What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-03-03 · 89 added, 129 removed, 173 unchanged (56% of the section changed)

14 unchanged sentences

Sellers enjoy ThredUp because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet.

ThredUp’s sellers order a Clean Out Kit, fill and return it to us using our prepaid label.

ThredUp’s sellers order a Clean Out Bag, fill and return it to us using our prepaid label.

We take it from there and do the work to make those items available for resale.

In addition to our core marketplace, some of the world’s leading brands and retailers are taking advantage of our RaaS offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.

We believe RaaS will accelerate the growth of this emerging category and form the backbone of the modern resale experience.

We believe RaaS will accelerate the growth of this emerging category and supplements our overall supply strategy and other services.

Recent Business Developments

1 unchanged sentence

On November 30, 2024, we divested 91% of our European business and Bulgarian subsidiary, Remix, which qualified for reporting as a discontinued operation.

As a result, Remix’s results, including the loss on divestiture, are presented as a single line item, loss from discontinued operations, net of tax in the consolidated statements of income and excluded from continuing operations for all periods presented.

Accordingly, any discussion of historical information in Management’s Discussion and Analysis below reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.

In the third quarter of 2024, we recorded a $9.8 million impairment of long-lived assets in connection with the decision to exit the European market, coupled with the decline in our market capitalization.

In the fourth quarter, we recognized an $11.3 million loss on the Remix divestiture.

Both amounts were included within loss from discontinued operations, net of tax in the consolidated statements of operations for the year ended December 31, 2024.

See Note 15, Discontinued Operations, to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further details on the transaction.

As a result, Remix’s results for 2024, reflecting the period from the beginning of the year through the transaction date, are presented as a single line item, loss from discontinued operations, net of tax, and excluded from continuing operations in the consolidated statements of operations for the year ended December 31, 2024.

Cash flows attributable to Remix are segregated and presented separately as net cash flow used in discontinued operating activities and net cash flow used in discontinued investing activities for the period through the transaction date during the year ended December 31, 2024 in the consolidated statements of cash flows.

Accordingly, any discussion of historical information in the following sections reflects Remix’s results as a discontinued operation, and amounts, including key operating metrics, and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.

On July 4, 2025, the U.S.

enacted a budget reconciliation package known as the One Big Beautiful Bill Act of 2025 (OBBBA) which includes both tax and non-tax provisions.

The changes resulting from the tax provisions in OBBBA did not have a material impact on the Company’s consolidated financial statements.

Overview of 2025 Results from Continuing Operations

Total revenue was $260.0 million, an increase of 0.6% year-over-year.

Revenue totaled $310.8 million for the year ended December 31, 2025, compared to $260.0 million for the year ended December 31, 2024, representing an increase of 19.5% year over year.

Gross Profit and Margin:

Gross profit totaled $207.1 million, representing an increase of 4.4% year-over-year.

Gross margin increased by 290 basis points to 79.7% from 76.8% year-over-year.

Gross profit totaled $246.8 million for the year ended December 31, 2025, compared to $207.1 million for the year ended December 31, 2024, representing an increase of 19.1% year over year.

Gross margin was 79.4%, a decrease of 30 basis points from 79.7% for the same period in 2024.

Loss from continuing operations:

Loss from continuing operations was $40.0 million, or a negative 15.4% of revenue, for the year ended December 31, 2024 as compared to a loss of $52.4 million, or a negative 20.3% of revenue, for the same period in 2023.

Non-GAAP Adjusted EBITDA (loss) from continuing operations (1) :

Non-GAAP Adjusted EBITDA from continuing operations was $8.7 million, or 3.3% of revenue, for the year ended December 31, 2024 as compared to a non-GAAP Adjusted EBITDA (loss) from continuing operations of $(5.3) million, or (2.1)% of revenue, for the same period in 2023.

Loss from continuing operations was $20.2 million, or a negative 6.5% of revenue, for the year ended December 31, 2025, compared to a loss of $40.0 million, or a negative 15.4% of revenue, for the same period in 2024, representing a decrease of 49.5% year over year.

Non-GAAP Adjusted EBITDA from continuing operations (1) :

Non-GAAP Adjusted EBITDA from continuing operations was $13.5 million, or 4.4% of revenue, for the year ended December 31, 2025, compared to $8.7 million, or 3.3% of revenue, for the same period in 2024, representing an increase of 55.8% year over year.

Active Buyers and Orders:

Active Buyers totaled 1.3 million and Orders totaled 4.9 million in 2024, representing decreases of 6.1% and 0.6%, respectively, compared to the prior year.

Active Buyers totaled 1.7 million and Orders totaled 6.1 million in 2025, compared to 1.3 million and 4.9 million, respectively, in 2024, representing increases of 29.5% and 25.3%, respectively, year over year.

Key Financial and Operating Metrics from Continuing Operations

6 unchanged sentences

Orders 6,075 4,850 25.3 %

Total revenue $ 260,031 $ 258,504 0.6 %

Revenue $ 310,813 $ 260,031 19.5 %

Gross profit $ 246,753 $ 207,125 19.1 %

3 unchanged sentences

Loss from continuing operations margin (6.5) % (15.4) %

Non-GAAP Adjusted EBITDA (loss) from continuing operations (1)

Non-GAAP Adjusted EBITDA from continuing operations (1)

$ 13,524 $ 8,679 55.8 %

Non-GAAP Adjusted EBITDA (loss) from continuing operations margin 3.3 % (2.1) %

(1) Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies.

See below for a reconciliation of Non-GAAP Adjusted EBITDA (loss) from continuing operations to its most directly comparable GAAP measure, loss from continuing operations.

Non-GAAP Adjusted EBITDA from continuing operations margin 4.4 % 3.3 %

(1) Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin are non-GAAP measures which may not be comparable to similarly-titled measures used by other companies.

See below for a reconciliation of Non-GAAP Adjusted EBITDA from continuing operations to its most directly comparable GAAP measure, loss from continuing operations.

Active Buyers

5 unchanged sentences

Non-GAAP Financial Measures from Continuing Operations

Non-GAAP Adjusted EBITDA (Loss) from continuing operations and Non-GAAP Adjusted EBITDA (Loss) from continuing operations Margin

Non-GAAP Adjusted EBITDA (loss) from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, severance and other reorganization costs, interest expense, and provision for income taxes.

Non-GAAP Adjusted EBITDA (loss) from continuing operations margin represents Non-GAAP Adjusted EBITDA (loss) from continuing operations divided by Total revenue.

We use Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, which are non-GAAP measures, to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes.

We believe that Non-GAAP Adjusted EBITDA (loss) from continuing operations and Non-GAAP Adjusted EBITDA (loss) from continuing operations margin, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.

The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA (loss) from continuing operations:

Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations Margin

Non-GAAP Adjusted EBITDA from continuing operations means loss from continuing operations adjusted to exclude, where applicable in a given period, stock-based compensation expense, depreciation and amortization, interest expense, impairment of long-lived assets, legal settlement and fees, provision for income taxes, severance and other reorganization costs, and gains related to non-marketable equity investment.

Non-GAAP Adjusted EBITDA from continuing operations margin represents Non-GAAP Adjusted EBITDA from continuing operations divided by Revenue.

We use Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin, which are non-GAAP measures, to evaluate and assess our operating performance and the operating leverage in our business, and for internal planning and forecasting purposes.

We believe that Non-GAAP Adjusted EBITDA from continuing operations and Non-GAAP Adjusted EBITDA from continuing operations margin, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.

The following table provides a reconciliation of loss from continuing operations to non-GAAP Adjusted EBITDA from continuing operations:

Year Ended December 31,

3 unchanged sentences

Depreciation and amortization 12,924 17,328

Severance and other reorganization costs 2,949 900

Interest expense 1,919 2,525

Impairment of long-lived assets 1,070 —

Legal settlement and fees 247 —

Provision for income taxes 59 29

Non-GAAP Adjusted EBITDA (loss) from continuing operations $ 8,679 $ (5,319)

Our revenue is comprised of consignment revenue and product revenue.

Consignment revenue

We generate consignment revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers.

We recognize consignment revenue, net of seller payouts, discounts, incentives and returns.

We expect consignment revenue to continue to increase as we grow our Active Buyers and Orders.

Additionally, consignment revenue includes bag fees charged to sellers for processing Clean Out Kits.

Product revenue

We also generate product revenue primarily from the sale of items that we own, which we refer to as our inventory.

We recognize product revenue, net of discounts, incentives and returns.

We expect the percentage share of product revenue to decrease in the long term as we continue to focus on our consignment model and reduce owned inventory.

Severance and other reorganization costs — 2,949

Gains related to non-marketable equity investments (1,484) —

Non-GAAP Adjusted EBITDA from continuing operations $ 13,524 $ 8,679

Beginning in the first quarter of 2025, we combined consignment revenue and product revenue into a single line item, revenue, on the consolidated statements of operations and similarly combined related cost of revenue line items.

With our transition to a primarily consignment model, product revenue is not material to warrant separate presentation on the consolidated statements of operations.

Prior period amounts have been reclassified to conform to the current period’s presentation.

We generate revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers.

Revenue is recognized net of seller payouts, discounts, incentives and returns.

Additionally, revenue includes sales of company-owned inventory and bag fees charged to sellers for processing Clean Out Bags.

We expect revenue to continue to increase as we grow our Active Buyers and Orders.

Cost of Revenue

Cost of consignment revenue

Cost of consignment revenue consists of outbound shipping, outbound labor and packaging costs.

We expect cost of consignment revenue to decrease and gross profit to increase as a percentage of consignment revenue as we continue to scale our business due to our ability to drive leverage in shipping, labor and packaging.

Cost of product revenue

Cost of product revenue mainly consists of inventory cost, inbound shipping related to the sold merchandise, outbound shipping, outbound labor, packaging costs and inventory write-downs.

We expect cost of product revenue to decrease and gross profit to increase as a percentage of product revenue as we continue to scale our business due to our ability to drive leverage in shipping, labor and packaging.

Cost of revenue primarily consists of outbound shipping, outbound labor, and packaging costs.

We expect cost of revenue and gross profit as a percentage of revenue to remain relatively stable.

Operating Expenses

1 unchanged sentence

Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses.

Distribution center operating costs mainly include inbound shipping costs, other than those capitalized in inventory, as well as personnel costs, distribution center rent, maintenance and depreciation of equipment and leasehold improvements.

Distribution center operating costs mainly include personnel costs, inbound shipping costs (excluding amounts capitalized to inventory), distribution center rent, equipment, maintenance, and depreciation.

Product and technology costs include personnel costs for the design and development of product and the related technology that is used to operate our distribution centers, merchandise science, website development and related expenses for these departments.

14 unchanged sentences

Interest expense consists of interest and debt issuance costs relating to our term loan facility.

Certain 2023 interest costs in conjunction with the build-out of our distribution centers were reclassified from interest expense and capitalized.

Other Income (Expense), Net

Other income (expense), net primarily consists of non-operating income and expenses such as interest income earned on our investments in marketable securities.

Other Income, Net

Other income, net primarily consists of non-operating income and expenses, including interest income earned on our investments in marketable securities and gains related to our non-marketable equity investments.

Financial Results from Continuing Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

2 unchanged sentences

(in thousands, except percentages)

Consignment revenue $ 246,186 $ 213,093 $ 33,093 15.5 %

Product revenue 13,845 45,411 (31,566) (69.5) %

Total revenue $ 260,031 $ 258,504 $ 1,527 0.6 %

Consignment revenue as a percentage of Total revenue

94.7 % 82.4 %

Product revenue as a percentage of Total revenue

Total revenue increased $1.5 million, or 0.6%, for the year ended December 31, 2024 as compared to the same period in 2023.

The increase in revenue for the year ended December 31, 2024 as compared to the same period in 2023 was driven by a 15.5% growth in consignment revenue, partially offset by a 69.5% decrease in product revenue.

The shift reflects our strategic decision to transition our RaaS clients from a product to a consignment model in the third quarter of 2023.

The increase in total revenue was due primarily to a 10.6% increase in the average order value, offset by a 6.1% decrease in Active Buyers and a 0.6% decrease in Orders.

Revenue $ 310,813 $ 260,031 $ 50,782 19.5 %

Revenue increased $50.8 million, or 19.5%, for the year ended December 31, 2025 as compared to the same period in 2024.

The growth in revenue was mainly driven by a 25.3% increase in Orders, supported by higher engagement from new buyers acquired in 2025.

The growth was partially offset by a 0.6% decrease in average order value, as well as higher discounts and changes in seller payout mix.

These trends reflect the continued strength in our core marketplace business and our ongoing focus on driving platform growth.

Year Ended December 31, Change

1 unchanged sentence

(in thousands, except percentages)

Cost of consignment revenue $ 45,599 $ 39,732 $ 5,867 14.8 %

Cost of product revenue 7,307 20,304 (12,997) (64.0) %

Total cost of revenue $ 52,906 $ 60,036 $ (7,130) (11.9) %

Cost of revenue

$ 64,060 $ 52,906 $ 11,154 21.1 %

Gross profit $ 246,753 $ 207,125 $ 39,628 19.1 %

Gross margin 79.4 % 79.7 %

Consignment revenue is recognized net of seller payouts.

Seller payouts related to product revenue are included as a component of cost of product revenue.

As such, product revenue has a lower gross margin than consignment revenue.

Gross margin was 79.7% and 76.8% for the years ended December 31, 2024 and 2023, respectively, representing an increase of 290 basis points.

The increase in gross margin for the year ended December 31, 2024 as compared to the same period in 2023 was primarily driven by a significantly higher proportion of revenue from the consignment model, which has a higher gross margin than the product model.

The transition of our RaaS clients to the consignment model in 2023 contributed to the growth in our consignment revenue, positively impacting our gross margin.

Consignment Gross Margin

Year Ended December 31, Change

2024 2023 Amount %

(in thousands, except percentages)

Cost of consignment revenue $ 45,599 $ 39,732 $ 5,867 14.8 %

Consignment gross margin 81.5 % 81.4 %

Consignment gross margin was 81.5% and 81.4% for the years ended December 31, 2024 and 2023, respectively, remaining relatively flat with a modest increase of 10 basis points, primarily driven by slightly lower outbound shipping and labor costs.

Product Gross Margin

Year Ended December 31, Change

2024 2023 Amount %

(in thousands, except percentages)

Cost of product revenue $ 7,307 $ 20,304 $ (12,997) (64.0) %

Product gross margin 47.2 % 55.3 %

Product gross margin was 47.2% and 55.3% for the years ended December 31, 2024 and 2023, respectively, representing a decrease of 810 basis points.

The decrease in product gross margin for the year ended December 31, 2024 as compared to the same period in 2023 was primarily due to a 840 basis point increase in product inventory costs.

This decrease was partially offset by a 30 basis point decrease in shipping, labor, and packaging costs.

The significant decline in cost of product revenue was primarily driven by the transition of our RaaS clients to the consignment model in 2023.

Gross margin was 79.4% and 79.7% for the years ended December 31, 2025 and 2024, respectively, representing a decrease of 30 basis points.

Overall, gross margin remained relatively stable year over year, with the decrease primarily driven by higher outbound shipping and packaging costs.

Operations, Product and Technology

3 unchanged sentences

Operations, product, and technology $ 152,859 $ 142,210 $ 10,649 7.5 %

Operations, product, and technology as a percentage of total revenue 54.7 % 55.4 %

Operations, product, and technology expenses decreased $1.1 million or 0.8% for the year ended December 31, 2024 as compared to the same period in 2023.

The decrease was primarily driven by a $4.6 million decrease in personnel-related costs following our workforce reorganization in March 2024 and a $0.9 million decrease in facilities, technology and other costs, partially offset by a $3.0 million increase in accelerated depreciation of certain warehouse equipment , a $0.8 million increase in inbound shipping related to consignment revenue, and a $0.6 million increase in severance costs as a result of our workforce reorganization.

The decrease in operations, product, and technology expenses as a percentage of total revenue was primarily due to a decrease in operations, product, and technology spend offset by an increase in total revenue, reflecting our ongoing efforts to optimize costs, improve operational efficiency, and leverage economies of scale.

Operations, product, and technology as a percentage of revenue

49.2 % 54.7 %

Operations, product, and technology expenses increased $10.6 million or 7.5% for the year ended December 31, 2025 as compared to the same period in 2024, while decreasing as a percentage of revenue.

The increase in absolute dollars was primarily due to a $9.0 million increase in personnel-related costs, primarily driven by higher distribution center headcount, a $1.8 million increase in inbound shipping costs driven by higher supply volume, and a $1.1 million impairment charge related to a warehouse lease incurred in 2025.

The increase was partially offset by a $1.2 million decrease in facilities, technology and other distribution center-related costs.

Overall, the decrease in operations, product, and technology expenses as a percentage of revenue reflects improved operating efficiency, cost optimization efforts, and benefits from economies of scale.

Year Ended December 31, Change

2 unchanged sentences

Marketing $ 58,982 $ 48,639 $ 10,343 21.3 %

Marketing as a percentage of total revenue 18.7 % 19.9 %

Marketing expenses decreased $2.7 million or 5.3% for the year ended December 31, 2024 as compared to the same period in 2023.

The decrease was primarily due to a $5.6 million decrease in personnel-related costs following our workforce reorganization in March 2024, of which $3.0 million was related to stock-based compensation expense, partially offset by a $2.7 million increase in advertising costs and a $0.2 million increase in facilities, technology and other costs.

The decrease in marketing expenses as a percentage of total revenue was due to a decrease in marketing spend offset by an increase in total revenue, reflecting our efforts to optimize marketing efficiency while leveraging higher revenue growth.

Marketing as a percentage of revenue 19.0 % 18.7 %

Marketing expenses increased $10.3 million or 21.3% for the year ended December 31, 2025 as compared to the same period in 2024.

The increase was primarily due to a $9.6 million increase in advertising costs and a $1.4 million increase in professional services, both related to our marketing initiatives aimed at driving customer engagement and platform growth.

This increase was partially offset by a $0.4 million decrease in personnel-related costs, primarily due to severance costs incurred in the prior year related to our March 2024 workforce reorganization, and a $0.3 million decrease in facility, technology, and other costs.

The marketing expenses as a percentage of revenue remained relatively consistent year over year.

Sales, General and Administrative

3 unchanged sentences

Sales, general and administrative $ 56,658 $ 56,895 $ (237) (0.4) %

Sales, general and administrative as a percentage of total revenue 21.9 % 21.9 %

Sales, general, and administrative expenses remained relatively flat, with a modest increase of $0.2 million or 0.3% for the year ended December 31, 2024 as compared to the same period in 2023.

The increase was primarily due to a $1.0 million increase in facilities, technology, and other costs, partially offset by a $0.8 million decrease in personnel-related costs following our workforce reorganization in March 2024.

Sales, general and administrative as a percentage of revenue 18.2 % 21.9 %

Sales, general, and administrative expenses remained relatively stable year over year, with a decrease of $0.2 million or 0.4% for the year ended December 31, 2025 as compared to the same period in 2024.

The decrease was primarily due to a $4.4 million decrease in personnel-related costs, mainly attributable to lower stock-based compensation expense and severance costs incurred in the prior year related to our March 2024 workforce reorganization.

This decrease was partially offset by a $1.8 million increase in payment processing fees and a $1.5 million increase in customer appeasement costs, both largely driven by higher order volume during the period, as well as a $0.8 million increase in professional services and other corporate costs.

The decrease in sales, general, and administrative expenses as a percentage of revenue was primarily due to increased operating leverage resulting from higher revenue and lower overall costs.

Interest Expense

3 unchanged sentences

Interest expense $ (1,919) $ (2,525) $ 606 (24.0) %

Interest expense increased $0.3 million for the year ended December 31, 2024 as compared to the same period in 2023.

This increase was primarily due to a $0.6 million capitalization of interest costs in the first quarter of 2023 in conjunction with the build-out of our distribution centers, which did not recur in 2024, partially offset by $0.3 million in lower interest costs in 2024 due to reduced outstanding balances.

Interest expense decreased $0.6 million or 24.0% for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to a lower interest rate environment and reduced outstanding debt balances.

Other Income, Net

4 unchanged sentences

$ 3,510 $ 3,174 $ 336 10.6 %

Other income, net increased $0.3 million for the year ended December 31, 2024 as compared to the same period in 2023.

The increase was primarily due to a $0.7 million increase in interest income from our marketable securities due to a higher interest rate environment, partially offset by a $0.4 million decrease in claim proceeds for lost shipments.

Other income, net increased $0.3 million or 10.6% for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to $1.5 million of gains related to non-marketable equity investments, partially offset by a $0.9 million decrease in interest income resulting from lower interest rates and $0.3 million in legal settlement and related fees.

Liquidity and Capital Resources

We have historically generated negative cash flows from operations and have primarily financed our operations through private and public sales of equity securities and debt.

As of December 31, 2024, we had cash, cash equivalents and short-term marketable securities of $44.2 million.

Additionally, we have a term loan facility (“Term Loan”) under which $22.5 million remained available to be drawn as of December 31, 2024 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date.

We generated positive cash flows from continuing operations of $10.7 million for the year ended December 31, 2025.

We have primarily financed our operations through private and public sales of equity securities and a term loan facility (“Term Loan”).

As of December 31, 2025, we had cash, cash equivalents, restricted cash and short-term marketable securities of $53.1 million.

Additionally, we have a Term Loan under which $22.5 million remained available to be drawn as of December 31, 2025 for the purchase of certain equipment, and we were in compliance with our debt covenants under the Term Loan as of that date.

See Note 7, Long-Term Debt , to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for a further discussion on our Term Loan.

1 unchanged sentence

Our primary sources of liquidity are cash flows generated from operations, cash on hand and borrowings available under the Term Loan.

Our primary use of cash includes seller payouts and product inventory costs, operating costs such as distribution network spend, product and technology expenses, marketing expenses, personnel expenses and other expenditures necessary to support our operations and our growth.

Our primary use of cash includes seller payouts, operating costs such as distribution network spend, product and technology, marketing, personnel-related expenses, and other expenditures necessary to support our operations and our growth, as well as repayments on our Term Loan.

Additionally, our primary capital expenditures are related to the set-up, expansion and/or automation of our distribution network.

Based upon our current operating plans, we believe that our existing cash, cash equivalents, short-term marketable securities, and remaining availability under the Term Loan will be sufficient for at least the next 12 months to meet our short- and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term.

Based upon our current operating plans, we believe that our existing cash, cash equivalents and short-term marketable securities will be sufficient for at least the next 12 months to meet our short- and long-term capital requirements, and we do not anticipate expanding our distribution network to include additional locations in the near term.

Our cash flow forecast is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Our future capital requirements will depend on many factors, including but not limited to, the timing of our increased distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings and new RaaS clients, the continuing growth of our marketplaces and overall economic conditions.

Our future capital requirements will depend on many factors, including but not limited to, the timing of our increased distribution center automation and expansion plans to support planned revenue growth, the expansion of sales and marketing activities, the potential introduction of new offerings, the continuing growth of our marketplaces and overall economic conditions.

However, we expect that our capital expenditures will remain modest in 2026.

See the section titled “Risk Factors—Risks Relating to Our Indebtedness and Liquidity—We may require additional capital to support business growth, and this capital might not be available or may be available only by diluting existing stockholders.”

See Part I, Item 1A, Risk Factors , under “Risks Relating to Our Indebtedness and Liquidity— We may require additional capital to support business growth, and this capital might not be available or may be available only by diluting existing stockholders ” in this Annual Report on Form 10-K.

The following table summarizes our cash flows for the periods indicated:

11 unchanged sentences

Changes in Cash Flows from Continuing Operating Activities

Net cash provided by continuing operating activities was $4.9 million for the year ended December 31, 2024, compared to net cash used of $9.8 million for the same period in 2023.

The $14.7 million increase in continuing operating cash inflows was primarily driven by a $12.4 million reduction in our loss from continuing operations, offset by a $2.2 million decrease in non-cash charges, and $4.5 million of improvements in operating assets and liabilities.

This Improvement in operating assets and liabilities was primarily due to:

a $12.2 million increase in accounts payables, accrued and other liabilities, primarily reflecting the timing of payments and increased vendor spending;

a $3.9 million decrease in accounts receivable due to timing of cash receipts from payment processors;

and a $1.0 million increase in operating lease liabilities.

This change was partially offset by a $10.7 million decrease in seller payables, primarily due to timing of seller credit cash-outs or redemptions and conversions to gift cards, as well as a $1.5 million decrease in cash inflow from inventory, reflecting a shift in mix from product to consignment following the transition of our RaaS partners to the consignment model in late 2023.

Net cash provided by continuing operating activities was $10.7 million for the year ended December 31, 2025, compared to $4.9 million for the same period in 2024.

The $5.7 million increase in net cash provided by continuing operating activities was driven by an $8.9 million improvement in loss from continuing operations adjusted for non-cash items, reflecting higher revenue and lower operating losses from continuing operations.

This improvement was partially offset by a $3.1 million higher net use of cash from changes in operating assets and liabilities, which primarily reflected $8.4 million of cash used for accounts payable, accrued and other liabilities reflecting the timing of vendor payments and recognition of breakage revenue from gift cards, and $3.3 million of cash used for other assets reflecting the timing of payments and receipts associated with prepaid expenses and other receivables and change in inventory balances following the transition from a product to a consignment model, partially offset by $8.8 million of cash provided by seller payable, primarily reflecting increased seller credit issuance and the timing of conversion to gift cards.

Changes in Cash Flows from Continuing Investing Activities

Net cash used in continuing investing activities was $10.3 million for the year ended December 31, 2024, compared to net cash provided of $46.6 million for the same period in 2023.

The $56.8 million increase in continuing investing cash outflows was primarily driven by a $49.5 million decrease in maturities in marketable securities and a $13.9 million increase in purchases of marketable securities, partially offset by a $6.5 million decrease in purchases of property and equipment following the completion of the first phase of our Texas distribution center build-out.

Net cash used in continuing investing activities was $7.2 million for the year ended December 31, 2025, compared to $10.3 million for the same period in 2024.

The $3.1 million decrease in continuing investing cash outflows was primarily driven by an $11.1 million decrease in purchases of marketable securities, partially offset by a $4.1 million decrease in maturities in marketable securities and a $3.9 million increase in purchases of property and equipment.

Changes in Cash Flows from Continuing Financing Activities

Net cash used in continuing financing activities was $4.4 million for the year ended December 31, 2024, compared to net cash used of $3.6 million for the same period in 2023.

The $0.8 million increase in continuing financing cash outflows was primarily driven by a $1.5 million decrease in proceeds from issuance of stock-based awards, partially offset by a $0.7 million increase in payroll taxes paid on stock-based award activity.

Net cash used in continuing financing activities was $0.4 million for the year ended December 31, 2025, compared to $4.4 million for the same period in 2024.

The $4.0 million decrease in continuing financing cash outflows was primarily driven by a $24.3 million increase in proceeds from issuance of stock-based awards, driven by a higher stock price, partially offset by a $20.3 million increase in payroll taxes paid on stock-based award activity.

Contractual Obligations

16 unchanged sentences

We retain a percentage of the proceeds received as payment for our consignment service.

We report consignment revenue on a net basis as an agent and not the gross amount collected from the buyer.

We recognize consignment revenue upon purchase of the seller’s secondhand item by the buyer.

We also generate revenue from the sale of our purchased inventory which we refer to as product revenue.

We sell our purchased inventory mainly through our online marketplaces.

We recognize product revenue on a gross basis.

Online sales and sales to our retail partners are recognized upon shipment of the purchased secondhand items to the buyer.

Both consignment and product revenue are recognized net of discounts, incentives and returns.

We report revenue on a net basis as an agent and not the gross amount collected from the buyer.

We recognize revenue upon purchase of the seller’s secondhand item by the buyer.

Revenue is recognized net of discounts, incentives and returns.

Sales tax assessed by governmental authorities is excluded from revenue.

Loyalty points and rewards are accounted for as separate performance obligations and accrued as deferred revenue in the amount of the transaction price allocated to the points and rewards.

The allocated transaction price is based on the estimated fair value per point, net of breakage.

Breakage is estimated based on our historical redemption rates.

Revenue is recognized when the loyalty rewards are redeemed or expire.

We recognize revenue from gift cards when the gift cards are redeemed by the customer.

1 unchanged sentence

Previously, breakage revenue was estimated when gift card redemption was deemed remote.

Beginning in 2024, with more historical data available, breakage revenue is estimated based upon historical customer redemption patterns.

Beginning in the fourth quarter of 2024, with more historical data available, breakage revenue is estimated based upon historical customer redemption patterns.

Judgment is required in determining the appropriate grouping of gift cards for analyzing breakage rates, redemption patterns, and estimating the ultimate value of gift cards not expected to be redeemed.

22 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis