ThredUp, a secondhand resale platform, has ended 2023 on a high note with record-breaking financial results for the fourth quarter. The company recorded a significant revenue increase of 14 percent year-over-year, reaching $81.4 million. This surge in revenue reflects an evolving consumer trend towards sustainable fashion choices and thrift market appeal.
ThredUp gross profit grew to an impressive $50.4 million year-over-year, marking a 12 percent raise. However, the company experienced a dip in gross margin—a slight decrease from 61.9 percent to 63.1 percent year over year—owing partly to a $1.9 million inventory write-off in Europe.
Exploring the net loss figures, ThredUp has a cause for optimism as the losses have narrowed during the final quarter, amounting to $14.6 million, or a negative 18 percent of revenue. This is a considerable improvement compared to the $19.5 million net loss recorded in the same period in the previous year.
Adjustments to EBITDA also paint a promising picture. The company reports that its adjusted EBITDA loss has tightened from $5.8 million to $2.1 million, validating its strategic business model and cost-efficiency measures.
One of the key performance indicators for e-commerce platforms is their active buyer count, and for ThredUp, this statistic is encouraging. The number of active buyers saw a 9 percent year-over-year uplift, climbing to 1.8 million. This growth demonstrates the brand's increasing popularity among consumers who prioritize economy and sustainability.
Taking a broader perspective of the full financial year of 2023, ThredUp continued its upward trajectory, with a record full year revenue of $322.0 million, representing 12% growth year-over-year. . Gross profits for the year echoed this expansion, documenting an 11 percent YoY increase at $213.8 million.
ThredUp's fiscal prudence is further evidenced by its shrinking net loss for the year, down from a staggering $92.3 million in the previous year to $71.2 million. Additionally, the adjusted EBITDA loss contracted to $17.4 million, accentuating the company's betterment in financial stability.
The company reported a record-breaking 6.9 million orders throughout the year—an uplift of 6 percent compared to the prior period—representative of 1.8 million active buyers in Q4 2023.
James Reinhart, the CEO and co-founder of ThredUp, shared his enthusiasm and confidence in the company's future, stating that the strong financial performance sets a solid foundation for growth.
“We closed out 2023 with another quarter of strong financial performance, demonstrating healthy top-line growth and bottom-line leverage,” said ThredUp CEO and co-founder James Reinhart. “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.”
Looking to the immediate future, ThredUp presents an upbeat forecast for the first quarter of 2024, projecting revenues between $79 million and $81 million and a gross margin predicted to lie in the optimistic range of 68.5 percent to 70.5 percent. The projections remain bullish for the fiscal year 2024, with anticipated revenues spanning $340 to $350 million and gross margins ranging from 69.5 to 71.5 percent.
