ThredUp's Q2 2025 Earnings Call: Unraveling Contradictions in Growth, Marketing Strategy, and AI Impact

New buyer acquisition and growth, marketing spend strategy, revenue growth and seasonality, AI initiatives and their impact, and marketing spend and efficiency are the key contradictions discussed in ThredUp's latest 2025Q2 earnings call.



Revenue Growth and New Buyers:
- ThredUp reported a 16.4% year-over-year revenue growth in Q2 2025, with gross margin at 79.5% and adjusted EBITDA of 3.9%.
- This growth was driven by acquiring 74% more new buyers year-over-year and 17% increase in active buyers.

AI-Driven Product Experience:
- The use of AI in features like Visual Search and Image Search led to a 30% increase in sign-up rates and 60% increase in sign-up to purchase rates.
- The integration of AI improved customer conversion rates and elevated the overall shopping experience on the platform.

Seller Growth and Premium Supply:
- ThredUp saw a significant increase in premium service kits, growing 44% quarter-over-quarter, contributing to the record requests, receipts, and cleanout kits processed.
- The increase in premium supply, which includes higher average selling prices, helped drive buyer acquisition and improve overall gross margins.

Macro Impact and Tariffs:
- The closure of the de minimis exemption and increased tariffs are anticipated to benefit ThredUp by potentially reducing production volumes and increasing prices for new apparel.
- These factors could enhance ThredUp's comparative value proposition, attracting more price-sensitive consumers to the platform.