buyer is up 95% year-to-year.

Sean Sobers: This performance inflected our total active buyers to growth for the first time in over a year.

Sean Sobers: We finished the quarter with 1.4 million active buyers for the trailing 12 months, up 5.7% over last year, while orders were up 16.1% over last year to 1.4 million.

Sean Sobers: For the first quarter of 2025, Grossmargin was 79.1%, a 100 basis point decrease versus the same quarter last year, has a result of the strength of our new buyer growth that new buyers require a higher incentive to invert on their first purchase.

Sean Sobers: We called out this dynamic on our last earnings call and continue to expect acquisitions to impact gross margins throughout the year as we plan for robust new customer growth.

Sean Sobers: Adjusted to $1 was $3.8 million or $5.3% of revenue for the first quarter of 2025.

Sean Sobers: We doubled our adjusted EBITDA dollars versus last year, representing a 240 basis point margin improvement, as we leveraged our multi-year investments and benefited from our revenue out performance.

Sean Sobers: As our moments in accelerated through March, we were unable to spend marketing and processing fast enough, driving our eva.b.

Sean Sobers: The strengths of the beat illustrate how our marketplace model generates powerful margins flow through on incremental reps.

Sean Sobers: Turning to the balance sheet, we began the first quarter with $52.8 million in cash and securities and ended the quarter with $55.4 million, generating $2.6 million in cash.

Sean Sobers: Three cash flow for the quarter was $3.9 million, a record level of quarterly free cash flow driven by $5.7 million in cash flow from operations.

Sean Sobers: We spent $1.8 million on CAPEX and Q1, and continued to expect maintenance CAPEX levels of approximately $8 million in 2025.

Sean Sobers: Now I'd like to provide a bit of context for our updated guidance.

Sean Sobers: We delivered a significant revenue beat in the first quarter and we are flowing that through the full year revenue outlook.

Sean Sobers: So we remain cautious given the current volatile and uncertain consumer environment. We are pleased to be raising our top line expectations for the balance of the year to align with the positive trends we are currently seeing in the business.

Sean Sobers: We also delivered a strong beat on Q1 and Justin Ebedach, which we are flowing through to our raceful year guide. However, we are maintaining our profitability expectations for the remainder of the year as we continue to focus on driving growth.

Sean Sobers: As we discussed on our last call and demonstrated in Q1, our priority this year is to accelerate our top line To do this we will continue to lean into the key drivers of our marketplace flywheel growing active buyers through marketing and fresh listing through in down processing

Sean Sobers: With contribution margins in the low 40% range and the current ad market becoming less competitive, we see even more opportunity to continue to invest ad dollars that uphold our long-held 12-month payback.

Sean Sobers: As we send more on marketing and drive new buyers to the site, they are simultaneously investing an inbound processing to bring in a broad selection of fresh high-value items to delight and convert our buyers.

Sean Sobers: With all this in mind in the second quarter we expect, revenue in the range of 72.5 to 74.5 million dollars representing 10% growth at the midpoint.

Gross Margin in the range of 77 to 79%

Sean Sobers: Adjusted EBDA of approximately 3.3% of revenue in line with current expectations.

Sean Sobers: and Basic Weighted Average Chair's Outstanding of Approximately 119 Million Shares

Sean Sobers: For the full year of 2025, we now expect Revenue in the range of $281 to $291 million, reflecting 10% growth at the midpoint.

Sean Sobers: This updated view is $11 million above our previous guidance, incorporating our Q1B and a raised outlook for the remainder of the year.

Gross Margin in the range of 77-79% .

Sean Sobers: I just hit Eva Dove approximately 4% of revenue. This reflects our Q1D while we are holding our assumptions for the remainder of the year to be broadly similar to our previous outlook.

Sean Sobers: And basic weighted average share is outstanding of approximately 122 million shares.

Sean Sobers: Inclosing, we are truly proud of our Q1 performance. The momentum we're seeing in the business provides us with increased confidence in our ability to deliver accelerated revenue growth and reach positive annual pre-cash flow this year.

Sean Sobers: This progress is being fueled by our near-term investments in marketing and processing and our multi-year investments in our infrastructure, technology and software.

Sean Sobers: All of which will move us closer to our long-term targets.

James Reinhart: Change and I are now ready for your questions. Operator, please open the line.

Thank you.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.

James Reinhart: Should you have a question? Please press star 1 and your touch stone phone.

James Reinhart: You will hear a prompt that your hand has been raised.

James Reinhart: Should you wish to decline from the polling process? Please press star 2.

James Reinhart: If you're using a speaker phone, please lift the handset before pressing any keys. One moment please for your first question.

Your first question comes from Ike.

Boruchow of Wells Fargo. Your line is already open.

Hey, um...

Good afternoon, congrats guys, great performance and a tough tape, so...

Speaker Change: I think it's two questions. Maybe James is a bigger picture for you to start. I guess just, you know, to ask what's really driving, in your opinion, what do you think is driving the buyer and revenue outperformance in a way that maybe you think is sustainable for the rest of the year. And I just really want to understand what gives you the confidence in raising revenue is not something we're seeing anywhere in the space right now. So just kind of what gives you the confidence to underpin that in this highly uncertain environment. And I think it's something that's really, really, really, really, really sustainable for the rest of the year.

Speaker Change: Yeah, I mean, I think if you go back to our Q4 earnings, we were really seeing a new trajectory in the business in Q4. And I think on that call, we...

Speaker Change: We were a little cautious around, hey, is this momentum going to continue into Q1? And we've just continued to see that momentum.

Speaker Change: in the business, specifically around new buyer acquisition, and then the progress we're making on the supply side, continuing to process and operations. And that's really the two ingredients. And so...

Speaker Change: There's nothing that we look at across the KPIs and the business that suggests that the business isn't continuing to execute at a very high level and so I think that gives us a lot of confidence across our cohorts.

Speaker Change: across our operations, across the Unite Economics, everything is really fundamentally sound and I think, you know, we're feeling pretty good about the rest of the year.

Speaker Change: Got it, then a quick follow-up for Sean, I think you had given us [inaudible]

Speaker Change: Some puts and takes on the remainder of the year and the flow of the year. I guess I want to double check that do certain things still apply, most specifically are you still expecting Q3 to accelerate from QQ in revenue and are you still expecting 3Q to be the high point of the year on EBITDA margin and then conversely expecting Q4 to kind of fall back down a bit.

Speaker Change: So I would say yes on the first one, Accelerate Revenue from Q2 to Q3. I think with the Outperformance needed to die in Q1, I would expect it.

Speaker Change: Q3 to be more in the four-and-a-half-ish kind of range as far as EBITDA, so slightly down from Q1, and then come back down and dip down to mass our full-year guide of around 4% EBITDA.

Gallic, cool, thank you guys. Excellent thanks.

Your next question comes from Dana Telsey of Telsey Group

Your line is already open.

Hi, congratulations on that new customer acquisition.

Speaker Change: Any demographics surrounding who you're getting in terms of new customers, where they're from, any more color around it, and then in terms of the marketing spend, how do you plan to keep this momentum going? And James, do you feel given the fact that what's happening with the potential for tariffs?

Speaker Change: The opportunity for marketing and capturing the retail opportunity and what you're saying is how you see the rest of the year progressing and what it could mean for 2026. Thank you.

James Reinhart: Sure, hey Dana. Yeah, I'm on the customer side. You know, I think it's it's

What's been really exciting is to see how efficiently...

James Reinhart: We've been able to drive customers into the funnel, you know, cacks have been as good as they've been in some time, and that's really being driven from just a better product experience. And so, you know, we're able to drive sessions efficiently, you know, get people to the site and then it's really the product.

James Reinhart: the conversion rate that's really driving a lot of the momentum. And so, from a demographics perspective, these are a lot of the...

James Reinhart: Middle-to-operate income customers, which was a ship we made coming out of the pandemic, so that continues to be true. As for marketing spend momentum

James Reinhart: You know, I think Q1 was very strong, we talked about April being the best acquisition month.

in our history, and so we will continue to spend...

James Reinhart: You know, if the paybacks are attractive and right now they are attractive, I think she and and team who pulling out some of their spend in the US is certainly to then entail and you know the back half of April and you know we'll see as tariffs that are flowed through the rest of retail but

James Reinhart: You know, if the consumer holds up, I could see it being a tailwind for us on the acquisition side, but you know we'll sort of have to see how those dynamics unfold, but I think we're feeling good about the growth and efficiency momentum in the business.

James Reinhart: Got it, and then category wise, what performs, what did you see that was most in demand? And is anything changing on the pricing side? Thank you.

James Reinhart: Yeah, nothing changing specifically on the pricing side, although the mix of goods, you know, I think as we mentioned with our confinement premium business, the mix of goods is a little bit higher price, but no structural change really on [inaudible] you know, you know, you know, you know

James Reinhart: on the pricing side. And then, you know, dresses continue to be our number one category, you know, large share of the business. And I think if we got through N2Q1 and into April , I think we had an incredible assortment, you know, the right mix of goods at the right price.

James Reinhart: Combined with all of the search and AI infrastructure and I think that's a recipe for success so I think throughout the activities that the business is executing I think that's what's making it work.

Thank you.

Speaker Change: Your next question comes from Dylan Carden of William Blair. Your line is already open.

Speaker Change: Thank you. Jane, do you spoken before about kind of the philosophy around marketing stand? I guess

to check in is the idea here?

Speaker Change: Particularly given what you're seeing in this quarter and the outlook to kind of keep it as this high teens level and drive leverage, I guess, across the other parts of S.G.N.A. And to that point, he's walked through some of the leverage that you are seeing now beyond marketing.

Speaker Change: Yeah, Dylan, I mean, that is the approach. I mean, I think we, you know, as we said in the prepared remarks, we really want to take the incremental flow through and invest that back, you know, into top line growth, given the efficiency. We're seeing CACs.

Speaker Change: Tax are good, paybacks are strong, and so we can put more and more dollars to work, and I think that you know, 19, you know, 20% of revenue makes this is probably where we're headed.

Speaker Change: And as our contribution margins have improved over the past few quarters, you're just seeing that the more revenue we generate, the better the business can get at the bottom line. And so we're trying to get that flywheel spinning even faster and then continue to leverage.

Speaker Change: S-G-N-A, and everything else below the line. And then I think that was the recipe in Q1. And we'll do more of that as we move throughout 2025.

And on the AI initiatives.

Speaker Change: Is there anything underway or could you get sharper on pricing and selection through some of these maneuvers?

Speaker Change: Yeah, I mean, I think it's something we, you know, we have an incredibly talented.

Speaker Change: You know, marketplace optimization team that's looking at pricing and treatment groups every day so on any given day we're running you know half a dozen different you know large scale pricing experiments and so we're really always trying to optimize

Speaker Change: You know, margins that ThredUp will also delivering incredible value to the buyer and then, you know, value to the seller. So I would say Dylan there's a constant optimization there to make the parts of our marketplace work and I think.

Speaker Change: Similar to Q4, we're having success, you know, processing the volume of goods that we need, acquiring buyers, dividing those buyers and getting that five little turning, and I think, you know, that's the plan in Q2.

Dylan Carden: Awesome, and then just quickly, just I get why your model is sort of competitively positioned here but

Speaker Change: Spiced, how do you kind of work through the puts and takes of that as a relates to your end customer? I guess maybe it's higher income or that inflation would be disparate or not evenly spread across any thoughts that would be helpful then.

Spike: Yeah, Dylan, I think it's a great pattern match back to what happened in, you know, in 22 with inflation. I think what's fundamentally different now is back then, we, you know, remember we had very large backlogs.

We couldn't process [inaudible]

Spike: The volume of goods that we needed to maintain the growth rate. And I also think our margins and contributions didn't flow through at the same rate. And so we were really struggling to put the kind of growth.

Spike: You know, the growth ingredients together, whereas I think now we're in a position where incredible supply coming online, you know, processing power, we don't obviously have any of the health. [inaudible]

Spike: Risk concerns of having people in our distribution centers and so in a world where you're able to process lots of goods online and the customers looking for value, I think ThredUp has that value in space and so I think we can really delight the customer and then on top of that if you add that in other areas. Thank you very much.

Spike: You know, big retailers pulling back on marketing spend, you can combine great inventory selection, great value with very efficient customer acquisition dynamics. And so I think even in a time when consumers are feeling a little bit more pinched, I think relative to everyone else, I think we'll be very well positioned.

Excellent, thank you very much.

Speaker Change: Your next question comes from Bernie McTernan of Needham & Company. Your line is already

Bernie Mcternan: Great tap. Thanks for taking the questions. Just wanted to start on Revenue and the Guidance.

Bernie Mcternan: James, the Preparity Marks mentioned really no impact on the consumer from the macro environment, but certainly hinted at how the current in a care of environment could be supportive.

Bernie Mcternan: For the company and demand trust, you just want to double click in terms of what the macro expectations are that are embedded in the guidance for QT in the year.

Speaker Change: Yeah, I'll talk here, and then I'll let Sean talk about the guy in particular, Bernie. Yeah, I mean, I think, you know, the announcement came in early April , right? Many of these things were not set to take effect until just a few days ago. I think there's still a lot of volatility around what's...

Speaker Change: You know, what's what's going to be passed through to the customer which is versus what's going to be, you know, eaten by by other companies in our in the parallel space. So I, the short answer is I'm not entirely sure how it will all play out. But one thing I can be sure of is that ThredUp does not, if not specifically directly exposed to tariffs.

Speaker Change: So our value proposition, which I think is already resonating with customers . . .

Speaker Change: At worst, it's the same as it's been, at best our value proposition relative to others

Bernie Mcternan: And so I think that's sort of our take for Q2 and for the rest of the year. And then I think the other piece that gets bundled in there, Bernie, is...

Bernie Mcternan: The Diminimus Exemption, which I think functions a little bit differently than Tara, but we think

Bernie Mcternan: Something we've been advocating for some time and I think makes us more competitive .

Bernie Mcternan: When the playing field is a level. But I'll turn it over to Sean and talk about with him in bed and in the guide. Yeah, Bernie on the guide, we have no tailwinds related to tariffs. And then we also have no assumption there's a recession or anything like that too. It's kind of based on everything we're seeing in the business all the way through yesterday.

And you're certain. And then this is all of that.

Bernie Mcternan: Presley's meant to say you want the shop social and equal, so it's beta right now, just one to that go more live and you know what's the early, you know, for how consumers are engaging with that and expectations for the kind of demand and engagement it can drive.

Speaker Change: Yeah, Bernie, I'm personally super excited by it. I think there's always been a big gap between where customers get their inspiration on social platforms versus how it really feels to shop. And I think this...

Speaker Change: is one of the first products out there that I've seen that really natively pulls them together and so it can be that only as we work through some of the user journeys making sure that everything is buttoned up.

Speaker Change: in the display. And so, I expected to be out widely to everyone shortly.

Speaker Change: And then, really, to do more of a marketing push to tell customers that we have it. We've been a little bit subdued.

Speaker Change: in our product marketing around it. But at least the customers that we're talking to and the customers we've been on this journey as we've built it, I think are very complimentary of the experience.

Speaker Change: And so I think it's going to be great for ThredUp and great for our customers and should drive in a strong conversion and order value. So yeah, I'm quite bullish on it, consequently.

Great, thank you both.

Your next question comes from Kuhnaul.

Madhukar, Water Tower Research [inaudible]

Your line is already open [inaudible]

Speaker Change: Hi, thank you for taking the questions. Hearing great things about the buyer's start, wanted to explore the seller side of the business and any trends that you're seeing on the selling side, especially post the tariffs.

Speaker Change: Irwin consumer confidence has been has been eroding, she could talk about the seller trend.

Yeah, it could also.

Speaker Change: Yeah, on the seller side, yeah, when we continue to see good momentum across the selling part of our business, I mean we couldn't drive by our growth.

Speaker Change: Right, without having access, you know, to high quality and growing amounts of supply. And so I think at the core, the engine is working very well. And then I think where we're spending time is optimizing.

Speaker Change: The various experiences across the cellar experience such that it's a great opportunity for sellers in this environment so you're seeing growth in our consignment premium offering.

Speaker Change: Which is coming in with much better contribution margins. We talked about being able to sell in-year returns and that was a product that was launched

You know, just recently and has gotten really fast adoption.

Speaker Change: Almost 9% now of orders I think are coming back with some items selling so I think we're continuing to push new and novel ways for sellers to engage.

Speaker Change: because to meet our buyer of growth targets, you know, we need really need to make sure that sellers are on the platform and dumb, so.

So, significant investments there.

Speaker Change: Great. And then a quick follow up on the average revenue per order, we declined about 5%. Now some of that would definitely be because of discounts that you offer for first time customers. Is there any pricing pressure or are the prices in general kind of going up?

Speaker Change: Yeah, there's no pricing pressure there. That's just a mix of new buyers versus existing buyers. So new buyers tend to have slightly lower net revenue per order because of the promotion that they get a new customer. So when you have an explosive growth in new buyers, like we experienced in Q1, you know, that would drag County average. [inaudible]

Great, thank you so much.

Speaker Change: There are no further questions of this time. I would hand over the call to James Reinhart for closing remarks. Please go ahead.

Well, thank you all for joining our call today.

Speaker Change: Thank you for the good questions. It's incredibly exciting time for ThredUp right now and I look forward to sharing some more progress with you in the future. And I want to end by thanking the ThredUp team.

Speaker Change: We've been working tremendously hard and for living our values every day, especially the ones we have on the secret menu and for your ambition and commitment to inventing the future of retail. So, thanks everyone. We'll see you next time.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.

Everyone else has left to call