ThredUp Sees 25% Revenue Growth Target for Q3 2025 Amid AI-Driven Gains and Accelerating Buyer Acquisition.

ThredUp Inc. reported Q2 2025 revenue growth of 16.4% YoY, exceeding internal expectations. CEO James G. Reinhart stated that revenue growth accelerated and gross margin landed at 79.5%. The company aims to achieve a 25% revenue growth target for Q3 2025, driven by accelerating buyer acquisition and AI-driven gains.

ThredUp Inc. (TDUP) reported robust financial performance for the second quarter of 2025, with revenue growth accelerating to 16.4% year-over-year (YoY), surpassing internal expectations. The company's gross margin reached 79.5%, reflecting strong operational efficiency. CEO James G. Reinhart highlighted the significant growth in new buyer acquisition, with a 74% increase YoY, and active buyers up 17% YoY. The company's AI-led product journey continues to yield positive results, with a 30% YoY increase in sign-up rates and a 60% increase in the sign-up-to-purchase rate, leading to an 18% improvement in visitor-to-customer conversion.

ThredUp's Q2 2025 revenue totaled $77.7 million, up 16.4% YoY. Gross profit increased by 17% YoY to $61.7 million, while gross margin remained at 79.5%. The company ended the quarter with $56.2 million in cash and cash equivalents, restricted cash, and marketable securities, up $0.8 million from the previous quarter. Adjusted EBITDA from continuing operations was $3.0 million, or 3.9% of revenue, compared to $1.5 million, or 2.2% of revenue, in the second quarter of 2024.

For the third quarter of 2025, ThredUp expects revenue in the range of $76 million to $78 million, representing 25% YoY growth at the midpoint. Gross margin is expected to be in the range of 77% to 79%, with adjusted EBITDA of approximately 4.5% of revenue. The full-year 2025 revenue is now expected to be in the range of $298 million to $302 million, reflecting 15% YoY growth at the midpoint. The company attributes this performance to its AI-driven product enhancements and a growing premium supply mix.

Reinhart noted that the company is maintaining its focus on gross margin and bottom-line efficiency while reinvesting incremental dollars into growing new buyers and sellers in its marketplace. He emphasized the importance of the company's AI-led product journey, stating that customer satisfaction with AI-generated images has been on par with its best features. The company is also expanding its Resale as a Service (RaaS) strategy, with renewed conversations with more than 60 apparel brands.

Despite the positive outlook, ThredUp remains cautious about potential seasonal slowdowns and macroeconomic uncertainties. Reinhart noted that the company is being prudent in its Q4 outlook, while Sobers mentioned the challenge of hiring fast enough to meet processing needs as momentum accelerated through May.

In conclusion, ThredUp Inc. delivered strong Q2 results with accelerated revenue growth and record new buyer acquisition. The company's focus on AI-driven enhancements and premium supply mix has positioned it well for continued growth in the resale market. With a 25% YoY revenue growth target for Q3 2025, ThredUp remains committed to executing its growth playbook while maintaining a cautious approach to seasonal and macroeconomic uncertainties.

References:
[1] https://seekingalpha.com/news/4478053-thredup-outlines-25-percent-revenue-growth-target-for-q3-2025-amid-accelerating-buyer
[2] https://ir.thredup.com/news-releases/news-release-details/thredup-announces-second-quarter-2025-results