ThredUp (TDUP) Q1 2026 Earnings Transcript

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DATE

May 4, 2026

CALL PARTICIPANTS

• Chief Executive Officer and Co-Founder — James Reinhart
• Chief Financial Officer — Sean Sobers
• Head of Investor Relations — Lauren Frasch

TAKEAWAYS

• Revenue -- $81.7 million, up 14.6% year over year, attributed to new buyer acquisition and marketing efficiencies.
• Active Buyers -- 1.7 million on a trailing twelve-month basis, representing a 25% increase.
• Orders -- 1.6 million in the quarter, up 19.3%.
• Gross Margin -- 79.2%, up 10 basis points compared to the same period last year.
• Adjusted EBITDA -- $2.7 million, or 3.4% of revenue, reflecting a 190 basis point decline from the prior year as more was invested for growth.
• GAAP Net Loss -- $6.5 million, compared to a net loss of $5.2 million last year.
• Cash Balance -- Increased by $1.3 million during the quarter to $54.4 million, with $4.1 million invested in capital expenditures.
• Guidance: Q2 Revenue -- Expected to be $89 million to $91 million, implying 16% growth at the midpoint.
• Guidance: Q2 Adjusted EBITDA Margin -- Approximately 5.2% of revenue, with a gross margin range of 78.5%-79.5%.
• Guidance: Full Year Revenue -- Projected at $351.2 million to $356.2 million, reflecting 14% year-over-year growth at the midpoint.
• Guidance: Full Year Adjusted EBITDA Margin -- Approximately 6.1% of revenue, which is about 170 basis points of margin expansion versus the previous year.
• Buyer Acquisition -- March was the highest month on record, with new buyers up 27% year over year, and customer acquisition costs down by over double digits.
• Average Selling Price (ASP) and Conversion Rates -- ASP declined roughly 3%, and conversion rates for existing customers were lower by about 5% since early March.
• Seller Supply -- Listings up 17% year over year, with new seller kit requests up 90%; 48% of kit requests came from first-time sellers.
• Marketing Channel Shift -- Meta ad spend rose 100%, and Pinterest up 94%, while spending on Google decreased, driving improved LTV-to-CAC ratios.
• AI Product Rollout -- First agentic product experience launched for a segment of customers using reinforcement learning to personalize shopping journeys.
• Premium Supply Initiatives -- Premium bags were launched on TikTok Shop, and new direct selling and relisting tools enabled core buyers to resell items with one click.
• Resale-as-a-Service (RAAS) -- Secured new apparel brand partners and expanded activations with existing clients, evidenced by viral in-store events and successful Earth Month campaigns with several brands.

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RISKS

• CEO Reinhart said, "Prices are off roughly 3%, and conversion rates for existing customers are lower by about 5%," attributing this to high gas prices, inflation, and macro uncertainty.
• CFO Sobers stated that adjusted EBITDA margin was down 190 basis points due to increased upfront investment in growth drivers relative to last year.

SUMMARY

ThredUp (NASDAQ:TDUP) recorded a 14.6% revenue increase, reaching $81.7 million with robust growth in active buyers and marketplace orders. Management confirmed a deliberate investment in both new buyer and new seller acquisition, with resulting metrics exceeding internal expectations and March delivering the highest new buyer count ever. While top-line momentum remains, average selling price and conversion rates softened, driven by macroeconomic pressures including higher gas prices and inflation. For the remainder of the year, guidance incorporates this dynamic, and operational focus centers on improving supply, onboarding, and personalization through agentic AI while accelerating premium product initiatives and advanced seller tools.

• Management attributed recent headwinds in ASP and conversion to consumer sensitivity linked to inflation and external macro events, explicitly flowing these trends into both Q2 and full-year forecasts.
• Channel shift toward Meta and Pinterest has not only increased spend but also delivered stronger customer lifetime value relative to Google, adjusting the company's acquisition strategy.
• A historic surge in new sellers, led by TikTok Shop and targeted marketing, prompted increased resources in onboarding and education to address incremental supply and seller quality challenges.
• The new agentic AI product, currently live for a subset of users, adapts real-time site experiences based on individual browsing data, reflecting a shift toward dynamic personalization in a high-SKU resale environment.
• Operational investments in Q1, while reducing adjusted EBITDA margin versus last year, are described as advancing "predictable growth, expanding profits, and accelerating cash flow" per management outlook.

INDUSTRY GLOSSARY

• Agentic commerce: AI-driven ecommerce shopping journeys where virtual agents dynamically personalize what is shown to each customer in real time.
• Kit request: Seller-initiated process to send items to ThredUp for review and listing on the resale platform.
• RAAS (Resale-as-a-Service): ThredUp's solution for powering apparel brands’ own recommerce and secondhand experiences, often as white-label or partner events.
• HangerScore: Internal metric measuring item quality within ThredUp's marketplace, factoring into supply strategy and buyer experience.
• LTV-to-CAC ratio: Metric comparing a customer's expected lifetime value to the cost of acquiring that customer, used to assess marketing channel efficiency.

Full Conference Call Transcript

Lauren Frasch: Good afternoon, and thank you for joining us on today’s conference call to discuss ThredUp Inc.’s financial results. With me are James Reinhart, ThredUp Inc.’s CEO and Co-Founder, and Sean Sobers, CFO. We posted our press release and supplemental financial information on our Investor Relations website at ir.thredup.com. This call is being webcast on our IR website, and a replay of this call will be available on the site shortly. Before we begin, I would like to remind you that we will make forward-looking statements during the course of this call. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially.

Please refer to our earnings release, the supplemental financial information, and our Forms 10-K and 10-Q for more information on these expectations, assumptions, and related risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today’s earnings press release and the supplemental financial information distributed and available to the public through our Investor Relations site at ir.thredup.com. I will now turn the call over to James. James?

James Reinhart: Good afternoon, everyone. Thank you for joining our first quarter 2026 earnings call. Today, I will review our Q1 results, discuss what drove performance in the quarter, and share how we are focused for the balance of the year. I will then hand it over to Sean Sobers, our Chief Financial Officer, to walk through the financials in more detail and provide our outlook for Q2 and the full year. As always, we will close with a question-and-answer session. First to the results: In the first quarter, revenue grew 14.6% year over year to $81.7 million, while gross margin was 79.2%, and adjusted EBITDA was 3.4% of revenue. We grew our cash balance by $1.3 million.

Active buyers on a trailing twelve-month basis grew 25% year over year, and new buyer acquisition remained strong. March was the best month in our history. All of these metrics exceeded our expectations. However, as we move through Q2, we think it is worth acknowledging that the macro environment remains uncertain. Relative to prior quarters, we do see an incrementally discerning consumer as gas prices remain high and inflation proves to be sticky. We have observed this mainly through average selling prices and conversion rates being slightly lower since early March. Prices are off roughly 3%, and conversion rates for existing customers are lower by about 5%.

Nevertheless, overall demand has remained resilient year to date, with continued growth in new buyers and strong sell-through driven by existing buyers. That demand, combined with improved marketing efficiency, supported strong unit economics. It has given us confidence in our growth plan for 2026 and how our business leverages and expands margins over time. As we move through 2026, our priorities are focused in three areas: continuing to grow and retain high-value buyers; developing AI technology that helps customers discover and shop across our vast marketplace; and scaling high-quality supply from a diverse group of sellers. In Q1, we continued to improve how customers discover, shop, and sell across ThredUp Inc.

With millions of unique items, helping customers find the right item quickly is critical to conversion and retention. On that note, we are excited to share that we now have our first agentic product experience live for a segment of customers. We start by assigning an agent or a team of agents to each customer. The agents consume event feeds across all platforms—web, mobile web, native—and channels—email, push, SMS—and use reinforcement learning to enable personalized browsing at the individual customer level. No two customer journeys are the same. Ultimately, we are working towards a customer experience that will dynamically change everything you see on ThredUp Inc. based on your clickstream data in real time.

This is the true promise of agentic commerce. Second, we are now aggregating exact match items into an improved customer experience, starting with our highest-volume category, dresses. Let me explain. This means the customer who is shopping for a dress might now see options on that product page to buy this dress in a different color, a different size, or a different quality standard—all without having to navigate to another product page. While this is standard in ecommerce, no scaled resale company has been able to replicate this experience across thousands of brands and category SKUs.

We think this is a foundational improvement in the resale shopping journey, and ThredUp Inc. is uniquely able to do this given our data and vast catalog of photography. This experience is particularly relevant for newer customers and amplifies our broader acquisition strategy as we bring more and more first-time secondhand shoppers to our site. We plan to slowly roll this out to more customers and more categories in the coming quarters. Third, with the ongoing success of our AI product development cycles and elevated conversion rates, we are unlocking scale in new channels. Our spend on Meta is up 100% year over year in Q1, delivering some of the highest LTV-to-CAC ratios we have seen.

Pinterest is similarly up 94%. This has reduced spend on Google, where we tend to see acquisition costs be lower and returns higher. This evolution is consistent with our goal of increasing early customer retention and expanding LTVs over time and exemplifies how ThredUp Inc. benefits from generative AI technology. Turning to supply. Each year, our annual Resale Report has become the industry’s go-to resource for understanding where the secondhand market is headed, and this year’s edition, which we published last month, identified supply as the defining constraint for the next phase of growth.

With U.S. online resale already growing more than three times faster than the broader retail environment, we believe the key to unlocking the next phase of market value is not demand—it is aggregating more high-quality supply online. Let me anchor that in what we are actually seeing on the supply side of our own marketplace. Our seven-day sell-through rate, which we view as the best proxy for overall demand, is up more than 15% year over year alongside continued strong growth in listings. The net of these performance indicators is that we need more sellers and more supply to satisfy the growing awareness and demand from buyers on our marketplace. Listings are up 17% year over year in Q1.

We are moving swiftly to do so. In Q1, we made a deliberate investment in new seller acquisition. Of our total kit requests in the quarter, 48% came from sellers who were new to ThredUp Inc. New seller kit requests grew 90% year over year. Overall, this was one of the largest surges in new sellers in ThredUp Inc.’s history, driven by TikTok Shop activation, on-site promotion, and targeted seller campaigns. With so many new supplier initiatives in motion, we have renewed our focus on onboarding, seller education, and segmentation, with particular attention to TikTok Shop, where we just recently launched premium bags.

In addition, we are increasing inbound processing faster than planned to capitalize on this influx of new sellers and build on the momentum we saw in Q1. The long-term picture is clear: a larger seller base, improved supply quality, and more aggressive processing should create a faster-growing, more liquid, more profitable marketplace. Now let me turn to other areas of opportunity in our business. Our direct listings data remains promising, as we maintain our goal of growing 10% week over week while continuing to launch new features that deliver the highest-quality buyer and seller experience. First, using our vast dataset, we are launching a suite of improved seller pricing tools to help items sell more quickly.

Second, leveraging the customer data we have accumulated over the years, we are finalizing the rollout of a relisting tool that allows our core marketplace buyer to resell their previously purchased items with one click or make their entire purchase closet shoppable. This relisting feature is a powerful and unique asset given we have sold over 100 million items that ostensibly could be made available to others with one click. We think about this as “lean-back selling.” It is more consistent with our approach to serving casual sellers first, not professionals looking to run a small business.

Finally, we are improving seller verification and training that will reduce potential for fraud, eliminate subpar listings, and build more trust in our marketplace over time. On the Resale-as-a-Service, or RAAS, front, we have landed several new apparel brand partners that will be launching resale experiences with us in the coming quarters. We have also deepened engagement with existing clients. A standout example was Reformation’s in-store trade-in event in New York City, which went viral on TikTok—a playbook we are now replicating across the entire partner base. Earth Month was a particularly strong activation period, with Lands’ End, Madewell, and Abercrombie all running RAAS campaigns that drove meaningful engagement.

As we look ahead, we remain focused on executing our growth plan amidst an ever-changing consumer environment. Our priority is building a marketplace that delivers clear value to buyers and compelling monetization and convenience for sellers. We are confident our focus on conversion, retention, and supply quality on top of our strong unit economics will position us to deliver durable, compounding performance over time. With that, I will turn it over to Sean to walk through the financials in more detail and provide our outlook for Q2 and the full year.

Sean Sobers: Thanks, James. I will begin with an overview of our results and follow up with guidance for the second quarter and full year of 2026. I will discuss non-GAAP results throughout my remarks. We are extremely proud of our Q1 results, in which we exceeded our internal expectations for revenue, gross margins, and adjusted EBITDA. For Q1 2026, revenue totaled $81.7 million, an increase of 14.6% year over year. Our performance was driven by investments into new buyer acquisition, continued LTV-to-CAC efficiencies, and inbound processing that drove our marketplace flywheel. These drivers resulted in another strong quarter for new buyer acquisition, including a record month in March.

We finished the quarter with a record 1.7 million active buyers on a trailing twelve-month basis, up 25% over last year, while we had 1.6 million orders in the first quarter, up 19.3%. For Q1 2026, gross margin was 79.2%, a 10 basis point increase versus the same quarter last year, as a result of higher ASPs. For Q1 2026, GAAP net loss was $6.5 million compared to GAAP net loss of $5.2 million in the same quarter last year. Adjusted EBITDA was $2.7 million, or 3.4% of revenue for Q1 2026, outperforming our internal expectations. Our Q1 result represented a 190 basis point decline over last year.

This year, with more confidence in our growth trajectory, we invested in our drivers earlier in the quarter, resulting in better top-line results and more moderate EBITDA this year. From here, we expect to methodically expand EBITDA year over year in 2026. Turning to the balance sheet. We began the quarter with $53.1 million in cash and securities and ended the quarter with $54.4 million. We invested $4.1 million in CapEx and generated $1.3 million in cash in Q1. We continue to expect similar levels of CapEx in 2026 as last year. Now I would like to turn to guidance. As James mentioned earlier, we are seeing indications of a more selective consumer.

As a result, we are maintaining our revenue and EBITDA margin expectations for the balance of the year while flowing through our Q1 outperformance. Nevertheless, we remain confident in driving strong performance in the things within our control. In the second quarter, we expect revenue in the range of $89 million to $91 million, representing 16% year-over-year growth at the midpoint; gross margin in the range of 78.5% to 79.5%; adjusted EBITDA of approximately 5.2% of revenue; and basic weighted average shares outstanding of approximately 130 million shares.

For the full year 2026, we expect revenue in the range of $351.2 million to $356.2 million, reflecting 14% year-over-year growth at the midpoint; raising our gross margin expectation to the range of 78.5% to 79.5%; adjusted EBITDA of approximately 6.1% of revenue, representing approximately 170 basis points of expansion versus last year; and basic weighted average shares outstanding of approximately 131 million shares. As we emphasized on our last call, we continue to plan to flow any incremental dollars above our guide back into growth-driving opportunities in processing and marketing. This year, we remain confident in the fundamentals of our marketplace flywheel, our operational consistency, and our strategy as we pursue predictable growth, expanding profits, and accelerating cash flow.

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

Operator: At this time, if you would like to ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, press star 1 again. We kindly ask that you limit your questions to one and one follow-up for today’s call. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Ike Boruchow with Wells Fargo. Please go ahead.

Irwin Bernard Boruchow: Hey, good afternoon, guys. The first one is, Q1 was very strong—I understand maintaining expectations for Q2 to Q4—but can you elaborate on the consumer being more selective and the demand remaining resilient? There have been a lot of things in the macro—gas prices, inflation. How do you square those two dynamics? How are you thinking about the rest of the year? Maybe when did you start to see the consumer behavior start to change? Did it coincide with geopolitical events or gas prices going up? Just elaborate more on that.

James Reinhart: Yeah, sure. Hey, Ike. The business has remained strong. Q1 was a good quarter and exceeded expectations on the top and bottom line. Gross margins expanded. We are feeling very good about the business. April has been good quarter to date, so I think everything generally is going in the right direction. We wanted to give folks the building blocks of what we saw on ASPs and conversion rates, because it does track, in our view, with the war in Iran and elevated oil and gas prices, which we think on the margin is making the consumer a little bit more picky and discerning. We are seeing it in ASPs and conversion rate.

Having said that, we have flowed those dynamics through the P&L for the rest of the year, and the business remains strong even with those dynamics at play in April. But there is just enough out there that we want to be thoughtful about what the rest of the year guide looks like. Sean?

Sean Sobers: I think it is key to understand that we did flow through the ASP and conversion items that we saw in April through the full guidance outlook.

Irwin Bernard Boruchow: And then just to follow up on ASP, you said it is down low single digits. Is that the expectation for the rest of the year—that your ASP or AOV should remain under pressure—or are you expecting a bounce back in the back half?

James Reinhart: Right now, it is off about 3%, consistent with March, when we started to see this. That is in the guide for the rest of the year, but depending on how things materialize with oil prices and inflation, I could see a scenario where it bounces back. Timing is a little unclear. I still think the unit margins, contribution margins, top line, and EBITDA are all strong even with ASPs being off a little bit, and our assumption is there is not a recovery in the guidance numbers.

Operator: Your next question comes from the line of Matt Koranda with ROTH Capital. Please go ahead.

Matt Koranda: Hey, guys. Following up on that line of questioning—can you unpack the trend you are seeing in the business in April and how you built the guide for the second quarter? You said reduced conversion and ASP pressure in April, but the guide for second quarter sales is an acceleration relative to the first quarter. Can you square those for us?

James Reinhart: Yeah, Matt. April has been strong, and the guide reflects 16% growth in Q2. We flowed through the Q1 beat, with the full year at 14%. The business remains strong and resilient, but we have to acknowledge that ASPs are a little lower than we anticipated. Had ASPs not come down a bit and conversion not come down a bit—again, we attribute this to the macro—my guess is numbers would be coming up for both the quarter and the year. At this point, it is better to be a little more cautious and see how the quarter unfolds. Both dynamics are at play: a slightly more discerning consumer and us really operating and executing the business at a high level.

Both things can be true.

Matt Koranda: On the supply front, it sounds like the macro disruption might even be driving more supply to your marketplace. Can you talk about the incremental supply that you are seeing turn on, and maybe in the context of the third-party initiative you have going on?

James Reinhart: We saw a huge surge in new sellers coming onto the platform in Q1—almost a 1 thousand basis point improvement year over year on new sellers. It was a conscious effort to invest in getting the supply engine going, and we are seeing success. Any time you are onboarding that many new people, it adds more work for the team around messaging, education, and onboarding. We are spending more time on that than ninety days ago. It speaks to the strength of the marketplace model in any economic climate, and we feel very good about how these suppliers, from a cohort basis, become repeat suppliers over time and really fuel the business back in 2026 and into 2027.

Operator: Your next question comes from the line of Dylan Carden with William Blair. Please go ahead.

Dylan Douglas Carden: Appreciate it. Is this the first time that you spent to acquire sellers?

James Reinhart: Yeah, Dylan. We are spending some dollars testing the methods and the way that we acquire sellers. The work we did on TikTok, as an example—we are working with some creators and influencers on an affiliate basis. Yes, we are kicking off a real, methodical approach there. What we have learned is that there is room to really grow sellers through some basic paid marketing, and we are embarking on that journey now. The effects are not only expanding the seller base, but those sellers you acquire convert at pretty good rates into buyers, and the quality of the sellers’ goods helps drive improvements in buyer conversion rates and buyer LTVs.

There is a nice recipe to spend money acquiring sellers that makes both sides of the marketplace spin faster. For the last couple of years, I have said when we start turning attention to acquiring sellers, we have effective ways to do that—evolving messaging across platforms and changing the incentive mix. Everything I have said over the last few years around how we would do this is exactly what we are doing today. It is playing out as we thought—there are compelling ways to acquire sellers beyond our organic reach, and those methods can be very accretive to the business by expanding the overall seller base and converting those sellers into buyers.

We see it as an acceleration of the flywheel.

Operator: Your next question comes from the line of Dana Telsey with Telsey Advisory Group. Please go ahead.

Dana Lauren Telsey: Hi. Good afternoon, everyone. As you think about prices being lower and conversion a bit lower, was it consistent throughout the quarter, or was that just the end of the quarter in March? And with the uptick in new customers, what are their demographics—is there any regional, age, or income trend you are seeing?

James Reinhart: Hey, Dana. The pricing piece and some conversion headwind started in March, which is consistent with the war in Iran. It is hard to say it is perfectly correlated, but we did start to see it then. It has since normalized; we have been operating in that environment for the past sixty days. We have been able to adjust where necessary around the types of goods we put on promotion, how we think about sell-through, marketing, and curation. We have digested pricing and conversion changes and changed how we are operating the business to meet the customer where they are. It does point to some correlation with elevated oil prices and consumer sentiment.

On the buyer mix, we are spending more on Meta and Pinterest and fewer dollars on Google, primarily because of the mix of customers we acquire. The Meta and Pinterest customers have better LTVs—their CACs are slightly elevated, but the LTVs more than offset them. As more new-customer flow comes from those channels, we see predictive LTVs be higher, which speaks to compounding cohorts over time. We feel good about the acquisition mix and strategy, and we feel good about digesting the pricing and conversion we have seen since March.

Dana Lauren Telsey: Got it. And just one last thing. You talked about inbound processing being faster than planned. How much faster was it and where do you go from here?

James Reinhart: With all of the growth in buyers—active buyers up, new buyer acquisition strong—our data suggests that buyers could buy more and absorb more supply. Our approach now is to turn on the afterburners to process as much as possible. Given the cohort sizes and purchase behavior, it is a wonderful moment where if we process more goods, the business flywheel should go faster, given the pent-up demand from this large buyer cohort. We are able to acquire customers efficiently, LTVs are good, and we just need more supply online—and that is what we are doing.

Operator: Thank you. Your next question comes from the line of Bobby Brooks with Northland Capital Markets. Please go ahead.

Robert Brooks: Hey. You started to see headwinds in pricing and conversion in March, but at the same time had the best month in your history of buyer acquisition. That seems really impressive. I would love to hear more on that dynamic and what you did to drive that great performance.

James Reinhart: Hey, Bobby. Both things can be true. It shows the underlying strength of the business: even where conversion rates might be a little softer, the fundamental conversion rate remains strong. Go back to last year—we spent multiple quarters driving conversion rates up. Right now, we are seeing a little pullback because of the macro, but they are still very strong. That conversion is translating into new buyer growth. For example, new buyers in Q1 were up 27% year over year, and CACs were down more than a double-digit percentage. We are executing at a high level, and had we not had the ASP and conversion headwinds, I am guessing numbers would be going up.

We just wanted to acknowledge the headwinds are real, but we are navigating through them.

Robert Brooks: Thanks. And an update on the supply channel through TikTok Shop—you mentioned 100 thousand bags in one month previously. Was that high-quality supply, and is this a channel you will tap more going forward?

James Reinhart: On TikTok, the TikTok Shop bags we have processed so far look similar to other new suppliers—that is, new suppliers are always a little worse than existing suppliers because they need to get up the learning curve on ThredUp Inc. It is a huge opportunity to lean into TikTok to scale. We need to improve onboarding and education to get these sellers to perform like our large cohort of existing sellers. We feel great about the channel. We just launched our premium kits for sale on TikTok in the last couple of weeks, which is a new opportunity to scale premium bags further.

We feel great about the channel, and we will keep educating new sellers as they come on the platform. This cohort looks promising.

Robert Brooks: Lastly, on buyer acquisition—what incentives or levers are driving that really good acquisition? Is it the better marketing channels—leaning into Meta and Pinterest and away from Google—or tailwinds from last year’s rebrand?

James Reinhart: The channel mix is a big piece. We kicked off work to improve how we advertise on Pinterest in a material way about a year ago and have been methodically growing those channels. We are seeing historically low CACs on Meta, so we can put more dollars to work there. The combination of a better product experience on the site and better targeting and efficiency has created a good recipe. We are leaning more into Pinterest and Meta going forward. If we can continue to scale spend and move dollars away from Google PMAX, you will see those cohorts get even better than they are today.

Operator: Next question comes from the line of Oliver Chen with TD Cowen. Please go ahead.

Oliver Chen: Hi, James and Sean. As we look ahead, what should we know about order frequency relative to the momentum in active buyers? Second, regarding ASP and conversion rates, do you expect those to be noisy or get worse, and what is incorporated in your guidance? Third, on reinforcement learning, many models are based on action-reward—what is happening in terms of the agent versus the reward, how does that optimize to be adaptive, and what should we pay attention to as you continue to invest there?

James Reinhart: On reinforcement learning, this is an exciting time for us to have our first product experience in market with an agentic engine. Every time the agent—or team of agents—engages, we get better data on how the customer is browsing, what they are adding to cart, removing from cart, what they are clicking, and time spent on items. The model takes that data and predicts the path most likely to lead to conversion, changing what the customer sees as they navigate the site in real time. Traditionally, models have a lag—you push learnings into email or push marketing. Here, it is changing the on-site experience live. For a traditional retailer, this is easier with limited catalog depth.

In secondhand, with hundreds of thousands of new items coming online each week, you need a more robust, dynamic engine. The team has built something special. We are seeing strong conversion rates and will roll it out to more customers and categories over time. We started with dresses, our biggest category, but there is lots more to do.

Sean Sobers: On ASPs and conversion from a planning or guidance perspective, we looked at what we were seeing starting in March through April, as James mentioned, and baked that into the guidance as we go forward. You see that in the Q2 and full-year 2026 outlook. On frequency, we are seeing incremental frequency. On the last call, we discussed product decisions around the free shipping threshold and focusing on frequency over average order value. On a trailing twelve-month basis, you can see revenue per order being slightly lower, but orders per buyer are going up. You will continue to see that trend through the rest of 2026.

If you roll that forward into 2027, order frequency is a much bigger driver of revenue growth than revenue per order, given how much customers are shopping on ThredUp Inc. These dynamics are positive, and the team has done a great job calibrating revenue per order and frequency.

Oliver Chen: Supply has always been important, but it feels like your machinery has heightened that importance given your success with buyers. What is different now? And on mix, premiumization has been a factor—how does that interplay with reinforcement learning and customer experience?

James Reinhart: On supply, historically we believed the supply we were getting could satisfy demand on the marketplace. Over the last fifteen months—through the launch of our premium service and recently direct selling—we are seeing that incremental innovation in supply channels can drive outsized growth among both sellers and buyers. There are pockets of sellers and the market we were not addressing. Premium and above-premium were areas ThredUp Inc. was not really known for, but we are becoming more relevant to customers with that premium mix. Similarly, with direct selling, customers who wanted to sell their own items and recover more did not have an option—now that is changing.

Our point of view is that seller innovation can expand the addressable market and make the business grow faster, which is why we are innovating. As for reinforcement learning with respect to supply, it is TBD. We are not using agents yet to do much on the supply side, so there is no RL to comment on there right now.

Oliver Chen: On the virtuous circle and TAM expansion, do you anticipate needing different capabilities or supply chain, or will you test as you go? Does it change how you handle or authenticate longer term?

James Reinhart: I do not see any material change in how we handle supply. What we have done so far is build real defensibility and unique assets to process and price at scale—items that are $25, $26, $27—and we are leveraging that entire supply chain and innovation to do more. Our thesis all along was that we could build competitive advantage in supply chain, data, and our marketplace, and then incrementally expand how we serve buyers and sellers. We are showing we can do that—drive growth among our core everyday sellers and attract different segments, whether through premium or direct selling. It speaks to the power of the business model to compound year after year.

Operator: Next question comes from the line of Bernie McTernan with Needham and Company. Please go ahead.

Bernard Jerome McTernan: Great, thanks for taking the question. On supplier KPIs—James, what metrics do you track internally to make sure you have enough supply, and where are those metrics now versus where you want them to be? And I have a follow-up.

James Reinhart: We track a few things. One is items per buyer—broad selection and availability as we look at the distribution of buyers and items. That metric flipped in Q1 and said we have so much incremental buyer demand that we do not have quite as many items per buyer as needed. That speaks to improvements in and the amount of buyer growth—our “warning light” went on that we could benefit from more supply to meet demand. Second, we look at the quality of items—we think about it internally as a HangerScore, the quality score of items per buyer. We saw that we could still drive more high-quality HangerScore items, primarily through the mix of premium, to delight that segment of buyers.

That led to launching premium bags on TikTok, as an example. Both indicators suggest the relationship between supply and buyers is healthy, but the marketplace today is slightly underserved relative to six months ago. That is why we are more aggressively investing and ramping supply.

Bernard Jerome McTernan: And on the ASP headwind, is this consumers trading down or any specific action you are taking on pricing that is causing this headwind?

James Reinhart: That is the question. From what we see, the consumer is being a bit more discerning. Over the next sixty to ninety days, we will evaluate if there is something we can do to have that flip back more quickly—how we promote, curate, or merchandise. Today, we think it is mostly the consumer being a bit more discerning, which is why we flowed it through the rest of the year. If ASPs were back up 3% to 3.5%, my guess is numbers would be higher for Q2 and for the year. We will digest this and keep operating at a high level, and I think we will be in great shape.

Operator: That concludes our question-and-answer session. I will now turn the call back over to James Reinhart for closing remarks.

James Reinhart: Thank you all for joining us today. I am especially grateful to the ThredUp Inc. team for your continued hard work and relentless pursuit of solutions to make the lives of all of our buyers and all of our sellers better. Thank you all. We look forward to seeing you on our next call. Cheers.

Operator: Ladies and gentlemen, this concludes today’s call. Thank you all for joining. You may now disconnect.

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