Thredup, Inc. ((TDUP)) has held its Q3 earnings call. Read on for the main highlights of the call.
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ThredUp’s Q3 2025 Earnings Call: Strong Growth Amid Economic Concerns
ThredUp’s Q3 2025 earnings call painted a picture of robust growth and innovation, tempered by caution regarding future economic conditions. The company reported impressive revenue growth and new customer acquisition, driven by innovative AI applications. However, concerns about macroeconomic factors potentially impacting consumer spending during the holiday season and challenges in the peer-to-peer market were also highlighted.
Record New Customer Acquisition
ThredUp achieved a record-breaking milestone in Q3 2025 by acquiring more new customers than ever before. New buyer acquisition surged by 54% year-over-year, and active buyers increased by 26% year-over-year. This growth underscores ThredUp’s successful strategies in attracting and retaining customers.
Strong Revenue Growth
The company reported a remarkable 34% year-over-year revenue growth, marking the strongest increase in nearly four years. This quarter also represented the fourth consecutive period of accelerating growth, showcasing ThredUp’s ability to expand its market presence effectively.
High Gross Margin and EBITDA
ThredUp’s financial performance exceeded expectations with a gross margin of 79.4% and an adjusted EBITDA of 4.6%. These figures reflect the company’s efficient operations and strong financial health.
Successful AI-Driven Product Innovations
The launch of AI-driven features such as the Daily Edit and the Trend Report has significantly enhanced personalization and trend responsiveness for ThredUp’s customers. These innovations are a testament to the company’s commitment to leveraging technology for improved customer experience.
Expansion of Resale-as-a-Service (RaaS)
ThredUp expanded its RaaS programs by partnering with brands like New York & Co. and Cotopaxi. This strategic move is expected to attract more brands in the coming months, further solidifying ThredUp’s position in the resale market.
Cautious Outlook for Holiday Season
Despite the positive growth metrics, ThredUp expressed caution regarding the upcoming holiday season. Macroeconomic challenges could impact consumer spending, potentially shifting wallet share towards new gifts, which may affect ThredUp’s sales.
Competitive Pressure in the Peer-to-Peer Market
Challenges in the peer-to-peer market were noted, with issues such as listing quality, seller reputation, and buyer trust being highlighted. These factors could pose risks to ThredUp’s competitive edge in this segment.
Forward-Looking Guidance
Looking ahead, ThredUp provided guidance for Q4 and the full year 2025. The company expects Q4 revenue to be between $76 million and $78 million, representing a 14% year-over-year growth at the midpoint. For the full year 2025, revenue is projected to range from $307 million to $309 million, reflecting an 18% growth. In 2026, ThredUp anticipates revenue growth in the low double digits, slightly outpacing the U.S. online resale industry, along with a modest expansion in EBITDA margins.
In summary, ThredUp’s Q3 2025 earnings call highlighted a period of significant growth and strategic innovation, driven by strong customer acquisition and AI advancements. While the company remains optimistic about its future prospects, it is also mindful of potential economic headwinds that could impact its performance in the coming months.