ThredUp Inc. 10-K

Item 8. Financial Statements and Supplementary Data Page Number THREDUP INC. Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP (PCAOB ID: 34 ) 58 Consolidated Balance Sheets 59 Consolidated Statements of Operations 60 Consolidated Statements of Comprehensive Loss 61 Consolidated Statements of Stockholders’ Equity 62 Consolidated Statements of Cash Flows 63 Notes to Consolidated Financial Statements 64 57 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of ThredUp Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ThredUp Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP San Francisco, California March 2, 2026 We have served as the Company’s auditor since 2022. 58 Table of Contents THREDUP INC. CONSOLIDATED BALANCE SHEETS December 31, 2025 2024 (in thousands, except par value amounts) ASSETS Current assets: Cash and cash equivalents $ 38,629 $ 31,851 Marketable securities 9,498 12,325 Accounts receivable, net 2,437 3,567 Other current assets 6,112 9,179 Total current assets 56,676 56,922 Operating lease right-of-use assets 25,376 28,853 Property and equipment, net 67,243 68,480 Goodwill 10,746 10,746 Other assets 7,204 6,224 Total assets $ 167,245 $ 171,225 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 10,329 $ 8,326 Accrued and other current liabilities 24,511 29,856 Seller payable 18,264 15,142 Operating lease liabilities, current 5,401 4,345 Current portion of long-term debt 3,875 3,855 Total current liabilities 62,380 61,524 Operating lease liabilities, non-current 28,580 32,489 Long-term debt, net of current portion 14,276 18,151 Other non-current liabilities 2,816 2,760 Total liabilities 108,052 114,924 Commitments and contingencies (Note 10) Stockholders’ equity: Class A and B common stock, $ 0.0001 par value; 1,120,000 shares authorized as of December 31, 2025 and 2024; 127,027 and 116,134 shares issued and outstanding as of December 31, 2025 and 2024, respectively 12 11 Additional paid-in capital 635,253 612,148 Accumulated other comprehensive income 3 3 Accumulated deficit ( 576,075 ) ( 555,861 ) Total stockholders’ equity 59,193 56,301 Total liabilities and stockholders’ equity $ 167,245 $ 171,225 The accompanying notes are an integral part of these consolidated financial statements. 59 Table of Contents THREDUP INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2025 2024 (in thousands, except per share amounts) Revenue $ 310,813 $ 260,031 Cost of revenue 64,060 52,906 Gross profit 246,753 207,125 Operating expenses: Operations, product and technology 152,859 142,210 Marketing 58,982 48,639 Sales, general and administrative 56,658 56,895 Total operating expenses 268,499 247,744 Operating loss ( 21,746 ) ( 40,619 ) Interest expense ( 1,919 ) ( 2,525 ) Other income, net 3,510 3,174 Loss before provision for income taxes ( 20,155 ) ( 39,970 ) Provision for income taxes 59 29 Loss from continuing operations ( 20,214 ) ( 39,999 ) Loss from discontinued operations, net of tax — ( 36,987 ) Net loss $ ( 20,214 ) $ ( 76,986 ) Weighted-average shares used to compute loss per share, basic and diluted 121,693 111,960 Loss from continuing operations per share, basic and diluted $ ( 0.17 ) $ ( 0.36 ) Loss from discontinued operations per share, basic and diluted — ( 0.33 ) Total loss per share, basic and diluted $ ( 0.17 ) $ ( 0.69 ) The accompanying notes are an integral part of these consolidated financial statements. 60 Table of Contents THREDUP INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Year Ended December 31, 2025 2024 (in thousands) Net loss $ ( 20,214 ) $ ( 76,986 ) Other comprehensive income, net of tax: Foreign currency translation adjustments — 2,370 Unrealized gain on available-for-sale securities — 8 Total other comprehensive income — 2,378 Total comprehensive loss $ ( 20,214 ) $ ( 74,608 ) The accompanying notes are an integral part of these consolidated financial statements. 61 Table of Contents THREDUP INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock Shares Amount Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Balance as of December 31, 2023 108,784 $ 11 $ 585,156 $ ( 2,375 ) $ ( 478,875 ) $ 103,917 Issuance of common stock from exercise of stock options, restricted stock units, and employee stock purchase plan 8,520 — 1,542 1,542 Stock-based compensation 27,403 27,403 Shares withheld for net share settlement ( 1,170 ) — ( 1,953 ) ( 1,953 ) Net loss ( 76,986 ) ( 76,986 ) Other comprehensive income 2,378 2,378 Balance as of December 31, 2024 116,134 11 612,148 3 ( 555,861 ) 56,301 Issuance of common stock from exercise of stock options, restricted stock units, and employee stock purchase plan 11,910 1 10,096 10,097 Stock-based compensation 19,519 19,519 Shares withheld for net share settlement ( 1,017 ) — ( 6,510 ) ( 6,510 ) Net loss ( 20,214 ) ( 20,214 ) Balance as of December 31, 2025 127,027 $ 12 $ 635,253 $ 3 $ ( 576,075 ) $ 59,193 The accompanying notes are an integral part of these consolidated financial statements. 62 Table of Contents THREDUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2025 2024 (in thousands) Cash flows from continuing operating activities: Loss from continuing operations $ ( 20,214 ) $ ( 39,999 ) Adjustments to reconcile loss from continuing operations to net cash provided by continuing operating activities: Depreciation and amortization 12,924 17,328 Stock-based compensation expense 19,003 25,847 Reduction in carrying amount of right-of-use assets 4,641 4,536 Impairment of long-lived assets 1,070 — Other ( 833 ) ( 16 ) Changes in operating assets and liabilities: Accounts receivable, net 1,130 1,482 Other current and non-current assets ( 366 ) 2,956 Accounts payable 1,421 3,907 Accrued and other liabilities ( 5,979 ) ( 561 ) Seller payable 3,122 ( 5,688 ) Operating lease liabilities ( 4,767 ) ( 4,889 ) Other non-current liabilities ( 500 ) — Net cash provided by continuing operating activities 10,652 4,903 Cash flows from continuing investing activities: Purchases of marketable securities ( 20,723 ) ( 31,776 ) Sale and maturities of marketable securities 24,029 28,100 Purchases of property and equipment ( 10,472 ) ( 6,584 ) Net cash used in continuing investing activities ( 7,166 ) ( 10,260 ) Cash flows from continuing financing activities: Repayment of debt ( 4,000 ) ( 4,000 ) Proceeds from issuance of stock-based awards 27,931 3,667 Payments of withholding taxes on stock-based awards ( 24,328 ) ( 4,059 ) Net cash used in continuing financing activities ( 397 ) ( 4,392 ) Net change in cash, cash equivalents and restricted cash from continuing operations 3,089 ( 9,749 ) Net cash flow used in discontinued operating activities — ( 4,005 ) Net cash flow used in discontinued investing activities — ( 6,641 ) Net change in cash, cash equivalents and restricted cash from discontinued operations — ( 10,646 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — ( 586 ) Net change in cash, cash equivalents and restricted cash 3,089 ( 20,981 ) Cash, cash equivalents and restricted cash, beginning of period 40,488 61,469 Cash, cash equivalents and restricted cash, end of period $ 43,577 $ 40,488 Supplemental disclosures of cash flow information: Cash paid for interest $ 1,804 $ 2,397 Supplemental disclosures of noncash investing and financing activities: Purchases of property and equipment included in accounts payable and accrued liabilities $ 1,897 $ 681 Right-of-use assets obtained in exchange for new lease liabilities $ 1,914 $ 5,293 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Contents THREDUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Description of Business ThredUp Inc. (“ThredUp” or the “Company”) was formed as a corporation in the State of Delaware in January 2009. ThredUp operates a large resale platform that enables consumers to buy and sell primarily secondhand apparel, shoes, and accessories. 2. Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and the related disclosures. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, the useful lives of property and equipment, allowance for sales returns, breakage on gift cards, stock-based compensation, lease liabilities, and goodwill. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of significant judgment. Reclassification Certain prior period amounts have been reclassified to conform to the current period’s presentation. Beginning in the first quarter of 2025, the Company 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, reflecting the immateriality of product revenue following the Company’s transition to a primarily consignment model. The Company also reclassified inventory to other current assets on the consolidated balance sheets and statements of cash flows to align with the combined presentation. These reclassifications had no impact on previously reported revenue, net loss, stockholders’ equity, or cash flows. Discontinued Operations During the fourth quarter of 2024, the Company divested 91 % of its European business and Bulgarian subsidiary, Remix, meeting the requirements for reporting Remix as a discontinued operation. Accordingly, Remix’s results during 2024, reflecting the period from the beginning of the year through the transaction date, including the loss on divestiture, are presented as discontinued operations in the consolidated statements of operations and excluded from continuing 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. Unless otherwise noted, amounts and disclosures in these Notes to Consolidated Financial Statements pertain to the Company’s continuing operations. See Note 14, Discontinued Operations , for further details on the transaction. New Accounting Pronouncements In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU”) 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes stage-based criteria and instead requires capitalization once a project is approved and it is probable that the project will be completed, unless significant development uncertainty exists. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. For the Company, the ASU will be effective for the annual period ending December 31, 2028. Early adoption is permitted. The Company is currently evaluating the potential impact on its consolidated financial statement disclosures. 64 Table of Contents In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient that permits entities to assume that conditions existing as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods. For the Company, the ASU will be effective for the annual period ending December 31, 2026. Early adoption is permitted. The Company is currently evaluating the potential impact of the ASU but does not expect its adoption to have a material impact on its consolidated financial statement disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which expands disclosures about a public entity’s expenses, including inventory, employee compensation, depreciation, intangible asset amortization, selling expenses and other expense categories. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. For the Company, the ASU will be effective for the annual period ending December 31, 2027. The Company is currently evaluating the potential impact on its consolidated financial statement disclosures. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company does not expect that the application of this standard will have an impact on our consolidated financial statements and disclosures. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 enhances disclosures within the income tax rate reconciliation and information disclosed related to income taxes paid, and requires disaggregation of certain financial statement captions between federal and state. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which is the annual period ended December 31, 2025 for the Company. The Company adopted ASU 2023-09 prospectively as of January 1, 2025, with no material impact on its consolidated financial statements. See Note 12, Income Taxes , for additional information. Revenue Recognition Revenue is recognized in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive for those goods and services. The Company generates the majority of its revenue from its core marketplace, which allows its buyers to browse and purchase resale items for apparel, shoes and accessories on behalf of sellers. The Company recognizes revenue through the following steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, it satisfies a performance obligation. Both buyers and sellers may be customers in the Company’s revenue arrangements. Sellers are the primary customer in a consignment arrangement. A contract with a customer exists when the end-customer purchases the goods obligating the Company to deliver the identified performance obligation(s). The Company requires authorization from a credit card or other payment method (such as PayPal), or verification of receipt of payment, before the products are shipped to buyers. The Company generally receives payments from buyers before payments to the sellers are due. 65 Table of Contents Consignment Arrangement The Company generates revenue primarily from the sale of secondhand apparel, shoes and accessories on behalf of sellers. The Company retains a percentage of the proceeds received as payment for its consignment service. The Company reports revenue on a net basis as an agent and not the gross amount collected from the buyer. Title to the consigned goods remain with the seller until transferred to the buyer, which occurs subsequent to purchase of the consigned goods and upon expiration of the allotted return period. The Company does not take title of consigned goods at any time except in certain cases where the consignment window expires or returned goods become Company-owned inventory. Additionally, revenue includes bag fees charged to sellers for processing Clean Out Bags. Revenue is generally recognized upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point. Revenue is also recognized on consigned good for which the consignment window has already expired and the Company has taken title to the consigned good. Revenue is recognized net of seller payouts, discounts, incentives and returns. Revenue from bag fees charged to sellers is recognized as the related items are sold to a buyer. Sales tax assessed by governmental authorities is excluded from revenue. Shipping Fees The Company charges shipping fees to buyers, which are included in revenue. Outbound shipping costs are accounted for in cost of revenue at the time revenue is recognized. Returns and Incentives The Company generally has a 14 -day return period, which may change from time to time, and recognizes a returns reserve based on historical experience, which is recorded in accrued and other current liabilities within the Company’s consolidated balance sheets and reduction of revenue within the Company’s consolidated statements of operations. Incentives include website discounts and customer credits. Incentives are treated as a reduction of revenue. Deferred Revenue Deferred revenue consists primarily of product revenue from items purchased but not shipped. Cash collections for items purchased but not shipped are generally recognized as revenue upon shipment. As of December 31, 2025 and 2024, the Company had $ 1.6 million and $ 1.9 million, respectively, in deferred revenue for such items in each period, included in accrued and other current liabilities within the Company’s consolidated balance sheets, and for which revenue was recognized shortly after the period end. Revenue from Loyalty Reward Redemption and Expiration The Company previously had a customer loyalty program, which allowed end-customers to earn and accumulate points with each qualifying purchase. Earned points could be redeemed for loyalty rewards, such as non-cashoutable shopping credit, free shipping, or waived restocking fee, which could be applied to future purchases or returns. Unredeemed points expired after one year from the date the points were earned. Reward coupons expired six months from the date the reward was claimed. Points earned on purchases were considered a material right, representing a separate performance obligation. The allocated consideration for the points earned through qualifying purchase transactions was deferred based on the standalone selling price of the points, adjusted for expected breakage in proportion to the pattern of redemption, and recorded within deferred revenue under accrued and other current liabilities within the Company’s consolidated balance sheets. Revenue was recognized for these performance obligations at a point in time when rewards were redeemed by the end customer or expired. Effective October 1, 2024, customers were no longer able to earn loyalty points and after March 31, 2025, they could no longer redeem any previously accumulated points. As of December 31, 2025 and 2024, the Company had a deferred revenue liability of $ 0 and $ 1.5 million, respectively, related to its customer loyalty program, which is included in accrued and other current liabilities within the Company’s consolidated balance sheets. The Company recognized $ 1.5 million and $ 11.5 million of revenue from loyalty reward redemptions and expirations for the years ended December 31, 2025 and 2024, respectively. 66 Table of Contents Gift Cards, Site Credits and Seller Payable The Company sells ThredUp gift cards on its e-commerce website and may also convert seller payables and site credits to ThredUp gift cards one year after issuance at the discretion of the Company. ThredUp gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a gift card liability at the time a gift card is delivered to the customer. As of December 31, 2025 and 2024, $ 3.9 million and $ 8.5 million, respectively, of gift card liability was included in accrued and other current liabilities within the Company’s consolidated balance sheets. Revenue from redemption of gift cards was not material for the years ended December 31, 2025 and 2024. The Company recognizes breakage revenue for the portion of gift card values that are not expected to be redeemed. Previously, breakage revenue was estimated when gift card redemption was deemed remote. 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. Breakage revenue was $ 8.6 million and $ 7.2 million for the years ended December 31, 2025 and 2024, respectively. The Company issues site credits for returns, which can be applied toward future charges but may not be converted into cash. Site credits may also be converted to ThredUp gift cards beginning after one year at the discretion of the Company. These credits are recognized as revenue when used. As of December 31, 2025 and 2024, $ 4.1 million and $ 3.8 million, respectively, of such customer site credits were included in accrued and other current liabilities within the Company’s consolidated balance sheets. Revenue recognized from the redemption of site credits was $ 50.1 million, and $ 43.2 million for the years ended December 31, 2025 and 2024, respectively. Seller payable includes amounts owed to sellers upon the purchase of sellers’ goods by the Company or by buyers. Amounts are initially provided as a credit to sellers (“seller credits”). These credits may be applied towards purchases from the Company, converted to third-party retailer or ThredUp gift cards, or redeemed for cash. As of December 31, 2025 and 2024, there was $ 18.3 million and $ 15.1 million, respectively, of seller payable within the Company’s consolidated balance sheets. Revenue recognized from the redemption of seller credits was $ 30.3 million and $ 22.9 million for the years ended December 31, 2025 and 2024, respectively. Segment Reporting The Company operates under one operating segment and one reportable segment as its chief operating decision maker, who is its Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. The Company does not have material intra-entity sales or transfers. The key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company’s consolidated loss from continuing operations, as reported in the consolidated statements of operations. Significant expense within operating loss, as well as within loss from continuing operations, include cost of revenue, operations, product and technology, marketing, and sales, general and administrative expenses, which are each separately presented in the consolidated statements of operations. Other segment items within loss from continuing operations include interest expense, other income, net, and provision for income taxes. The CODM manages the business using consolidated expense information, as well as regularly provided budgeted or forecasted expense information. Assets provided to the CODM are consistent with those reported on the consolidated balance sheets. Loss Per Share The Company follows the two-class method when computing loss per common share when shares issued meet the definition of participating securities. The two-class method determines loss per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The rights of the Class A common stock and Class B common stock are identical, other than voting rights. The undistributed earnings are allocated on a proportionate basis and the resulting loss per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis. 67 Table of Contents For periods in which the Company reports net losses, diluted loss per share is the same as basic loss per share, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Comprehensive Loss Comprehensive loss is comprised of net loss, foreign currency translation adjustments, and unrealized gains and losses on available-for-sale securities. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are comprised primarily of domestic and foreign bank accounts, commercial paper, and money market funds. Restricted cash primarily represents letters of credit with financial institutions held as collateral for facility leases. Restricted cash is classified non-current if the Company expects that the cash will remain restricted for a period greater than one year. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same such amounts shown in the Company’s consolidated statements of cash flows: December 31, 2025 2024 (in thousands) Cash and cash equivalents $ 38,629 $ 31,851 Restricted cash included in Other current assets 225 3,690 Restricted cash included in Other assets 4,723 4,947 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 43,577 $ 40,488 Marketable Securities The Company invests its excess cash in investment grade, short to intermediate-term, fixed income securities and recognizes the transaction on the trade date. The Company’s marketable securities are classified as available-for-sale in current assets because they represent investments of cash available for current operations. Marketable securities are reported at fair value with unrealized gains and losses reported, net of tax, as a separate component of accumulated other comprehensive gain (loss) until realized. The marketable securities are assessed periodically for impairments. Realized gains or losses and allowance for credit loss, if any, on available-for sale securities are reported in other income, net as incurred. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, marketable securities and accounts receivable. The Company deposits cash at major financial institutions, and at times, such cash may exceed federally insured limits. The credit risk is believed to be minimal due to the financial position of the depository institutions in which those deposits are held. The Company has not experienced any losses on deposits since inception. The Company’s investment policy restricts cash investments to highly liquid, short to intermediate-term, high grade fixed income securities, and as a result, the Company believes its cash equivalents and marketable securities represent minimal credit risk. As of December 31, 2025 and 2024, there were no customers that represented 10% or more of the Company’s accounts receivable balance. There were no customers that individually exceeded 10% of the Company’s revenue for the years ended December 31, 2025 and 2024. 68 Table of Contents Accounts Receivable, Net Accounts receivable consists of amounts due from payment processors and trade customers that do not bear interest. The Company records an allowance for current expected credit losses for estimated losses inherent in its trade accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted for current market conditions, the financial condition of the customer, the amount of receivables in dispute, and the current receivables aging and payment patterns. The Company does not have any off-balance sheet credit exposure related to its customers. The allowance for current expected credit losses was not material as of December 31, 2025 and 2024. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment and amortization of leasehold improvement are computed on a straight-line basis over the estimated useful lives of the related assets, as follows: Asset Category Estimated Useful Life Computers and software Up to 3 years Furniture and fixtures Up to 5 years Machinery and equipment Up to 10 years Leasehold improvements Shorter of economic life or remaining lease term Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the Company’s consolidated balance sheets and any resulting gain or loss is reflected in the consolidated statements of operations in the period realized. Internal-Use Software The Company capitalizes qualifying proprietary software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and placed in service for its intended use. Capitalization ceases when the software is substantially complete and ready for its intended use including the completion of all significant testing. Costs related to preliminary project activities and post implementation operating activities are expensed as incurred. Amounts capitalized are amortized over two years on a straight-line basis. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If such review indicates that the carrying amount of the asset group is not recoverable, the carrying amount of such assets is reduced to their fair value. For the year ended December 31, 2025, the Company recorded a $ 1.1 million impairment of long-lived assets related to a warehouse lease asset group, including a right-of-use asset and related leasehold improvements, which was recorded within operations, product and technology on the consolidated statements of operations. No such impairments were recorded for the year ended December 31, 2024, related to continuing operations. 69 Table of Contents Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company’s goodwill originated from its acquisition of Remix Global EAD (“Remix”) in 2021. Upon the divestiture of Remix in 2024, $ 0.7 million of goodwill was allocated to the disposed business based on the relative fair values of the divested business and the portion retained, with the remaining goodwill retained by the Company’s reporting unit following the divestiture. Goodwill is not subject to amortization, but is reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company performed its annual goodwill impairment assessment during the fourth quarter. For the year ended December 31, 2025, the Company completed a qualitative assessment and determined that it is more likely than not that the fair value of its single reporting unit is greater than its carrying value. If it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying amount or if a qualitative assessment is not performed, then the Company would perform a quantitative goodwill impairment test as required, in which it would use a discounted cash flow approach to estimate the fair value of the reporting unit. If the fair value of the reporting unit is less than the carrying value, then a goodwill impairment amount is recorded for the difference. During the years ended December 31, 2025 and 2024, there were no additions to or impairment of goodwill. Asset Retirement Obligations The Company records asset retirement obligations (“AROs”) for the estimated cost of restoring its automated warehouse facilities to the specific condition required in accordance with the terms of its lease agreement, upon termination of the lease. AROs represent the present value of the expected costs and timing of the related obligations incurred. The ARO assets and liabilities are recorded in property and equipment, net within the machinery and equipment line item and other non-current liabilities, respectively, within the Company’s consolidated balance sheets. The Company records accretion expense, which represents the increase in the ARO, over the remaining estimated duration of the lease including renewal periods that are included in the lease term. Accretion expense is recorded in operations, product and technology expense in the consolidated statements of operations using accretion rates based on credit adjusted risk-free interest rates. Leases Under ASC 842, the Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Lessees are required to classify leases as either finance or operating leases and to record a right-of-use (“ROU”) asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. The Company determines the initial classification and measurement of its ROU assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. ROU assets are based on the measurement of the lease liability and also include any lease payments made prior to or on lease commencement and exclude lease incentives and initial direct costs incurred, as applicable. As the implicit rate in the Company's leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The Company gives consideration to its existing credit arrangements, term of the lease, total lease payments and adjust for the impacts of collateral, as necessary, when calculating its incremental borrowing rates. The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise any such options. Lease costs for the Company's operating leases are recognized on a straight-line basis within operating expenses over the lease term. The Company has elected to not separate lease and non-lease components for real estate leases and, as a result, accounts for lease and non-lease components as one component. The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less. For these leases, lease payments are recognized on a straight-line basis over the lease term and variable payments in the period in which the obligation is incurred. 70 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income on the years in which those temporary differences are expected to be recovered and settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. Cost of Revenue Cost of revenue primarily consists of outbound shipping, outbound labor and packaging costs. The classification of expenses varies across the retail industry. Accordingly, our cost of revenue may not be comparable to those of other companies in the retail industry. Operations, Product and Technology Operations, product and technology expenses consist primarily of distribution center operating costs and product and technology expenses. Distribution center operating costs 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 the distribution centers, merchandise science, website development and related expenses for these departments. Operations, product and technology expenses also include an allocation of corporate facilities and information technology costs including equipment, depreciation and rent. Research and development costs from continuing operations related to our technology were approximately $ 32.1 million and $ 31.3 million, during the years ended December 31, 2025 and 2024, respectively. Marketing Marketing costs consist primarily of advertising, public relations expenditures and personnel costs for employees engaged in marketing. Marketing costs also include an allocation of corporate facilities and information technology costs including equipment, depreciation and rent. Advertising and other promotional costs from continuing operations included in marketing within the Company’s consolidated statements of operations are expensed as incurred and were approximately $ 51.1 million and $ 41.5 million for the years ended December 31, 2025 and 2024, respectively. Sales, General and Administrative Sales, general and administrative expenses consist of personnel costs for employees involved in general corporate functions, including accounting, finance, tax, legal and people services, and customer service. Sales, general and administrative also includes payment processing fees, professional fees and allocation of corporate facilities and information technology costs such as equipment, depreciation and rent. Stock-Based Compensation Stock-based compensation costs are based on the fair values on the date of grant for restricted stock unit awards and stock options and on the date of enrollment for the employee stock purchase plan (“ESPP”). The fair values of restricted stock unit awards are based on ThredUp’s stock price on the date of grant. The fair values of stock options and ESPP are estimated using the Black-Scholes option-pricing model. The fair values of share-based awards are recognized as compensation expense over the requisite service period or over the period in which the related services are received (generally the vesting period), using the straight-line method. The determination of fair value for share-based awards on the date of grant using an option pricing model requires management to make certain assumptions regarding subjective variables. 71 Table of Contents The Company accounts for forfeitures as they occur. Fair Value Measurements Fair value accounting is applied to all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). As of December 31, 2025 and 2024, the carrying amount of accounts receivable, other current assets, other assets, accounts payable, seller payable and accrued and other current liabilities approximated their fair value due to their relatively short maturities. Management believes the terms of its long-term variable-rate debt reflect current market conditions for an instrument with similar terms and maturity, therefore the carrying value of the Company’s debt approximated its fair value. Assets and liabilities recorded at fair value on a recurring basis on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1 — Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 — Inputs (other than quoted prices in active markets included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 3. Financial Instruments and Fair Value Measurements Fair Value Measurements - Recurring Basis The following tables provide information about the Company’s financial instruments that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such values as of December 31, 2025 and 2024: December 31, 2025 Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents: Money market funds $ 5,030 $ — $ — $ 5,030 Commercial paper — 6,681 — 6,681 Corporate debt securities — 849 — 849 U.S. government agency bonds — 697 — 697 Total cash equivalents 5,030 8,227 — 13,257 Marketable securities: Corporate debt securities — 2,374 — 2,374 U.S. treasury securities — 6,126 — 6,126 U.S. government agency bonds — 998 — 998 Total marketable securities — 9,498 — 9,498 Total assets at fair value $ 5,030 $ 17,725 $ — $ 22,755 72 Table of Contents December 31, 2024 Level 1 Level 2 Level 3 Total (in thousands) Assets: Cash equivalents: Money market funds $ 1,061 $ — $ — $ 1,061 Commercial paper — 7,923 — 7,923 U.S. treasury securities — 500 — 500 Total cash equivalents 1,061 8,423 — 9,484 Marketable securities: U.S. treasury securities — 8,122 — 8,122 U.S. government agency bonds — 3,704 — 3,704 Commercial paper — 499 — 499 Total marketable securities — 12,325 — 12,325 Total assets at fair value $ 1,061 $ 20,748 $ — $ 21,809 As of December 31, 2025 and 2024, the Company’s cash equivalents and marketable securities approximated their estimated fair value. As such, the unrealized gains or losses related to the Company’s cash equivalents and marketable securities were not material. For the Company’s marketable securities, which were all classified as available-for-sale, the Company utilizes third-party pricing services to obtain fair value. Third-party pricing methodologies incorporate bond terms and conditions, current performance data, proprietary pricing models, real-time quotes from contributing dealers, trade prices and other market data. The Company determined that the declines in the fair value of its marketable securities were not driven by credit-related factors. During the years ended December 31, 2025 and 2024, the Company did not recognize any losses on its marketable securities due to credit-related factors. As of December 31, 2025, the Company’s money market funds, were valued using Level 1 inputs because they are valued using quoted prices in active markets. The Company’s commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency bonds were valued using Level 2 inputs because they are valued using quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. As of December 31, 2025 and 2024, the Company had no assets or liabilities classified within Level 3 of the fair value hierarchy. There were no transfers into or out of Level 3 during the year ended December 31, 2025. As of December 31, 2025, of the $ 9.5 million carrying amount of marketable securities, all had a contractual maturity date of less than one year. Fair Value Measurements - Nonrecurring Basis The Company holds a privately held, non-marketable equity investment in Remix, of which 91 % was divested in 2024. As part of the divestiture, the Company retained a minority equity interest and does not have a significant influence. The investment is accounted for under the measurement alternative as it does not have a readily determinable fair value. Under this approach, the investment is initially recorded at cost, adjusted for impairment if any, and remeasured upon observable transactions for the same or similar investments issued by the investee. See Note 14, Discontinued Operations, for additional information regarding the divestiture. During the year ended December 31, 2025, the Company acquired an additional equity investment in Remix of $ 0.5 million and recorded a $ 0.8 million gain within other income, net on the consolidated statement of operations, upon the remeasurement of its initial equity investment based on an observable transaction involving new equity issued by the investee. In determining the fair value, the Company used the transaction price as an observable input and considered the preferences and rights of the equity securities issued, as well as the lack of marketability of the investment. Due to the use of significant unobservable inputs, the investment is classified as a Level 3 asset within the fair value hierarchy. As of December 31, 2025 and 2024, the carrying amount of the non-marketable equity investment was $ 1.8 million and $ 0.5 million, respectively, and was included in other assets on the Company’s consolidated balance sheets. No 73 Table of Contents impairments or downward observable price adjustments were recognized during the year ended December 31, 2025 or cumulatively. 4. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, 2025 2024 (in thousands) Property and equipment, at cost: Machinery and equipment $ 84,745 $ 78,908 Leasehold improvements 23,457 23,901 Internal-use software 13,444 11,681 Computers and software 7,909 7,396 Construction in progress 6,858 5,583 Furniture and fixtures 2,196 2,128 Total property and equipment, at cost 138,609 129,598 Less: accumulated depreciation and amortization ( 71,366 ) ( 61,118 ) Property and equipment, net $ 67,243 $ 68,480 Depreciation and amortization expense of property and equipment was $ 12.9 million and $ 17.3 million for the years ended December 31, 2025 and 2024, respectively. 5. Balance Sheet Components Accrued and other current liabilities consisted of the following: December 31, 2025 2024 (in thousands) Gift card and site credit liabilities $ 8,026 $ 12,234 Accrued vendor liabilities 4,844 3,916 Allowance for returns 3,814 3,052 Accrued taxes 2,571 2,608 Accrued compensation 2,527 3,438 Deferred revenue 1,573 3,328 Accrued other 1,156 1,280 Total $ 24,511 $ 29,856 6. Leases The Company leases certain office space and distribution centers with original lease terms ranging from one to twelve years . These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional one to ten years . For certain leases, these optional periods have been considered in the determination of the right-of-use assets and lease liabilities associated with these leases as the Company has determined it is reasonably certain it will exercise the renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 74 Table of Contents As of December 31, 2025, future minimum undiscounted lease payments were as follows: Amount (in thousands) 2026 $ 7,352 2027 7,356 2028 7,015 2029 5,704 2030 4,586 Thereafter 8,652 Total lease payments 40,666 Less: imputed interest ( 6,685 ) Present value of lease liabilities 33,981 Less: current lease liabilities ( 5,401 ) Non-current lease liabilities $ 28,580 Security deposits and letters of credits used to secure the leases were $ 0.2 million and $ 4.9 million, respectively, as of December 31, 2025 and $ 0.2 million and $ 5.0 million, respectively, as of December 31, 2024. The components of lease cost are as follows: Year Ended December 31, 2025 2024 (in thousands) Lease cost: Fixed operating lease cost $ 6,870 $ 6,864 Short-term lease cost 495 438 Variable lease cost (1) 2,985 2,580 Total lease cost $ 10,350 $ 9,882 (1) Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred. In the fourth quarter of 2025, the Company recorded an impairment charge of $ 1.1 million related to a warehouse lease asset group, including an ROU asset and related leasehold improvements. The impairment charge was recorded within operations, product and technology in the Company’s consolidated statements of operations for the year ended December 31, 2025. Fair value was estimated using a market-based approach, considering third-party broker information, market conditions, and its remaining lease term. The weighted-average remaining lease term and weighted-average discount rate used to calculate the present value of lease liabilities are as follows: December 31, 2025 2024 Weighted-average remaining lease term 5.9 years 6.9 years Weighted-average discount rate 6.3 % 6.2 % Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2025 2024 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 7,062 $ 7,206 75 Table of Contents 7. Long-Term Debt In February 2019, the Company entered into a loan and security agreement (“Term Loan”) with Western Alliance Bank for an aggregate amount of up to $ 40.0 million and incurred an immaterial amount of debt issuance costs, which were recorded on the Company’s consolidated balance sheets and are being amortized over the life of the Term Loan using the effective-interest method. Following subsequent amendments, as of December 31, 2025, the Term Loan had a maturity date of July 14, 2027 and provided for an aggregate borrowing amount of up to $ 48.8 million, of which $ 22.5 million remained available and was designated for the purchase of certain equipment. The Term Loan bore interest, as of December 31, 2025, at the prime rate published in the Wall Street Journal, with a floor of 4.75 %, plus a margin of 1.25 %. The Term Loan required the Company to comply with certain financial covenants, including, among other things, liquidity requirements, performance metrics, and a debt service coverage ratio. The Term Loan also contained affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, redeeming and repurchasing certain other indebtedness, loans and investments, additional indebtedness, liens, mergers, asset sales and transactions with affiliates. In addition, the Term Loan contained customary events of default. As of December 31, 2025, the Company was in compliance with its debt covenants under the Term Loan. As of December 31, 2025, the Term Loan was payable in consecutive monthly installments. Interest was due monthly on amounts outstanding under the Term Loan. The Company was also permitted to make voluntary prepayments without penalty or premium at any time. As of December 31, 2025 and 2024, the effective interest rate for borrowings under the Term Loan was 8.94 % and 9.71 %, respectively. During the years ended December 31, 2025 and 2024, the Company did not make any borrowings under the Term Loan and repaid $ 4.0 million each year on amounts outstanding under the Term Loan. As of December 31, 2025 and 2024, the amount outstanding under the Term Loan was $ 18.3 million and $ 22.3 million, respectively. During the years ended December 31, 2025 and 2024, the Company incurred interest costs of $ 1.9 million and $ 2.5 million, respectively, related to the Term Loan. As of December 31, 2025, annual scheduled principal payments of the Term Loan were as follows: Amount (in thousands) 2026 $ 4,000 2027 14,333 Total principal payments 18,333 Less: unamortized debt discount ( 182 ) Less: current portion of long-term debt ( 3,875 ) Non-current portion of long-term debt $ 14,276 On January 30, 2026, the Company entered into certain Amendment No. 2 to Second Amended and Restated Loan and Security Agreement (the “Amendment”) with the lenders party thereto (the “Lenders”) and Western Alliance Bank, as agent (the “Agent”). The Amendment, among other things, reduces the aggregate commitment under the undrawn committed term loan facility from $ 22.5 million to $ 10.0 million, extends the maturity date from July 14, 2027 to July 10, 2030, and changes the reference interest rate on any outstanding principal amount from the prime rate published in the Wall Street Journal to the secured overnight financing rate (“SOFR”), subject to a 2.50 % per annum floor, plus an applicable margin of 3.25 % per annum. In addition, the Amendment modifies the amortization of the outstanding term loan such that only interest, and no principal, is payable until January 10, 2028. The Amendment also modifies certain financial covenants under the Loan Agreement, including revisions to the existing minimum cash and liquidity requirements, and eliminates the fixed charge coverage ratio maintenance covenant. 76 Table of Contents 8. Common Stock and Stockholders’ Equity Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock. The table below summarizes the Class A common stock and Class B common stock authorized, issued and outstanding as of December 31, 2025 and 2024: December 31, 2025 Authorized Issued and Outstanding (in thousands) Class A common stock 1,000,000 106,358 Class B common stock 120,000 20,669 Total 1,120,000 127,027 December 31, 2024 Authorized Issued and Outstanding (in thousands) Class A common stock 1,000,000 88,061 Class B common stock 120,000 28,073 Total 1,120,000 116,134 9. Stock-Based Compensation 2010 Stock Incentive Plan In 2010, the Company adopted the Second Amended and Restated 2010 Stock Plan (“2010 Plan”), and amended the 2010 Plan in 2011. The 2010 Plan provides for the grant of stock awards to employees, consultants and directors of the Company. Options granted under the 2010 Plan may either be Incentive Stock Options (“ISOs”) or Nonstatutory Stock Options (“NSOs”). ISOs may be granted to Company employees only, while stock awards other than ISOs may be granted to employees, directors and consultants. Stock awards under the 2010 Plan may be granted with terms of up to 10 years and at prices determined by the board of directors, provided, however, that (i) the exercise price of an ISO or NSO shall not be less than 100 % of the estimated fair value of the shares on the date of the grant, and (ii) the exercise price of an ISO granted to a 10% or more stockholder shall not be less than 110 % of the estimated fair value of the shares on the grant date. The options generally vest over a four-year period. For certain options, vesting accelerates upon the occurrence of specified events, such as a change of control. 2021 Stock Option and Incentive Plan In February 2021, in connection with the IPO, the Company’s board of directors adopted the 2021 Stock Option and Incentive Plan (“2021 Plan”) to replace the 2010 Plan, which was subsequently approved by the Company’s stockholders in March 2021. The 2021 Plan became effective on March 24, 2021. 77 Table of Contents Stock option activity under the 2010 Plan, as amended is as follows: Number of Options Outstanding Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in thousands) Outstanding as of December 31, 2024 13,742 $ 2.16 3.61 years $ 5,300 Granted — $ — Exercised ( 4,241 ) $ 2.17 Forfeited or expired ( 90 ) $ 2.25 Outstanding as of December 31, 2025 9,411 $ 2.16 3.30 years $ 39,825 Exercisable as of December 31, 2025 9,334 $ 2.16 3.29 years $ 39,490 The aggregated intrinsic value represents the difference between the exercise price and the fair value of common stock. The aggregate intrinsic value of all options exercised was $ 20.0 million and $ 0.4 million during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the total unrecognized compensation cost related to all nonvested stock options was not material. Employee Stock Purchase Plan In February 2021, the Company’s board of directors adopted the Employee Stock Purchase Plan (“ESPP”), which was subsequently approved by stockholders in March 2021. The ESPP became effective on March 24, 2021, and the first offering period began on March 25, 2021. Under the terms of the ESPP, rights to purchase common shares may be granted to eligible qualified employees subject to certain restrictions. The ESPP enables the Company’s eligible employees, through payroll withholding, to purchase a limited number of common shares at 85 % of the fair market value of a common share either at the beginning of that offering period or on the applicable exercise date, whichever is less. Purchases are made on a semi-annual basis. During the years ended December 31, 2025 and 2024, compensation expense related to ESPP was not material. Restricted Stock Units The Company issues service-based RSUs to employees. The RSUs automatically convert to shares of the Company’s Class A common stock on a one -for-one basis as the awards vest. RSUs were granted to newly hired employees typically vest in equal quarterly installments over three years , provided that the initial vest occurs after a one -year cliff. Such grants commence vesting as of the nearest scheduled quarterly vesting date from the date of grant. The RSUs are measured at grant date fair value, at the market price of the Company’s common stock on the grant date. The Company records stock-based compensation expense related to the RSUs ratably over the employee respective requisite service period. The following table summarizes RSU activity under the 2021 Plan: Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Outstanding and nonvested as of December 31, 2024 9,288 $ 2.26 Granted 7,263 $ 4.38 Vested ( 7,327 ) $ 2.50 Forfeited ( 294 ) $ 2.78 Outstanding and nonvested as of December 31, 2025 8,930 $ 3.78 The fair value of RSUs as of the vesting date was $ 49.7 million and $ 12.3 million during the years ended December 31, 2025 and 2024 , respectively. 78 Table of Contents As of December 31, 2025, the Company had $ 30.5 million of unrecognized stock-based compensation related to RSUs, which will be recognized over the weighted average remaining requisite service period of approximately two years . Stock-based Compensation The following table provides information about stock-based compensation expense by financial statement line item: Year Ended December 31, 2025 2024 (in thousands) Operations, product and technology $ 9,068 $ 11,382 Marketing 480 487 Sales, general and administrative 9,455 13,978 Total stock-based compensation expense $ 19,003 $ 25,847 Stock-based compensation expense capitalized in internal use software was not material for the years ended December 31, 2025 and 2024, respectively. 10. Commitments and Contingencies Noncancellable Purchase Commitments As of December 31, 2025, the Company has non-cancelable contractual commitments of $ 3.5 million for software and other services in the ordinary course of business with varying expiration terms through 2028. The future minimum payments under these arrangements were as follows: Amount (in thousands) 2026 $ 1,546 2027 1,303 2028 601 Total future minimum payments $ 3,450 Legal Contingencies The Company is subject to litigation claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for limited and customary indemnification obligations. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. 11. Retirement Plan In the United States, the Company maintains a defined-contribution savings plan pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. The plan is available to substantially all employees who meet the minimum age and length of service requirements. The Company did not make any contributions to this plan during the years ended December 31, 2025 and 2024. 12. Income Taxes The components of loss from continuing operations before provision for income taxes were $ 20.2 million and $ 40.0 million during the years ended December 31, 2025 and 2024, respectively. 79 Table of Contents The Company had no federal provision for income taxes as the Company has incurred operating losses since inception. The Company’s state provision for income taxes was current and was not material for the years ended December 31, 2025 and 2024. The Company’s effective tax rate, as a percentage of loss from continuing operations before provision for income taxes, differs from the statutory federal rate primarily due to the valuation allowance that the Company records on its deferred tax assets, as management believes it is more likely than not that the deferred tax assets will not be fully realized. The effective tax rate of the Company's provision for income taxes for the year ended December 31, 2025 differs from the federal statutory rate as follows: Year Ended December 31, 2025 (in thousands, except percentages) Tax expense at U.S. statutory rate $ ( 4,232 ) 21.0 % State and local income taxes, net of federal income tax effect 47 ( 0.2 ) % Change in valuation allowance 6,770 ( 33.6 ) % Nontaxable or nondeductible items Stock-based compensation ( 2,756 ) 13.6 % Other 64 ( 0.3 ) % Other adjustments 166 ( 0.8 ) % Total $ 59 ( 0.3 ) % The reconciliation between the provision for income taxes at the statutory rate and the provision for income taxes at the effective tax rate for the year ended December 31, 2024 is as follows: Year Ended December 31, 2024 (in thousands) Tax expense at U.S. statutory rate $ ( 8,394 ) Increase in tax resulting from: State taxes, net of federal effect 23 Non-deductible and other expenses 860 Stock-based compensation 2,540 Change in valuation allowance 5,000 Total $ 29 80 Table of Contents The significant categories of temporary differences that gave rise to deferred tax assets and liabilities were as follows: December 31, 2025 2024 (in thousands) Deferred tax assets: Accruals and reserves $ 2,896 $ 2,741 Inventory and deferred revenue 156 115 Capitalized research and development costs 11,337 14,100 Stock-based compensation 1,854 2,238 Capital losses 21,355 21,746 Intangibles 350 393 Other 1,200 1,303 Net operating loss carryforwards 97,520 87,701 Gross deferred tax assets 136,668 130,337 Less: valuation allowance ( 126,441 ) ( 120,612 ) Total deferred tax assets 10,227 9,725 Deferred tax liabilities: Fixed assets 9,911 9,723 Other 316 2 Total deferred tax liabilities 10,227 9,725 Total net deferred tax assets $ — $ — Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Net deferred tax assets consist primarily of net operating loss carryforwards of approximately $ 97.5 million and $ 87.7 million as of December 31, 2025 and 2024, respectively, related to U.S. federal and state taxes. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. As of December 31, 2025 and 2024, the Company held valuation allowances against its deferred tax assets due to the uncertainty of realizing future benefits from its net operating loss carryforwards, capital loss carryforwards, and other deferred tax assets. The valuation allowance increased by $ 5.8 million and $ 22.2 million during the years ended December 31, 2025 and 2024, respectively. U.S. federal and state net operating loss carryforwards of $ 387.7 million and $ 289.4 million, respectively, for income tax purposes are available to offset future taxable income as of December 31, 2025. $ 307.1 million of the U.S. federal net operating losses can be carried forward indefinitely and are available to offset 80% of future taxable income. If not used, these federal and state carryforwards will begin to expire in varying amounts beginning in 2027. The Tax Reform Act of 1986 and similar California legislation impose substantial restrictions on the utilization of net operating losses and tax credit carryforwards in the event that there is a change in ownership as provided by Section 382 and Section 383 of the Internal Revenue Code and similar state provisions. Such a limitation could result in the limitation and/or expiration of the net operating loss carryforwards and tax credits before utilization, which could result in increased future tax liabilities when the Company becomes taxable for federal or state purposes. While the Company has experienced an ownership change since its inception, an immaterial amount of net operating losses or tax credits has been limited as of December 31, 2025. The Company recognizes the benefits of income tax positions only if the positions are more likely than not of being sustained. As of December 31, 2025 and 2024, the amount of gross unrecognized tax benefits related to continuing operations was $ 1.5 million and $ 1.3 million, respectively. All of the unrecognized tax benefits, if recognized, would not impact the Company’s effective income tax rate. A reconciliation of gross unrecognized tax benefits from continuing operations is as follows: 81 Table of Contents Year Ended December 31, 2025 2024 (in thousands) Balance at the beginning of the period $ 1,272 $ 987 Increases related to prior year tax positions — — Increases related to current year tax positions 270 285 Balance at the end of the period $ 1,542 $ 1,272 The Company’s tax years 2010 through current will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or tax credit carryforward. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. The cash paid for income taxes, net of refunds, during the years ended December 31, 2025 and 2024 was not material. 13. Loss Per Share The following securities have been excluded from the computation of diluted loss per share for the periods presented because including them would have been anti-dilutive: December 31, 2025 2024 (in thousands) Outstanding stock options 9,411 13,743 Restricted stock units 8,930 9,288 Employee stock purchase plan 10 25 Total 18,351 23,056 14. Discontinued Operations In the third quarter of 2024, the Company announced its decision to exit the European market and that it had initiated a strategic review of its Remix business. However, the Company did not classify Remix as held for sale during this period, as the necessary criteria were not met due to the required approval not being obtained. The decision to exit the European market, coupled with the decline in the Company’s market capitalization, were identified as qualitative indicators of potential impairment of long-lived assets and goodwill. Consequently, the Company performed long-lived assets and goodwill impairment assessments during the third quarter of 2024 and recognized an impairment of long-lived assets of $ 9.8 million, recorded within loss from discontinued operations, net of tax in the consolidated statements of operations for the year ended December 31, 2024. There was no impairment recognized on goodwill as its fair value exceeded its carrying amount as of the valuation date. On November 30, 2024, the Company completed the sale of its European subsidiary, Remix, to Remix’s management (the “Transaction”). The Transaction qualified for held-for-sale classification on November 30, 2024 and represented a strategic shift with a major effect on the Company’s operations and financial results. Following the divestiture, the Company did not have any significant continuing involvement in the operations of Remix. As a result, Remix met the criteria for reporting as a discontinued operation on the same date. Upon the closing of the Transaction, the Company retained a 9 % equity interest in Remix US Holdings, Inc., the parent company of Remix, with a fair value of $ 530,000 , and received cash proceeds of EUR 1.00 . The minority investment did not provide the Company with significant influence over Remix. The Company did not elect the fair value option for this investment. The investment was accounted for under the cost method and is being assessed for impairment at each reporting period or if indicators of impairment arise. In connection with the Transaction, Remix issued an unsecured convertible promissory note (the “Convertible Note”) to the Company as consideration for the Transaction. The Convertible Note, reflecting the Company’s investment since acquiring Remix for various purposes, including infrastructure, technology, and personnel development, had a fair value of $ 350,000 . The Convertible Note had an aggregate principal amount of EUR 61.6 million and bore interest at 125 basis points plus the greater of the 12-month EURIBOR rate or zero, determined annually on November 30. The Convertible Note did not have a fixed maturity date, 82 Table of Contents and the Company did not anticipate full repayment, with both the timing and amount of any potential repayment remaining uncertain. Through its conversion feature, the Convertible Note ensured the Company’s ownership interest in Remix to remain at 9 % and not to exceed this level, regardless of potential future dilutive actions. Consequently, the discount, representing the difference between the aggregated principal amount and fair value, was not subject to amortization, and accrued interest was offset by a credit reserve adjustment and immediately written off in subsequent periods, resulting no net impact to the Company’s consolidated financial statements. The fair value of retained equity interest was estimated using a combination of a market approach, which incorporated valuation multiples of comparable public companies and transactions, and an income approach based on projected discounted cash flows (the “DCF” model). The significant assumptions used included estimates of future revenues and operating expenses, long-term growth rates, working capital requirements, discount rates, and discounts for lack of marketability and control, which were considered unobservable inputs and were classified as Level 3 within the fair value hierarchy. Estimating the fair value of a business was a subjective process that involved assumptions market participants would use in determining fair value, along with other estimates and judgments, particularly related to future cash flows, which are inherently uncertain. The Company utilized a probability-weighted approach to determine the transaction-date fair value of the Convertible Note by analyzing all possible repayment scenarios, the estimated cash flows that the Company would receive under each scenario, and the likelihood of each scenario occurring. As of December 31, 2024, the 9 % retained equity interest in Remix US Holdings, Inc., valued at $ 530,000 , and the Convertible Note, valued at $ 350,000 , were recorded in other assets within the consolidated balance sheets. As a result of the Transaction, the Company derecognized net assets of $ 7.6 million, a previously recognized foreign currency translation adjustment of $ 3.6 million, and incurred transaction costs of $ 1.0 million, resulting in a loss of $ 11.3 million, recorded in loss from discontinued operations, net of tax within the consolidated statements of operations. As a result of the Transaction and the Convertible Note, there were deferred tax assets of $ 21.7 million generated from the capital loss carryforwards incurred, related to U.S. federal and state taxes. As of December 31, 2024, the Company held a valuation allowance against these deferred tax assets due to the uncertainty of realizing future benefits from the capital loss carryforwards. Accordingly, there was no income tax impact and the Company has not recorded an income tax provision related to the losses. Remix’s financial results are presented as loss from discontinued operations, net of tax in the consolidated statements of operations for the year ended December 31, 2024. These results reflect the period from the beginning of the year through the date of the Transaction. The following table presents the major components of Remix’s financial results for the period presented: Year Ended December 31, 2024 (in thousands) Revenue $ 47,317 Cost of revenue 33,937 Operating expenses 39,077 Other income, net 44 Loss on Remix divestiture ( 11,334 ) Loss from discontinued operations, net of tax $ ( 36,987 ) During the year ended December 31, 2025, the Company received additional equity interests in Remix and remeasured its retained equity investment commensurate with an observable transaction involving new equity issued by Remix. As a result, the Company’s equity investment in Remix was $ 1.8 million as of December 31, 2025, and is included in other assets in the consolidated balance sheets. See Note 3, Financial Instruments and Fair Value Measurements , for further discussion of this investment. 83 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.