Q2 2026 ThredUp Inc Earnings Call Transcript
Key Points
- ThredUp Inc (TDUP) delivered strong Q2 2026 results with revenue of $90.8 million, up 16.9% year over year, and adjusted EBITDA of $4.8 million, exceeding internal expectations.
- Active buyers grew 21% year over year to 1.8 million, with orders up 22%, and new buyer acquisitions hit a record high, up 13.1% year over year.
- Gross margin improved to 79.9%, a 40-basis point increase year over year, driven by improved efficiency and logistics.
- The company is successfully shifting to a more premium buyer base, with new customer volume on Meta and Pinterest growing 130% and 145% year over year, respectively, and premium bag items up 32% year over year.
- AI-driven product enhancements, such as real-time personalization, clustering, and Exact Match, are driving engagement and conversion, with early tests showing a 5% lift in item engagement and a 7% lift in profit per buyer for new customers.
- Direct listings (peer-to-peer) launched to all marketplace users, with items listed up 89% month over month and an average listing price of $80, indicating a premium supply mix.
- Resale-as-a-service expanded with three new brand storefronts (Steve Madden, Dolce Vita, Betsey Johnson), providing access to new sellers and customers.
- The company generated $3 million in cash in Q2 and expects to remain cash flow positive for the full year.
- ThredUp Inc (TDUP) faced a tougher consumer environment in Q2, requiring incremental promotions to drive conversion among price-sensitive shoppers, leading to lower ASPs and an estimated $3 million revenue headwind.
- The company lowered its full-year 2026 revenue guidance to $344.4-$348.4 million (11% growth at midpoint) due to expected promotional headwinds of approximately $7 million in the second half.
- Q3 and Q4 revenue guidance reflects slower growth (7% and 8% year over year at midpoint, respectively) compared to Q2's 16.9% growth, indicating a deceleration.
- Adjusted EBITDA margin guidance for the full year was reduced to approximately 4.7% of revenue, with Q3 expected at 4% and Q4 at 6%, reflecting the impact of increased promotions and continued investment in marketing and processing.
- The company is experiencing weakness in its budget customer segment (making under $60,000 a year), which is being impacted by higher gas prices and economic uncertainty, requiring discounts on aging inventory to maintain engagement.
- Average order values are expected to decline in the back half of the year as the company uses promotions on older inventory to drive conversion, potentially impacting revenue per buyer.
- The company noted that maintaining the original second-half outlook would have required 'just about every variable to fall in our favor,' highlighting the uncertainty and risk in the current environment.
- Sell-through rates for direct listings are slower than the managed marketplace, as sellers tend to overprice items, which could limit the near-term contribution from this channel.
Thank you. Hi, my name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the ThredUp second quarter 2026 earnings conference call. (Operator Instructions)
I would now like to turn the conference over to Lauren Frasch, Investor Relations. Please go ahead.
Good afternoon and thank you for joining us on today's conference call to discuss ThredUp's fourth quarter and 2025 (sic - "second quarter 2026") financial results. With me are James Reinhart, ThredUp 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'd 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
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