ThredUp Inc. (NASDAQ:TDUP) Q4 2025 Earnings Call Transcript

ThredUp Inc. (NASDAQ:TDUP) Q4 2025 Earnings Call Transcript March 3, 2026

Operator: Good afternoon, ladies and gentlemen, and welcome to the TDUP Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Monday, March 2, 2026. I would now like to turn the conference over to Lauren Frasch, Head of IR. Please go ahead.

Lauren Frasch: Good afternoon, and thank you for joining us on today’s conference call to discuss ThredUp’s Fourth Quarter and 2025 financial results. With me are James Reinhart, ThredUp’s CEO and Co-Founder; and Sean Sobers, CFO. We posted our press release and supplemental financial information on our Investor Relations website at ir.thredup.com. This call is being webcast on our IR website, and a replay of this call will be available on the site shortly. Before we begin, I’d like to remind you that we will make forward-looking statements during the course of this call. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially.

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

James Reinhart: Good afternoon, everyone. I’m James Reinhart, CEO and Co-Founder of ThredUp. Thank you for joining our fourth quarter earnings call. Today, we’ll discuss our financial results for the fourth quarter, along with a review of our performance for the full fiscal year 2025. I’ll start by reviewing highlights of our first full year back as a streamlined U.S.-focused business and how this focus has allowed us to drive record gross margins and more predictable growth. I’ll then discuss our product innovation wins in 2025 and how these investments in our marketplace can translate into compounding advantages in 2026. I will also provide our perspective on the current macro environment, and how we believe our strategy uniquely positions our marketplace model to thrive as consumers continue to look for both value and delight as they allocate their discretionary spending budgets.

Finally, I’ll turn it over to Sean Sobers, our Chief Financial Officer; to walk through our financial results in detail and provide our initial guidance for Q1 and the full year 2026. We’ll conclude the call with a question-and-answer session. First to the results. We’re pleased to report that Q4 revenue grew 18.5% year-over-year, while gross margin was 79.6%, and adjusted EBITDA was 3.7% of revenue. In particular, our top line outperformance was driven by our deliberate investments in customer acquisition and new listings. This drove a noticeable surge in both new buyers and customer engagement. To that end, we’re pleased to report that new buyer acquisition increased 57% year-over-year, while active buyers for the trailing 12 months were up 30% year-over-year.

For the full year 2025, our performance was a testament to the durability and scalability of the infrastructure we’ve built over the last decade and the fundamental strength of our marketplace model. We delivered record revenue of $310.8 million, representing 20% year-over-year growth, while maintaining our premium gross margin profile at 79.4%. These results were driven by a record 1.7 million active buyers, a 30% increase over the prior year and a record 21.1 million items processed, representing volume growth of more than 17%. Importantly, this operational scale, combined with expense discipline, allowed us to generate $14 million in adjusted EBITDA or 4.4% of revenue. I’m especially proud of the underlying consistency we maintained to achieve this, delivering adjusted EBITDA every single quarter over the past 2 years, and delivering positive free cash flow for the full year in 2025.

As I look back on the past 12 months, I’d characterize 2025 as a year where we successfully returned to the core fundamentals of our marketplace and then rapidly built on top of this foundation. This was our first full year operating as a dedicated U.S.-focused enterprise without the complexities of our former European operations. It also marked the completion of our multiyear accounting transition to a fully consignment-based model with more than 90% of our business now on consignment. By removing these historical headwinds and accounting transitions, we’ve clear the path for the higher-margin scalable growth you see today. I believe this establishes the financial baseline for our business moving forward, predictable growth and exceptional gross margin profile and the operating leverage required to generate consistent free cash flow.

In addition, 2025 demonstrated the unique defensible advantages of our marketplace model. During the large tariff disruptions of 2025, we experienced little impact given our supply is wholly on consignment and U.S. sourced. We were able to launch new ways to grow supply, first with premium listings at the beginning of the year, and following up the direct listings at the end of the year. These innovations expand the types of customers we can attract to our business over time. Given our legacy of investments in infrastructure, automation and technology, we rapidly took advantage of emerging AI models to improve product search, discovery, ad buying, recommendations, photography, measurement and flaw detection. I honestly can’t remember another time when the business took such giant leaps forward on behalf of the customer.

With the surge of innovation across our business, we then executed a well-received rebrand in the fall that better positions ThredUp for years to come as a marketplace for fashion forever. Before we dive deeper into our strategy for 2026, I want to address the broader consumer landscape. I’ve said for a number of quarters that I think the American consumer may be weaker than headline data would appear to indicate and that recent data validates some of the [indiscernible]. In 2025, job growth was anemic with the DLS revising numbers down by the largest factor in 20 years. At the same time, the New York Fed confirmed that nearly 90% of the 2025 tariff burden fell directly on firms and consumers. This is on top of an affordability crisis where nondiscretionary costs like rents and insurance have structurally reset at higher levels, effectively shrinking the wallet share left over for apparel and other discretionary goods.

All this taken together, I think it’s fair to say that the macroeconomic environment for discretionary spending remains uncertain, and the American consumers understandably approaching the year with a degree of caution. However, we believe these circumstances allow us to offer a differentiated approach. While traditional apparel retailers may face headwinds in a value-driven environment, our managed marketplace is uniquely built to capture upside demand as consumers prioritize both the stretch of their dollar and the liquidity in their closets. As we enter 2026, our focus of ThredUp is to build on our path towards sustained profitable growth by enhancing the structural drivers of our marketplace flywheel; full-funnel buyer growth, high-quality supply and AI-driven innovation that meaningfully reduces friction in shopping secondhand, all while maintaining our expense discipline.

This strategy is threefold. First, we are focused on this full-funnel growth in early life cycle engagement. Our success in 2025 was fueled by record-breaking customer acquisition capped off by a 57% year-over-year surge in new customers during Q4. This momentum proves that our brand and value proposition are resonating at increased scale. As we move into 2026, our priority is evolving from pure acquisition to deepening our relationship with these new cohorts. Our LTV to CAC ratio reached all-time highs in 2025, but we think there is more to do to build multiyear LTV expansion. We recognize that early life cycle engagement is our highest leverage growth driver. By prioritizing retention alongside acquisition, we’re building a more predictive, high LTV buyer base that fuels our long-term growth engine.

Second, in 2025, we proved that we could scale supply volume meaningfully with kit requests up 36% year-over-year. This wasn’t just about quantity. It was about obtaining the right supply, driven by a few key initiatives. A primary driver of this increase can be attributed to our premium kit offering. We launched this product in early 2025 and has scaled into a material contributor to our supply, representing 17% of supply for the year. We will continue to invest in expanding our premium kit offering through new channels as well as evolving the sets of incentives we offer customers. Specifically, we developed a supply approach for capitalizing on the momentum of TikTok shop. While selling unique secondhand SKUs on TikTok shop is challenging, our cleanup kits, premium, regular or otherwise, can be skewed and sold effectively.

In January, we sold over 100,000 cleanout bags through TikTok shop with 97% of these orders being brand-new suppliers on our platform. In light of this early success, we are now actively experimenting with TikTok Live and created affiliates to capitalize and convert these new sellers into long-term customers. Our Resell-as-a-Service footprint has expanded to include a handful of beloved brands since our last call, including Lands’ End, Steve Madden and Betsy Johnson. We continue to see RaaS as a broad ever extendable platform for adding high-quality supply channels. We are now several months into our direct listing data. I mentioned on our last call that we would be very deliberate in how we rolled out this initiative to meet a market need.

Thus, we are focused on growing the business by approximately 10% per week as we observe and learned. There are now thousands of buyers and sellers involved in our beta, providing rich data to test and learn from. Some of the early data has confirmed our hypotheses, while other behaviors have surprised us. Sellers who choose to take advantage of direct listings are listing 10x more items than we expected. This suggests there is enormous closet share left for us to take as we provide more ways for our customers to monetize the full depth of their wardrobes. Sell-through has been as expected. While the average selling price is much, much higher, more than $70, we believe that scaling these higher ASP listings will allow us to further capture a more premium shopper consistent with the launch of our premium kits last year.

Customers have also reacted very positively to the seamless nature of using our infrastructure to handle returns, giving them confidence to shop direct listings when they might not have previously done so. We are continuing to roll out new updates to the experience weekly. Most recently, we enabled the bulk import of listings. This way, customers can move their closets over more easily from competitor sites. Already 50% of new listings are now coming from bulk import, which we think is one indicator that we’re building the right tools for sellers to consolidate their selling on ThredUp. We launched direct messaging that sellers can communicate and just this week, an offer function, so buyers and sellers can more easily find the market clearing price without ThredUp’s direct involvement.

Finally, we are leveraging AI to build a structural advantage across our entire business. Our goal is to use technology to remove the friction inherent in resale, both for our customers but also for our bottom line. Following the launch of our AI-powered shopping suite last year, we doubled down with features like the daily edit in the trend report. These tools use proprietary embeddings to move us toward a segment of one where the marketplace feels custom-built for every individual. Looking ahead, we are going to use Agentic AI to transform the ThredUp experience into a much more personalized end-to-end discovery and shopping journey. We are also redefining the post-purchase experience with Dottie, our AI customer service agent. In a relatively short amount of time, Dottie has evolved from a simple question-and-answer tool into an agentic engine capable of facilitating the resolution of customer issues that previously required representatives.

By reducing the human escalation rate of customer service inquiries, Dottie allows our team to focus on higher-value interactions and more nuanced customer requests. More importantly, this shift to instant resolution has driven a meaningful increase in our customer satisfaction scores directly supporting our overall customer growth goals. By embedding AI into everything from discovery to service, we are building a marketplace that is not only more enjoyable for the consumer, but structurally more profitable to operate. In closing, as we look ahead, we believe ThredUp is transitioning from a period of recovery to one of compounding progress. The data-driven infrastructure we’ve built, supported by our commitment to operational excellence and our foundational AI architecture is transforming our marketplace into a more efficient, scalable and personalized ecosystem than ever before.

We’ve often said that marketplaces are hard to build. But when you get the flywheel spinning, they are very hard to stop. By continuing to redefine the buyer experience with emerging AI tools, while expanding our addressable market through supply innovation, we’re demonstrating that our model could scale more widely and effectively over time. I’m confident in our team’s execution as we work toward our goal of making secondhand, the preferred choice for consumers everywhere and building a generation-defining company that endures. With that, I’ll turn it over to Sean to talk through the financials in more detail.

Sean Sobers: Thanks, James. I’ll begin with an overview of our results and follow up with guidance for the first quarter and full year of 2026. I will discuss non-GAAP results throughout my remarks. Our GAAP financials and a reconciliation between our GAAP and non-GAAP measures are found in our earnings release, supplemental financials and our 10-K filing. We are extremely proud of our Q4 and 2025 results in which we exceeded our internal expectations for revenue, gross margins and adjusted EBITDA. For the year, we delivered 20% revenue growth, adjusted EBITDA profitability and our first year of positive total cash flow and set company records for revenue, new buyer acquisition and total active buyers. For the fourth quarter of 2025, revenue totaled $79.7 million, an increase of 18.5% year-over-year.

Our performance was driven by investments into new buyer acquisition, continued LTV to CAC efficiencies and inbound processing that drove our marketplace flywheel. These drivers resulted in another strong quarter for new buyer acquisition with new buyers up 57% year-over-year. We also benefited from repeat purchases by new buyers acquired earlier in the year as well as reduced churn. We finished the quarter with a record 1.7 million active buyers for the trailing 12 months, up 29.5% over last year, while we had 1.6 million orders in the fourth quarter, up 27.3%. For the fourth quarter of 2025, gross margin was 79.6%, an 80 basis point decrease versus the same quarter last year. Our outperformance versus our expectations was driven by higher average selling prices due to the growth in our premium supply offering.

Adjusted EBITDA was $2.9 million or 3.7% revenue for the fourth quarter of 2025, outperforming our internal expectations. Our Q4 results represented a 370 basis point decline over last year when our revenue outperformance occurred later in the quarter, and we were unable to accelerate our spend efficiently to keep pace with our top line performance. This year, as we gained confidence in our ability to drive future growth, we were pleased to be able to appropriately invest to better set us up for 2026. Turning to the balance sheet. We began the year with $52.8 million in cash and securities and ended the year with $53.1 million. We are proud to have reached a major milestone for the company in 2025, generating our first year of annual free cash flow, having invested $10.5 million on CapEx in 2025.

We continue to expect similar levels of CapEx in 2026 with expanding free cash flow. Now I’d like to provide a bit of context for our guidance. Our 2025 strategy represented a return to our marketplace fundamentals disciplined investment in active buyer growth, supply processing and product innovation while maintaining rigorous expense control and leveraging our legacy investments. This approach generated success beyond our expectations. In 2026, our plan is to extend our commitment to this core strategy, prioritizing scalable, sustainable growth and methodical EBITDA expansion. As discussed earlier, the leverage to our marketplace flywheel are marketing dollars to drive buyer growth, inbound processing of high-quality supply to fuel revenue and customer experience investments to improve conversions.

As our volume scales, margin profile benefits from strong flow-through inherent in our marketplace model, but simply the more we grow, the more EBITDA dollars we generate. Similar to our approach in 2025, we plan to flow through any incremental dollars above our guide back into these growth-driving opportunities. With all that said, as James discussed earlier, we remain cautious on the current consumer environment and are taking a measured approach to our outlook. In addition, it is important to consider our typical seasonality. We expect the year to follow a similar quarterly cadence of 2025. To be explicit, we expect Q1 to be the smallest quarter in terms of both revenue and EBITDA dollars. This is because we normally experienced some hangover from the Q4 holiday while at the same time we ramp supply processing and marketing to accelerate revenue growth from Q1 onwards.

That growth acceleration then drives EBITDA expansion through the year. We expect revenue dollars to be the largest in Q2 and Q3, followed by a seasonal step down in Q4. With all this in mind, in the first quarter, we expect revenue in the range of $79.5 million to $80.5 million, representing 12% year-over-year growth at the midpoint, gross margin in the range of 78% to 79% and adjusted EBITDA of approximately 3% of revenue and basic weighted average shares outstanding of approximately 128 million shares. For the full year of 2026, we expect revenue in the range of $349 million to $355 million reflecting 13% year-over-year growth at the midpoint, gross margin in the range of 78% to 79%, adjusted EBITDA of approximately 6% of revenue, representing over 150 basis points of expansion versus last year and basic weighted average shares outstanding of approximately 130 million shares.

In closing, we are extremely proud of the milestones we achieved in 2025. This year, we are more confident than ever in the fundamentals of our marketplace flywheel, our operational consistency and our strategy as we pursue predictable growth, expanding profits and accelerating cash flow. James and I are now ready for your questions. Operator, please open the line.

Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Irwin Boruchow from Wells Fargo.

Irwin Boruchow: Congrats on the good end of the year. I guess maybe for James or Sean, not sure, but just talk about the guide. You’ve got a lot of momentum coming out of the year, guide in the low double-digit range for Q1. Anything you’re seeing in the business or anything notable to call out? Or is this just you guys taking a conservative approach to start? And then maybe, Sean, can you help us more with the revenue and EBITDA expansion pacing through the year? Anything we should kind of keep in mind for the models?

James Reinhart: I’ll start. No, I don’t think that we’re seeing anything materially different in the business. I think there’s just enough uncertainty out there in the world that we continue to invest in Q1, and we want to print the quarters, not guide the quarters. And so I just — I think we’re being appropriately thoughtful around what the next year could look like given the puts and takes. I think if you go back to where we were a year ago, we ran a very similar playbook investing in Q1 and watching those returns come in Q2, Q3 and Q4. And I think if we could have a repeat of last year — this year, I think that would be a great result. And so we feel good about the momentum in the business coming out of Q4. And I’ll turn it over to Sean to talk a little bit about the cadence and the sequencing in the quarter because I think that’s more helping folks understand what ThredUp looks like in a more normalized operating environment. So I’ll let Sean handle that.

Sean Sobers: Yes, I’ll go through a little more detail there. So we expect Q1 to be our smallest quarter in both revenue and EBITDA dollars as well as EBITDA margin. Then we’d expect Q2 revenue growth rate to reaccelerate to the highest of the year and then kind of step back a little bit moderating for Q3 and Q4. And then on the EBITDA side, we would expect sequential EBITDA expansion into Q2 and then second half EBITDA overall will be greater than first half EBITDA.

James Reinhart: And I think that’s the pattern that you’re going to see, Ike, for the business, not just this year, but I would expect in ’27 and ’28. That’s, I think, the stand-alone U.S. business is that sequencing.

Irwin Boruchow: Sorry, just a follow-up, Sean. When you say 2H greater than 1H on the EBITDA, are you talking just dollars or rate expansion year-over-year…

Sean Sobers: Rate. Dollars as well. Rate and dollars.

Operator: Your next question comes from the line of Matt Koranda from ROTH Capital.

Matt Koranda: I guess I just wanted to hear a little bit more about the line items you expect to leverage in ’26, just given the EBITDA margin expansion guidance crossed up with, I guess, the gross margin slight decline year-over-year. Are we getting more leverage on the operations line, OP&T. It sounded like you’re willing to invest in marketing anything over and above the target range of 6% for the year. Just wanted to hear you confirm that as well.

Sean Sobers: Matt, this is Sean. Yes. I think marketing will be a similar percentage of revenue for the year, meaning we’re going to leverage SG&A and OP&T to gain that 150 bps on the EBITDA line. But I think on the gross margin side, to touch on that a little bit is like way back when, when we did the IPO, we said our kind of our long-term target 75% to 78%. We’ve been outpacing that for the last couple of years and feel pretty good about the range of 78% to 79%. And the reason that gives it a little lower than some of the stuff we’ve done recently is give us a little bit of leverage to improve customer satisfaction or do things that we haven’t done historically and James pointed out on the call, like on the TikTok shop. That’s something that we can do that’s a little of a bit of a headwind to GM, but it’s really good for the overall business.

Matt Koranda: Okay. That makes sense. And then maybe just speak to the level of confidence that you have in the acceleration in top line in the second quarter. I guess, is there something in recent customer acquisition in terms of the new customers you’ve acquired that gives you better visibility to see that acceleration in the second quarter. Just wondering where that comes from, just given the commentary around some of the softness that you see in the macro as well.

James Reinhart: Matt, it’s James. Yes. I mean I think, again, I just want to emphasize how much sort of the sequencing and pace of the business. I think we’re operating in this new normal. And I think that you should always see this sequential increase from Q1 to Q2. But that’s really driven by just how the business attracts customers and delights customers over time. We always have this small hangover effect in Q1 as people digest their holiday spending. So they digest their holiday spending, then they make new resolutions, shopping more sustainable, being more thoughtful, cleaning out their closets. All that kind of New Year’s resolution stuff, that then creates opportunities for us to capture some of their attention and mind share and then that produces some momentum into Q2.

Matt, if you go back and look at 2025, the same thing, right? If you see Q1 growth rates in ’25 going from Q1 to Q2, it’s the same pattern you’re seeing in ’26. In fact, if you [indiscernible] Q1 this year over Q1 last year, it’s actually accelerating growth. We grew 10% in Q1 of last year, and we’re guiding to 12%. So anyway, I think that’s just the normal cadence of the business.

Operator: Your next question is from the line of Dylan Carden from William Blair.

Dylan Carden: I kind of have a related question. So if you think about the 50-plus percent new buyer growth, the strong active customer growth that you printed, can you kind of remind us the lag effect or speak to any churn as far as sort of the guiding the go-forward revenue growth where you’ve put it?

James Reinhart: Yes, Dylan, I mean — it’s James. I mean, we always have churn in the business, but I think it’s more, again, helping investors and others understand the patterns in the business because last year, Dylan, was the first sort of — I would characterize that as a clean year for us being U.S. only. And you typically see acceleration Q1 to Q2 to Q3 and then the seasonal step back in Q4 that was exactly the pattern in ’25. And even prior to going public, that was a very common pattern for the business. So I think we’re just getting back to that normal cadence. And so it’s less about new buyer growth or churn, it’s more of as customers come back in the market, how the business performs. So hopefully, that helps set some context.

Dylan Carden: Yes. And then any commentary on sort of customer acquisition costs. I know that sort of tends to be or has emerged as a hot button topic for you guys, efficiencies, players in the market.

James Reinhart: Yes. I mean customer acquisition, we have customer acquisition costs going up a little bit this year just as we continue to invest in marketing and scale spend. But we’re still expecting to acquire at least as many customers this year as we acquired last year, especially with spend incrementally up. So I expect another very strong year on the customer acquisition side for new buyers. Obviously, we’re lapping, Dylan, very different set of comps around total new buyers. But I expect strong momentum. And then I think the real secondary emphasis is expanding those 3- and 5-year LTVs. And I think a lot of the product work that we’re doing in ’26 is really focused there, which is a little bit different than in ’25, which was much more focused on reaccelerating kind of first in new buyer growth. But I think that will create some of the momentum as we move throughout the year.

Operator: Your next question comes from the line of Dana Telsey from Telsey Group.

Dana Telsey: As you talk about the product and the premium assortment that you’ve been having lately, what did you see in ASPs? Did the premium portion of the business differentiate from the earlier quarters in the year? Anything that you’re seeing there? And also how you think about the health of your customers?

James Reinhart: Dana, it’s James. Yes, I think we’re very pleased with the trajectory of premium in the business. It’s a product for sellers that we launched over a year ago at this point, but it grew to be high teens, 17%, 18% of the business by Q4. I think you even saw more of it from a mix perspective, ASP start to flow up because of holiday handbags, more expensive dresses, shoes, those types of things. And I think it really speaks to us continuing to move, I think, where the sweet spot is for customers and making sure that we don’t have too much exposure to the lowest income demographic, which I think can be challenged in this economy. And so I think to answer the second part of your question, I think we have been on this multiyear journey to stepping up the mix of goods, the ASPs, the price points.

And I think 2025 was a big step forward. I think ’26 will continue some of that. And then the last piece on this is, we launched the direct listings piece at the end of the year in ’25. And as I mentioned in the prepared remarks, I’ve been quite surprised by the price points in the direct selling business being more than double what we were seeing in the core. And I think, again, that will allow us to touch a slightly more affluent customer and I think drive appropriate margins. So I think we feel very good about where the assortment is headed and the types of customers that we can attract and delight.

Dana Telsey: And James, any color on category performance, what you saw?

James Reinhart: Dana, no. I hate to be a broken record. It’s more of the same. We’re still selling tons of dresses. I do think though that Q4, again, we had another very successful year with our holiday shop, the business growing 18% year-over-year on top of Q4 last year was actually like the first quarter reacceleration. So what I would say is that the customer is starting to — or secondhand is starting to resonate more with customers around the holidays. And I think that’s a place we want to continue to push in the years ahead.

Operator: Your next question comes from the line of Bobby Brooks from Northland Capital Markets.

Robert Brooks: James, I think you mentioned in a couple of questions ago that 2026, there’s a lot on the slate for product enhancements focused on expanding the 3- and 5-year LTVs of customers, and that’s exciting news just thinking about how successful you guys integrated AI into the search piece, so just was curious if we could here get a little bit more granular detail on those plans of trying to drive the long-term LTVs higher.

James Reinhart: Yes. Bobby, Yes. I mean I don’t want to get too far ahead of ourselves. I think you’ll definitely hear us put some things in market over the next couple of quarters. But what I would sort of say at a high level is we’re really emphasizing customers choosing to go to ThredUp first for all of their needs. I think historically, people would — ThredUp would be one of, say, a handful of places in their consideration set around where they might shop. They might shop discount retail, they might shop off-price. I think what we’re really trying to do is emphasize that we can really serve all of your closet needs by building this robust personalization experience. And that started with the Daily Edit, which we talked about last quarter.

But I will tell you that the Daily Edit momentum is growing, you’re seeing customers come back every day and sort of checking what’s new, and that’s allowing us to refine the mix of goods that we can put in front of you. And so I think the focus really is how do we move you from — the average customer might buy 12 items a year, right? But we know that, that is still only 25% of her closet. I think what we’re really trying to attack, Bobby, is the other 75%. And so a lot of the investments are to make sure that ThredUp is top of mind for all of our needs. And so I’m very excited about what I’m seeing from the team around these types of investments. And I do think if we get this right, you can see real expansion in LTV. And I think if you do that, you can really then change the acquisition mix over time.

Robert Brooks: Absolutely. Looking forward to hearing more on that. Then it was great to hear the — I think you called out you sold 100,000 cleanout bags through the TikTok shop, which was really impressive. And maybe even more impressive was the 97% were folks new to the — new to ThredUp. Just curious like how are those — how was it being — how did those folks get to the TikTok shop to buy the cleanup bag? Was there specific like advertising campaigns? I was just kind of curious to hear that. And when I think of the 100,000 bags, like were those — were the majority of those all already sent in and now going to the supply chain? Just curious to hear more there.

James Reinhart: Sure. I mean, it was — it started as a campaign with some influencers, some affiliates. But the thing about TikTok is it can take on a life of its own. And so we truly went viral there for a little bit with influencers and affiliates talking about the cleanout kit value. And so that was great. We — it was a ton of new sellers. We’re now in the process of processing those bags to really understand the mix of goods, right, because, obviously, it’s not just quantity, we want high-quality product coming through. And we’ve been tweaking exactly how we’re trying to work with influencers and affiliates to get the right stuff. But I think it’s super exciting because it really shows how the brand that we’ve built, specifically the rebrand and the service offering can resonate at that type of viral scale.

And so I think it’s more now of us getting it all the way dialed in, Bobby, but I think it’s really — it could be a real unlock for our supply goals over the next — not just over the next year, but over the next several years if we can really get this right. And then we also want to learn for how we can translate it into some of the work we can do on buyer development, some of the work we can do on direct selling. So it’s an exciting opportunity, and I’m thrilled it was really driven by just a handful of great products and engineers and marketing folks coming in to drive that.

Robert Brooks: Got it. And then one more for me is on the bulk import with the peer-to-peer selling. That was really interesting. And I just wanted to hear more. Is it as simple as them turning over their seller page from a different platform and then it’s just like a click of a button and everything gets integrated into the ThredUp platform. I was just curious to kind of hear that cycle a little bit more.

James Reinhart: Yes. I think the engineers would berate me if I said it was just that easy. But yes, the idea is that the customers can, with just a handful of clicks, kind of export and import their listings. And we always believe this would be a really important tool to reduce switching costs, right? With any marketplace where seller reputation matters, switching costs are a really important thing. But I think our thesis on direct selling was that the barriers out there in peer-to-peer and the switching costs are getting lower and lower with the improvement in AI technology. And so I think the combination of technology improvements independent of ThredUp as well as our strategy to make it as easy as possible for you to list and kind of the convergence of those 2 has been successful.

And — so you’re really seeing established sellers on these other platforms say, oh, well, I’ll give ThredUp a try because it’s so easy. And so I think that’s an exciting development. And we’re going to keep doing things like that to make ThredUp really the easiest way to consolidate all of your selling.

Operator: Your last question comes from the line of Oliver Chen from TD Cowen.

Julia Shelanski: This is Julia Shelanski on for Oliver Chen. I was curious if you could provide a snapshot of the percentage of fixed versus variable costs within OPT and SG&A today and how you expect that mix to evolve as you gain operating leverage? And second, I’m curious how rising ASP influences your payback mass across cohorts and particularly within newer customer acquisition channels such as TikTok.

James Reinhart: Yes. I think I’ll take the second one and then I can let Sean provide a little bit of color on the mix. I think as you have ASPs go up on premium listings, you do have more potential contribution margin that flows through as those items sell and therefore, that contribution margin can flow into the LTV math that would allow you to pay higher tax. But I think that’s generally how our — the engine has worked over the past few years. And so I do think premium helps us acquire some more customers. And I think our strategy is to provide more premium product in ’26 relative to ’25. So I think that engine can kind of work together, but we also recognize that the ad markets are dynamic. And so we got to be thoughtful around making sure that we’re honest with the LTV to CAC payback math. But as for the other stuff, OPT and SG&A, I’ll let Sean kind of comment.

Sean Sobers: The SG&A is pretty easy because it’s mostly almost like 97%, what you would kind of consider fixed. The only piece that goes through SG&A is like the payment processor fees which are like 3%. And on OP&T, it’s more like 60-40 fixed variable. The other way around variable fixed — sorry, 40-60.

Operator: There are no further questions at this time. I would now like to turn the call back to James Reinhart for closing comments. Sir, please go ahead.

James Reinhart: Well, thank you all for joining our 2025 full year results call. Looking forward to a great year. I want to thank all the ThredUp teammates for all their hard work in ’25, and I’m excited about the opportunities in the business in ’26. And look forward to talking to all of you in just a couple of short months. So thanks.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you very much for your participation. You may now disconnect.