ThredUp Inc. (TDUP) Q3 2025 Earnings Call Transcript
Revenue $82.2 million, an increase of 33.6% year-over-year. The growth was driven by investments into marketing and inbound processing, which enhanced the marketplace flywheel, and improved buyer metrics from new customer-facing products.
Gross Margin 79.4%, a 10 basis point increase year-over-year. The improvement was attributed to higher average selling prices due to the rapid growth in the premium supply offering.
Adjusted EBITDA $3.8 million or 4.6% of revenue, a 410 basis point improvement year-over-year. This was due to leveraging multiyear investments, revenue outperformance, and continued investments in marketing and inbound processing.
Active Buyers 1.6 million for the trailing 12 months, up 25.6% year-over-year. Growth was driven by record new buyer acquisition and improved conversion rates for both new and existing buyers.
Orders 1.6 million in the third quarter, up 37.2% year-over-year. This was supported by repeat purchases from new buyers and improved conversion rates.
Free Cash Flow $2.4 million for the quarter and $3.4 million year-to-date. This reflects strong operational performance and efficient cash management.
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Coursera (COUR) Merges with Udemy (UDMY) Amid Stock Declines
- Merger Agreement: On December 17, Coursera announced an all-stock merger agreement with Udemy, aiming to leverage both companies' strengths to address global talent transformation opportunities, despite its stock falling approximately 17% over the past month, with a 52-week low of $5.76.
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- Udemy Rating Downgrade: Keybanc analyst Devin Au downgraded Udemy from Overweight to Sector Weight, resulting in a 10% decline in its stock over the past five days, with a 52-week low of $4.86 and an RSI value of 28.2.
- ThredUp Rating Maintained: Telsey Advisory Group analyst Dana Telsey maintained an Outperform rating on ThredUp with a $12 price target, even as its stock fell about 25% over the past month, currently at a 52-week low of $1.66 and an RSI value of 29.8.
Discount Retailers and Resale Platforms Dominate During Strong Holiday Season
- Holiday Shopping Trends: Americans showed a last-minute approach to holiday shopping, indicating a rush to complete purchases.
- Consumer Demand: Despite the timing, total holiday sales increased by nearly 4%, reflecting strong consumer demand.
A Secondhand Clothing Seller Achieves Remarkable Comeback in the Retail Industry
ThredUp's Stock Performance: ThredUp (TDUP) has experienced a significant stock rally in 2025, with shares rising nearly 400% as investors view the company as a high-growth resale platform rather than a distressed entity.
Revenue Growth and Projections: The company reported its fourth consecutive quarter of accelerating revenue growth in Q3, with expectations for holiday quarter revenue to increase by 14%, potentially leading to its first profitable quarter.
Business Model: ThredUp operates an e-commerce platform for secondhand women's and kids' clothing, positioning itself uniquely by managing logistics, pricing, and customer service, unlike traditional thrift or peer-to-peer resale marketplaces.
Market Position and Short Interest: With a market cap of over $912 million, ThredUp ranks highly in the retail sector, although it has a short interest of 15.8% of the total float, indicating some investor skepticism.
10 Retail Stocks to Keep an Eye On as the Holiday Season Kicks Off
Retail Spending Trends: As Thanksgiving approaches, consumer spending has increased, with a 2.4% rise in total card spending per household in October, driven largely by inflation rather than increased demand, as retail transaction volumes have been declining.
Income Disparity in Spending: Spending growth is uneven, with higher-income households seeing a 2.7% increase in spending, while lower-income households only managed 0.7% growth, highlighting a K-shaped economy where wealth effects benefit the affluent.
AI in Retail: This holiday season marks a significant rise in the use of artificial intelligence in shopping, with tools like Amazon's AI assistant and ChatGPT driving increased referrals to retail websites, indicating a growing trend among consumers.
Retail Stock Performance: The retail sector has seen varied stock performance, with top performers like ThredUp and National Vision Holdings thriving, while companies like Deckers Outdoor and Bath & Body Works struggle due to changing consumer preferences and economic pressures.
Increasing Numbers of Americans, Led by Gen Z, Are Shopping at Thrift Stores for Clothing
Gen Z and Thrift Shopping: Gen Z is driving the thrift shop boom, with older generations joining in due to inflation and tariffs, creating new business opportunities and budget flexibility.
Growth of Thrift Clothing Market: The global secondhand apparel market is projected to reach $367 million by 2030, with the U.S. market expected to hit $74 billion by 2029, as companies like ThredUp see significant revenue growth.
Impact of AI on Thrifting: Artificial intelligence is enhancing the thrift shopping experience by making it easier for sellers to list items and for buyers to find clothing that suits their style, potentially increasing industry growth.
ThredUp's Success: ThredUp has experienced a record 54% year-over-year growth in new buyers, with over 1.57 million active buyers, benefiting from the trend towards sustainable shopping and maintaining logistics unaffected by tariffs.
Anticipate an increase in secondhand holiday gifts this year, fueled by Gen Z's passion for thrifting.
Thrifting Journey: Hayley Doyle's passion for thrifting started in high school, where she used her pocket money to buy secondhand clothing to express her personal style.
Continued Enthusiasm: Over a decade later, Doyle, now an artist in North Carolina, still enjoys the thrill of searching for quality items in thrift stores.
Keen Eye for Quality: She has developed a keen eye for spotting high-quality materials, such as clothing labeled "100% cotton" and sterling silver jewelry marked with "925."
Personal Style: Thrifting remains a significant part of her life, allowing her to curate a unique and personal wardrobe through sustainable shopping practices.
Coursera (COUR) Merges with Udemy (UDMY) Amid Stock Declines
- Merger Agreement: On December 17, Coursera announced an all-stock merger agreement with Udemy, aiming to leverage both companies' strengths to address global talent transformation opportunities, despite its stock falling approximately 17% over the past month, with a 52-week low of $5.76.
- Poor Stock Performance: Coursera's shares dropped 10.6% to close at $6.55 on Tuesday, with an RSI value of 19.8 indicating an oversold condition in the consumer discretionary sector, potentially presenting a buying opportunity for investors.
- Udemy Rating Downgrade: Keybanc analyst Devin Au downgraded Udemy from Overweight to Sector Weight, resulting in a 10% decline in its stock over the past five days, with a 52-week low of $4.86 and an RSI value of 28.2.
- ThredUp Rating Maintained: Telsey Advisory Group analyst Dana Telsey maintained an Outperform rating on ThredUp with a $12 price target, even as its stock fell about 25% over the past month, currently at a 52-week low of $1.66 and an RSI value of 29.8.
Discount Retailers and Resale Platforms Dominate During Strong Holiday Season
- Holiday Shopping Trends: Americans showed a last-minute approach to holiday shopping, indicating a rush to complete purchases.
- Consumer Demand: Despite the timing, total holiday sales increased by nearly 4%, reflecting strong consumer demand.
A Secondhand Clothing Seller Achieves Remarkable Comeback in the Retail Industry
ThredUp's Stock Performance: ThredUp (TDUP) has experienced a significant stock rally in 2025, with shares rising nearly 400% as investors view the company as a high-growth resale platform rather than a distressed entity.
Revenue Growth and Projections: The company reported its fourth consecutive quarter of accelerating revenue growth in Q3, with expectations for holiday quarter revenue to increase by 14%, potentially leading to its first profitable quarter.
Business Model: ThredUp operates an e-commerce platform for secondhand women's and kids' clothing, positioning itself uniquely by managing logistics, pricing, and customer service, unlike traditional thrift or peer-to-peer resale marketplaces.
Market Position and Short Interest: With a market cap of over $912 million, ThredUp ranks highly in the retail sector, although it has a short interest of 15.8% of the total float, indicating some investor skepticism.
10 Retail Stocks to Keep an Eye On as the Holiday Season Kicks Off
Retail Spending Trends: As Thanksgiving approaches, consumer spending has increased, with a 2.4% rise in total card spending per household in October, driven largely by inflation rather than increased demand, as retail transaction volumes have been declining.
Income Disparity in Spending: Spending growth is uneven, with higher-income households seeing a 2.7% increase in spending, while lower-income households only managed 0.7% growth, highlighting a K-shaped economy where wealth effects benefit the affluent.
AI in Retail: This holiday season marks a significant rise in the use of artificial intelligence in shopping, with tools like Amazon's AI assistant and ChatGPT driving increased referrals to retail websites, indicating a growing trend among consumers.
Retail Stock Performance: The retail sector has seen varied stock performance, with top performers like ThredUp and National Vision Holdings thriving, while companies like Deckers Outdoor and Bath & Body Works struggle due to changing consumer preferences and economic pressures.
Increasing Numbers of Americans, Led by Gen Z, Are Shopping at Thrift Stores for Clothing
Gen Z and Thrift Shopping: Gen Z is driving the thrift shop boom, with older generations joining in due to inflation and tariffs, creating new business opportunities and budget flexibility.
Growth of Thrift Clothing Market: The global secondhand apparel market is projected to reach $367 million by 2030, with the U.S. market expected to hit $74 billion by 2029, as companies like ThredUp see significant revenue growth.
Impact of AI on Thrifting: Artificial intelligence is enhancing the thrift shopping experience by making it easier for sellers to list items and for buyers to find clothing that suits their style, potentially increasing industry growth.
ThredUp's Success: ThredUp has experienced a record 54% year-over-year growth in new buyers, with over 1.57 million active buyers, benefiting from the trend towards sustainable shopping and maintaining logistics unaffected by tariffs.
Anticipate an increase in secondhand holiday gifts this year, fueled by Gen Z's passion for thrifting.
Thrifting Journey: Hayley Doyle's passion for thrifting started in high school, where she used her pocket money to buy secondhand clothing to express her personal style.
Continued Enthusiasm: Over a decade later, Doyle, now an artist in North Carolina, still enjoys the thrill of searching for quality items in thrift stores.
Keen Eye for Quality: She has developed a keen eye for spotting high-quality materials, such as clothing labeled "100% cotton" and sterling silver jewelry marked with "925."
Personal Style: Thrifting remains a significant part of her life, allowing her to curate a unique and personal wardrobe through sustainable shopping practices.
