Good afternoon, everyone, and thank you for joining us on today's conference call to discuss ThredUp's Q3 2022 financial results. With us are James Reinhart, ThredUp's CEO and 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 also being webcast on our IR website, and a replay of this call will be available shortly. Before we begin, I'd like to remind you that we will make forward-looking statements during the course of the call, including but not limited to, statements regarding our earnings guidance for the fourth fiscal quarter and full year of 2022, future financial performance, market demand, growth prospects, business strategies and plans, our ability to attract new buyers, and the effects of inflation, increased interest rates, changing consumer habits, and general global economic uncertainty. These forward-looking statements are not guarantees of future performance, involve known and unknown risks and uncertainties, and our actual results could differ materially from any projections of future performance or the results implied by such forward-looking statements. Words such as anticipate, believe, estimate, and expect, as well as similar expressions, are intended to identify forward-looking statements. You can find more information about these risks, uncertainties, and other factors that could affect our operating results in our SEC filings, earnings press release, and supplemental information on our IR website. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition, during the call, we will present certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or an isolation from GAAP measures. You can find additional disclosures regarding these non-GAAP measures, including reconciliations and comparable GAAP measures in our earnings press release and supplemental information posted on our IR website. Now, I'd like to turn the call over to James Reinhart. James. Thanks, Lauren. Good afternoon, everyone. I'm James Reinhart, CEO and co-founder of ThredUp. Thank you for joining ThredUp's Q3 2022 earnings call. As we head into the final months of 2022, we are here to share ThredUp's financial results and key business highlights from our Q3. In addition to our financial results, we will offer our perspective on the consumer environment, how resale is faring, and our path to sustainable profits and long-term growth. I'll then hand it over to Sean, our Chief Financial Officer, to talk through our Q3 of 2022 financials in more detail and provide our outlook for the Q4 and fiscal year 2022. We'll close out today's call with a question and answer session. Let me start with our Q3 results. We achieved another quarter of strong financial performance, beating both the top and bottom lines of our guidance. Despite a challenging macro environment and lapping strong wins last year, we saw continued growth in revenue, active buyers, and orders compared to the same quarter last year. Our revenue of $67.9 million is an increase of 7% year-over-year, demonstrating our ability to achieve growth even through a promotional retail environment. Q3 active buyers and orders increased 18% and 24% year-over-year, respectively. Our gross profit and gross margin both declined last quarter, shrinking by 3% and 750 basis points, respectively. The decline in our gross margins is primarily due to the outsized growth of Remix and RaaS, as both become a larger part of our overall business. As a reminder, we recognize the majority of our RaaS and European supply as owned inventory, which negatively affects our gross margin profile. Finally, our adjusted EBITDA loss of $11 million is primarily due to planned investments across our operating infrastructure and technology stack. Now, let's turn to the road ahead. I'd like to acknowledge that we're still navigating through a challenging consumer environment. As we shared in our last earnings call, it's been difficult to predict exactly how the consumer was going to behave in the back half of the year, with persistent inflation continuing to pinch the budget consumer, a meaningful portion of our consumer base. As we said last quarter, we observed initial deterioration in consumer health towards the end of Q2, and this continued into Q3. In Q4, we're seeing the added impact of a highly promotional environment as retailers are moving through elevated inventory levels and the wholesale channel is flooded with excess product. While we were expecting a competitive landscape, Q4 is proving to be an even bigger challenge than we had anticipated. The ThredUp brand stands for value, and that message is being washed out in this hyper-promotional landscape. We're confident that this competitive dynamic is temporary. We believe it will subside as retail inventory positions improve, but we expect revenue to be challenged in the near term. Given that backdrop, I want to take a moment to address a question I frequently get asked around how resale should fare in a recession. James, shouldn't it do well at a time like this? Well, the answer is yes. We believe resale should do quite well in a typical recessionary environment as consumers look to find value. It's not that simple this time around. That's because over the past 12 months, there's been a massive buildup of apparel inventories. What we're seeing is a combination of demand pullback at a time when retail inventories are overflowing with apparel. This is resulting in significant price compression in the apparel market. While we don't have the same inventory risks that other retailers have, we're not immune to the pressure on prices. I think it's really important to step back for a moment and ask, how might this play out in the future? A few things to keep in mind. One, what's getting overlooked in this environment is that consumers are becoming accustomed to buying apparel at extremely low prices. When retailers sell through their excess inventory, prices normalize, we believe there's a significant opportunity for resale to take share. For a customer that's been conditioned to expect 60%–80% off retail for their clothes, if you're still feeling the effects of inflation, resale is going to be a go-to for value. Two, when that consumer health starts to slowly inflect, as we believe it does following every economic downturn, we're confident that ThredUp's value proposition will enable us to cap meaningful wallet share from shoppers across the economic spectrum, as we have done many years in the past. Sometimes in the noisiness that is the financial markets, it's easy to lose the plot, and so I wanted to reiterate five things for those thinking a bit longer term. One, we have 1.7 million active buyers, and on average, each of those active buyers are spending nearly $170 each year. Before the pullback just a couple years ago, our business witnessed 5 quarters of accelerating growth, with Q4 last year growing 68% year-over-year. This is a business that knows how to grow. Two, we have a structural supply advantage where we have never had to spend direct marketing dollars for suppliers, ever. Three, we have spent many years building infrastructure, expertise, proprietary data, and a winning brand that is increasingly hard to replicate. Four, we are competing in a total addressable market in the U.S. and Europe for secondhand apparel that is expected to top $150 billion by 2026. Now, you can try the total size and you can trifle with the timing, but virtually all new market innovations are undersized in the beginning until they are not. The growth in this market is powered by young people who are just now starting to flex their purchasing power. 5, our business is founder-led on a management team whose average tenure is more than 8 years. We have navigated through much more challenging environments than this and relentlessly driven by our mission for profits and purpose. Now that I've gotten that out of the way, let me focus on two areas, driving profits and investing in the future. As we shared during our last earnings call, our priority remains reaching adjusted EBITDA breakeven back half of 2023 and making prudent investments to create long-term shareholder value in 2023 and beyond. We are operating in an environment where we need to play both offense and defense skillfully. To put it plainly, we are playing to win, not just to survive. Let me first emphasize that we have many tools in our toolbox to manage expenses and drive the business to adjusted EBITDA breakeven. First, our processing cadence, inventory sourcing, and so on. As mentioned earlier, we are restricting the number of cleanout bags we're sending to suppliers to flex supply, as well as evolving the mix of goods we put online to meet a more sober demand environment. However, we're keeping up our RaaS partner cleanout program, and as a reminder, we charge brands a fee for each RaaS bag that we process through our cleanout program. Our RaaS business has continued to accelerate, with Q3 being our best quarter yet in terms of the high margin fees that we generate. Second, we are leaning into the advantages of our marketplace model. As a marketplace, we believe we have structural advantages and built-in resiliency compared to traditional retailers. Unlike traditional peers, we have a flexible, responsive supply chain and a variety of levers we can pull around prices, payouts, recommendations, and mix position the business to navigate a dynamic environment. Third, we are shaping our distribution network in the U.S. to best support our growth. We have pushed out the opening of our Dallas distribution center as we focus on better aligning current demand with expenses. We expect to bring the facility online in the next few months. Upon opening, with the completion of phase one, we expect our CapEx investments to slow considerably. In light of scaling down the volume of inbound bags we accept, we recently closed our remaining dedicated processing center in Tennessee and have shifted those resources strategically to Dallas, which will be our largest flagship facility upon completion. Reminder, at full build-out, the facility in Dallas will bring our network-wide storage capacity to 16.5 million items. We expect to be able to methodically expand into this city when consumer purse strings loosen and increase the number of cleanout bags available. Fourth, we remain focused on maintaining our strong unit economics, which will be key to expanding our profits over time. Despite rising labor and logistics costs and higher returns, we expect to continue to deliver expanding contribution margins as we improve automation and efficiencies in our process. Lastly, we have reduced operating expenses amidst an uncertain demand environment. We are rigorously managing variable expenses and CapEx in pursuit of our profitability targets and to target levels. Very important to note that, again, as a marketplace, many of our expenses are variable, not just in supply processing, but more broadly across the P&L. This past quarter, we reduced expenses across headcount, R&D, CapEx, discretionary spending not pertinent to the current growth of the business. Now I'd like to turn to the investments we're making in the business to drive sustainable growth in years to come. We believe the consumer is going to come out of this pullback with higher wages, improved sentiment as inflation subsides, an eye for value, and an ever-greater commitment to sustainability. Of course, the when is not entirely clear, but we want to be prepared to capture that moment and to win share. We did this coming out of COVID. Remember, we grew over 50% in the back half of 2021, and we are planning to do it again. Let me highlight a few of the investments we are making to position our business to capture the apparel market recovery. One, we're making significant improvements to the buying experience. We've doubled down on curation efforts, building tools like visual filters, style matching algorithms, occasion-based recommendations, mobile swiping, and favoriting features to empower the customer to more easily find the right items for them, no matter what they're looking for. We're proud that Thrift the Look, an AI tool that allows customers to shop outfits through image-based search technology, was recently named one of Time's Best Inventions of 2022. Two, we're continuing to focus on Remix, the European fashion resale company we acquired a year ago. Earlier this year, we invested $11 million in a new 320,000 sq ft high-tech processing and distribution center in the company's headquarters in Bulgaria. Expansion plans are on track as we moved all inbound and outbound operations over to the new facility. In the full capacity, this facility will be able to triple Remix's overall output. We're also investing in expanding Remix's consignment inventory, as well as their data science capabilities to improve market efficiencies and its margin profile. Though we are seeing the impact of inflation, rising energy costs, and FX, we remain impressed with the resiliency of Remix's business model and growth trajectory, and continue to believe it is well-positioned to take share in Europe over the long term. Three, we're continuing to grow our Resale-as-a-Service business or RaaS. By leveraging our marketplace infrastructure, RaaS amplifies our supply advantage, increases our sell-through by 50%, and expands our long-term profitability metrics by adding sources of recurring high-margin revenue. We recently launched new resale programs with Tommy Hilfiger, Athleta, Vera Bradley, Francesca's, and Hot Topic. Of note, Athleta and Vera Bradley both expanded their resale programs from Clean Out to full-scale resale shops. Over time, we expect to be able to convert Clean Out-only partners to resale shops as we build full 360 resale experiences for brands. We remain on track to serve 40 brand clients through RaaS by year-end. I'd now like to take a moment to celebrate that ThredUp released our inaugural impact report last month. The report outlines our business and brand-aligned environmental, social, and governance strategies, and details the progress we made across ESG initiatives in 2021. We frequently discuss the eco-impact of choosing used. For example, every time you shop and wear secondhand instead of new, you reduce carbon emissions by 25% on average. The bottom line is, as ThredUp grows, so does our impact. We're also focused on ensuring our own operations are sustainable, fostering a high-integrity workplace culture, and supporting an ethical corporate governance framework. For those interested in learning more about our ESG strategy and disclosures, I encourage you to learn more at our revamped impact website, thredup.com/impact. Lastly, I want to share some of our exciting recent efforts to educate consumers about the impact of their fashion habits and fight fashion waste. Last quarter, we launched a fast fashion hotline, trying to help Gen Z resist the temptation of fast fashion and embrace more sustainable shopping habits. We also partnered with Heinz. Yes, Heinz, the iconic ketchup company, to launch a vintage drip collection with, quote, "ketchup stained apparel." Together, we created a campaign that celebrates the one of a kind statement making nature of used clothes. Just last week, we launched our first ever upcycled holiday collection with designer Zero Waste Daniel, made entirely of secondhand clothes that weren't fit for resale on ThredUp. Collection includes fun items to pet beds and coasters, and it demonstrates our commitment to closing the loop by finding new ways to improve our aftermarket business. Through these efforts, we are inspiring a new generation of consumers to think secondhand first and ushering in a more sustainable future for fashion. Before I turn it over to Sean, I want to close by restating our confidence in our ability to navigate this challenging consumer environment. When the consumer environment recovers and the quote, "great apparel liquidation of 2022 is over," we're confident that ThredUp's mission of providing great brands at great prices in a sustainable way will shine brighter than ever. With that, I'll now turn it over to Sean to walk through our financial results and our guidance. Thanks, James. Again, thanks everyone for joining us on our Q3 2022 earnings call. I'll begin with an overview of our results and follow up with guidance for the Q4 and full year. I will discuss non-GAAP results throughout my remarks. Our GAAP financials and a reconciliation between GAAP and non-GAAP are found in our earnings release, supplemental financials, and our upcoming 10-Q filing. We are very proud of our Q3 results. For the Q3 of 2022, revenue totaled $67.9 million, an increase of 7% year-over-year. Consignment revenue was down 1% year-over-year, while product revenue grew 74%. The decline in consignment revenue and outsized growth in product revenue is attributable to a mix shift driven by our European acquisition and the relative growth of our RaaS supply. Currently, the majority of our revenue from both RaaS and our European business falls under product revenue, though we plan to transition these businesses towards consignment over time. We are focusing our inbound resources on supporting our RaaS clients, which has the effect of fueling product revenue at the expense of consignment during this period of meticulous expense management. In addition, we see return rates move higher as consumers become more selective. We saw this trend continue throughout Q3, negatively impacting our revenue by an incremental $3 million over the same period last year, and is expected to persist in Q4. For the trailing twelve months, active buyers rose 18% to 1.7 million. Q3 orders reached 1.6 million, increasing 24% as compared to the same period last. For the Q3 of 2022, U.S. gross margins declined slightly to 72.4%, a 40 basis points decrease over the same quarter last year. Even as we continue progressing shipping, logistics, and automation, we are facing a gross margin headwind due to the RaaS mix, or due to the revenue mix shift into product revenue, which carries a lower margin. This shift is being fueled by the strength of our RaaS channel, as I described earlier. Consolidated gross margin was 65.5%, a 740 basis points decline over the same quarter last year due to the consolidation of our lower margin European. We've begun to transition the European business towards higher margin consignment supply as we seek to improve its gross margin profile over time. In the near term, Europe's product margins are significantly lower than the U.S.'s. Many opportunities to improve these margins through investments in automation and data science in order to be closer to the 50% range that the U.S. commands. For the Q3 of 2022, GAAP net loss was $23.7 million compared to GAAP net loss of $14.7 million in the same quarter last year. Adjusted EBITDA loss, million dollars, or a negative 16.2% of revenue for the Q3 of 2022, an approximate 380 basis point decline compared to the same quarter last year. The deleverage was largely due to the consolidation of our European business. Our Q3 adjusted EBITDA loss improved over Q2 by $2.5 million or 150 basis points, exhibiting the work we've done to rationalize expenses. Turning to the balance sheet, we began the Q3 with $155.7 million in cash and marketable securities and ended the quarter with $130.6 million. Our cash usage operations was $12.1 million, while we spent $11.7 million on CapEx, largely attributable to our infrastructure build-out. We remain confident in our plans to reach adjusted EBITDA breakeven in the second half of 2023, assuming we achieve quarterly revenue of $80 million–$85 million. We expect growth in the first half of 2023 to be broadly flat to the first half of 2022, but then believe that apparel markets and the consumer environment will be in slightly better shape in the back half of the year. We continue to make progress in reducing expenses and preserving cash during this period of uncertainty. As we described on our last conference call, we've undertaken a company-wide initiative to prioritize expense, rationalization, and cost efficiency. We continue to expect to realize $70 million in savings in 2023 based on our current forecast. We have also trimmed our CapEx plan in twenty-three to less than $15 million based on the current environment, reduced from our previously discussed $20 million. We do not expect this to negatively impact the growth in twenty-three or twenty-four. In Q4, we expect to spend $5 million–$6 million on CapEx. In fact, the bulk of our CapEx plans are related to our Texas distribution center and our annual maintenance CapEx, which excludes any new DC build, is approximately $3 million. We spent $25 million in cash in Q3 and expect this level of spend to steadily decrease in the coming quarters. Our plan to reduce cash burn will be driven by the diminishing needs of our DC network and our cost savings initiatives. Because of our ability to manage our expense structure, we expect to be able to fund the business through our existing cash balance and $70 million debt facility until we reach free cash flow positive. As a result, we want to reiterate that we do not anticipate our cash or marketable securities balance falling below $50 million without drawing down any further debt before reaching free cash flow positive, nor do we expect to turn to the capital markets before then. Turning to Q4, though the competitive environment is proving to be especially difficult to navigate, we see a clear path to the other side. Our top line continues to be affected by weakness in our core lower consumer. On top of that, the current promotional environment in the retail industry is impacting us more severely than we had expected. Beginning in mid-October, we saw an unprecedented degree of early holiday promotion pressure on our business, and our updated outlook assumes that this trend continues through the balance of the year. With this in mind, the Q4, we now expect revenue in the range of $62 million–$64 million, gross margin in the range of 62%–64%, as we now project revenue from RaaS to be a larger portion of sales, which carries a lower margin, an adjusted EBITDA loss of 16.5%–14.5% of revenue, and basic weighted average shares outstanding of approximately 100 million. For the full year of 2022, we now expect revenue in the range of approximately $279 million–$281 million, gross margins in the range of approximately 66%–67%, an adjusted EBITDA loss of approximately 17%– 16.5%, and basic weighted average shares outstanding of approximately 100 million. In closing, we are pleased with our Q3 performance, and though Q4 is proving to be more competitive than we originally expected, we are confident in our ability to navigate this challenging environment. We expect this hyper-promotional landscape to subside as retailers right-size their inventory levels, permitting us to once again compete with resale's compelling value proposition. As apparel and the ongoing improvements we're making in our business materialize, we are confident we can deliver on our breakeven goal in 2023. As James mentioned, we are not sure when the consumer environment will recover, but we know that when it does, we will be in a position to emerge as a stronger, more profitable business on the other side. James and I are now ready for your question. Operator, please open the line. Thank you. If you would like to ask a question, simply press the star key followed by the digit one on your telephone keypad. Also, if you're using a speakerphone, please make sure your mute function is off to allow your signal through to our equipment. Once again, press star one at this time. We'll pause for a moment. We'll first hear from Ike Boruchow of Wells Fargo. Hey, guys. This is Jesse Sobelson on for Ike. You guys mentioned flat growth in the first half of 2023 is expected and are confident in your ability to reach $5 million in the back half of the year to achieve breakeven in each quarter. What sort of macro expectations underpin that view? Yeah, this is Sean. I think the one thing to keep in mind is that we do not expect a consumer recovery to get there. The only thing that we are assuming in our plan for 2023 is that the extreme promotional environment and the inventory excess will have subsided. That's how I would think about how we go through 2023. Yeah, Jesse, the only other thing I'd add is that we, you know, during this very competitive sort of Q4 environment, you know, we continue to pull back on some of our growth investments, and we'll kinda get back to some of those as we get into the first half of next year and see those things compound as we get into the back half of next year. Cool. Thank you. Our next question comes from Trevor Young of Barclays. Great. Thanks. James, I think last quarter you had flagged that the budget value consumer kind of stepped away from apparel broadly. Can you talk about how they trended this quarter and now into 4Q in light of the updated 4Q guide? On the other end, just what's trending on the upscale shopper? Is that holding up better than expected? Yeah. Hey, Trevor. I mean, both of those things continued through Q3 and then have continued through the first part of Q4. I think the only difference is that you know, beginning in October with kinda second Prime Day, Walmart promotions, Target promotions, you just saw this real move earlier, you know, on the consumer's wallet. I think that caused a little bit of friction for us in the business. You know, right now we've, you know, our guidance says that we expect that to continue through the end of the year. The same sort of trends on the budget shopper and the more premium shopper, you know, are consistent. That really is a customer that's sitting out right now from what we can tell. That's really helpful. If I could just follow up on that. You'd flagged before, you know, expecting to flex, you know, on price promo discounts as well as seller payouts to stay competitive. Is there any one of those that's performing particularly well or better in this environment than another? Yeah. I mean, I think, you know, we're trying to make sure that we can flex promotions on and price on all the stuff in Q4 that's sort of in season, holiday themed, you know, on trend. I think we're really trying to make sure that we can flex around the stuff that the consumer wants right now. I think a lot of our efforts is flexing price and promotion around those, you know, hot categories. I think, you know, it's incumbent on us to continue to source that high quality stuff for the Q4 holiday season. Again, you know, it's always in the U.S. been the slowest quarter in our business. You know, customers don't turn to thrift around the holidays, and we think that's even more acute today, as customers' wallets are feeling pinched and they think about gifts around the holiday. We think they're, you know, focused more than ever on new than used at a time like this. Great. Thanks. Our next question comes from Alexandra Steiger of Goldman Sachs. Thank you for taking my questions. Can you maybe share what you're seeing across the ThredUp customer base in the U.S. versus Europe over the past few weeks in terms of what these customers are purchasing on the platform and how they engage with the platform, given the macro headwinds you laid out? Did you notice any change in order frequency versus order value? Just on user growth, you saw negative quarter-over-quarter user growth versus fairly solid growth over the past few quarters. Can you just, like, walk us through the underlying drivers behind that decline? Thank you so much. Yeah. Hey, yeah. Hey, Alexandra. I mean, on the second piece, I mean, I think the again, the budget shopper, I think is a customer who has slowed right now given sort of inflation and the competitive environment. I think that's what's really hit the user growth number. But you know, we expect that to kind of you know, roll over as we get into 2023. To your original question, U.S. versus Europe. I think in the U.S., the trends we were seeing were you know, it's been this incredibly promotional environment that kicked off in mid-October, as I said. I think that has really changed the dynamics for apparel purchasing you know, and our expectations in Q4. I think Europe has been a little different. I mean, you know, I think the inflation numbers have been higher there, so I think consumer wallets have been a little bit more stretched. You have impending, you know, winter coming with the cost of gas prices. Then also, you know, unseasonably warm conditions in a bunch of parts of Eastern Europe, where Remix operates, have sort of pushed back what typically is a move into winter clothing and outerwear. You know, I think that is starting to change right now. I think last week was the coldest it's been in that part of the world this year, and so we expect to see some movement as we get through the rest of the quarter. Thank you. Tom Nikic of Wedbush Securities. Hey, everybody. Thanks for taking my question. James, Sean, I guess, you know, obviously a lot can happen, you know, between now and the second half of 2023, but you know, kind of, you know, based on, you know, what your Q4 guidance is for this year, you know, to get to a $80 million–$85 million run rate, you know, in the second half of 2023 would, you know, so just fairly healthy year-over-year revenue growth, you know, in late 2023. You know, is it just that, you know, you kinda think that, you know, the customer comes back, you know, to you guys when they can't find deals in, you know, the primary market? Like, you know, I guess kinda what sort of, you know, informs the growth that you're kind of assuming comes late next year to get to the EBITDA breakeven? Yeah. Hey, Tom. Sure. I mean, you know, keep in mind, right, the last couple of quarters, we've pulled back pretty significantly on processing and on marketing, right? On the growth side, as we think that this is a consumer environment that we're, you know, leaning in on processing, leaning in on growth doesn't make a lot of sense, especially right now, you know, given where inventories are across retail. It almost feels like it's not a fight worth fighting, you know, with how we spend some of those dollars. I think that really changes as you get midway through next year where, you know, the processing ramp, the demand curve improves, we spend more dollars, you know, on the growth side. I think those things really come together. I think it then catches a consumer in just, like, a slightly different environment that's not nearly as promotional and as painful, you know, for the budget shopper it is right now. That's kind of the thesis. You know, we've been through this before, right, Tom? I mean, similarly, go back to 2020. You know, 2020, very similar type of dynamic in the back half of 2020, and then the business really ripped for 5 quarters. I'm not suggesting that that's what's gonna happen, but we've been through these types of cycles before, and feel like we can kind of meet the moment as we get into 2023. Understood. Thanks, James. Best of luck for the holiday season. Thanks. Next, we'll hear from Rick Patel of Raymond James. Thank you. Good afternoon, guys. Hoping you could provide color on the outlook for return rates. I'm just curious how much of a drag you have embedded in the Q4 and any initial thoughts on 2023. You know, can you talk about any initiatives underway to improve this, whether it's being more selective with the product that you take on or maybe leaning into data to improve customer satisfaction to lessen that drag? Yeah. Hey, Rick, this is Sean. Yeah, I'll start, and I think James will finish. Is that our assumption in Q4 would be very similar to what we saw in Q3. It was about a $3 million drag on revenue. You know, we've seen the return rates continue to increase as times have got worse and things have been a little more challenging. The consumer's obviously, you know, maybe a little more focused on cash back or buyer's remorse, whatever it is. We've seen the return rate kind of spike up, and we're working on quite a few different things internally to help resolve that, and I'll let James talk about those. Yeah. Rick, I mean, I think you know, you can see across many retailers, you know, rethinking how do returns work, you know, in this new environment. We have a bunch of stuff we're working on right now, not just, like, changing the price equation to the consumer, but how do we present the product in better ways that reduce returns, or how do we change what can be returned and what can't be returned, as well as, like, waiving some of the items that get returned to us and letting you keep them. There's a bunch of things that we're working on that I think will take returns down as we get into 2023, but it is 100% a real headwind here in the back half of the year. You're pushing forward with Resale-as-a-Service on track for, I believe 40 clients, by year-end, which is great progress. Can you give us any initial thoughts on RaaS for 2023? I'm curious if you see potential partners moving ahead with their circular economy strategies or if they're just pausing given the uncertain economy. Yeah, I mean, I think 2023 is gonna be a really important year for RaaS. I mean, I'm thrilled that we've managed to continue to meet our goals of new client signings. I mean, getting to 40 by the end of the year in this apparel environment, I think is really speaks to the value proposition of RaaS. I actually think into 2023, you're gonna see more retailers think about this, especially as their inventory positions get better into focus. You know, they don't have quite as much excess. No, I don't think I have any like news to share on how we're thinking about client growth in 2023, but I think 2023 will be a good year for RaaS. You know, we've already signed a number of clients this year that we're ready to launch in the first part of next year. Good momentum, I think, on that, Rick. All right. Thanks very much. All the best in Q4. Thank you. Edward Yruma of Piper Sandler. Hey, guys. Thanks for taking the question. I guess two for me. First, on the Ops, Product, and Tech side, I noticed that it actually fell sequentially. I just wanna click down on that a little bit and understand. I know you've been doing cost cuts. Is this the level we should baseline going forward? Should we expect this to ramp up at all? And then second, I know you delayed some of your CapEx. Could you just help us understand exactly when that incremental CapEx will hit the cash flow? And as you guys kinda talked through some of the cash flow dynamics, I think you said that you wouldn't need to raise capital, but do you expect to have to draw on that bank line, or do you think that your existing cash is sufficient? Thank you. Yeah. This is Sean. We do think our current cash is sufficient. We don't expect to draw on the bank line. I think from a CapEx perspective, we kinda lowered what we had talked about spending in the last earnings call. I think we're at $5 million–$6 million for Q4 and under $15 million for all of 2023. If you think of just a kind of a quick comparison of what we spent in 2022, we're gonna spend about $45 million in CapEx, where now we're talking in 2023 under $15 million. A significant reduction in the amount of CapEx we're gonna spend. I think your first question maybe was on OPT. Yeah. The OPT piece is pretty much what you saw in Q3 is fully impacted for what you're gonna see in Q4 and beyond, except for the fact that it's truly variable. As demand increases, we're gonna process more items in, so we have more items to sell. That's one area where I would say is, as you see revenue go up, you're gonna see the OPT line go up, similar to marketing. Yeah. I, the only thing I would add, Ed, is just, I mean, I think as you get through Q1 of 2023, you're really the infrastructure for the business is pretty well built out for the next few years. You know, I don't think we expect to do much on the CapEx side, even into 2024, it'll be pretty small. By the time you get to Q1, we're gonna be in very good shape with what we need from an infrastructure perspective for a number of years, which, as Sean said, significantly reduces the burn. That puts us in a really nice position to invest and grow the business as we get into the back half of 2023. Ultimately, I think we get to adjusted EBITDA breakeven in the back half of the year, and I think free cash flow positive, you know, a couple quarters after that. Great. Thanks so much. Our next question comes from Dana Telsey of Telsey Advisory Group. Good afternoon, everyone. As you think about the marketing budget, not only for, but going to next year, how are you planning that marketing budget? Also, as you think about the levers, fixed and variable expenses, what adjustments are you making as we go through this environment? Thank you. Hey, Dana, it's James. I mean, I think on the marketing side, we continue to see very attractive acquisition costs. You know, typically, you know, back on marketing in Q4, as I said, you know, because of the holidays, and how resale is not, you know, top of mind necessarily, during the holiday period. We kind of get, you know, we get going then again in Q1. Look, I think the acquisition environments are gonna be very attractive next year. I think the combination of apparel pricing normalizing, acquisition economics being good, I think is actually a very nice setup for the back half of next year. I think on the you know, fixed versus variable, I think as Sean said, you know, much of our business is variable when it comes to processing and growth investments. I think the infrastructure and the fixed investments are, you know, we're pretty much done once we get through Q1 of next year. I think that's a really good position to be in for the foreseeable future in an environment where the customer's gonna be looking for value, and we're gonna have all of the opportunity to meet that demand. Got it. Just on the DCs, how do you think of the capacity utilization, whether it's Dallas or the European DCs? Anything you could do to manage that cost through this time period? Yeah, I mean, I think we have now built, you know, we have plenty of capacity, I think, in 2023, 2024, you know, potentially, you know, even beyond that. We will continue to sort of ramp up, you know, processing and marketing investments, you know, given where the consumer environment is. I think, again, I think this is a really tricky time with where apparel inventories are. I don't think this is a time when we really wanna lean in, but I think that's really gonna inflect as you get into 2023. I think it's gonna be great that we have the capacity and the processing capabilities to do that in a time when the consumers are gonna be searching for value. Again, I think that's a really nice setup for us as we get into 2023. Got it. Thank you. Our next question comes from Noah, I'm sorry, Noah Zatzkin of KeyBanc Capital Markets. Hi. Thanks for taking my question. Just to drill down a bit on RaaS, could you provide any color on how you're thinking about the P&L impact there over time? Relatedly, as partnerships ramp from a timing perspective, how should we be thinking about any upfront costs versus the timing of revenue flow? Thank you. Yeah. Hey, Noah. Yeah, I mean, on the RaaS side, you know, remember, you know, RaaS does a couple of things for us. It amplifies sort of our supply advantage. To think about that as, you know, we take a fee for every bag that we process on behalf of a brand, and that is, you know, very, very high margin revenue. It nearly drops to the bottom line. It has implications on, you know, the bottom line as we scale RaaS supply. And then I think on the resale shop side, as we launch them, you know, ultimately, it's continuing to build incremental points of distribution, where the same product that's sitting in our facility can be sold across many different websites. Ultimately, that increases turns and sort of return on fixed assets in our DCs. You know, I think in both areas, RaaS really amplifies, like, what the business is doing. It continues to grow nicely, and I think 2023 will be a good year as we continue to expand the 40-plus clients that we've signed in 2022. I'm pretty bullish on how RaaS plays out over time. Thanks a lot. Anna Andreeva of Needham. Great. Thanks so much, and good afternoon, guys. Two questions, I guess, to Sean. Just curious, what was the cadence in the business in the Q3, and what are you guys seeing quarter to date? You mentioned elevated promotions in October, but curious if you already saw a step down in the business or just expecting that ahead as we get through the holiday. And then secondly, I guess this is to James, what are you seeing in the resale space, just in terms of new entrants? Feels like it's getting a little bit more competitive, maybe not so much at your price point, but just curious about your thoughts there. Thank you. Thank you. Yeah. Hey, Anna. Yeah, from the Q3 monthly cadence, it was pretty much what we have seen historically. There wasn't anything like a big outlier. I mean, back to school, nice. It looked pretty good. I think once we got to October, that's where we started to see everybody get promotional early. I think we talked about, you know, Black Friday was, you know, started in early October, middle of October, whatever it is, or Walmart's Black Friday every Monday. So I think that's where we started to see the impact on the business was really happening in October. We've gotten to a point now, I think, where we feel like it's leveled off, but it's definitely a promotional environment out there. Yeah. I mean, you know, to echo that, I mean, I think we feel like Q4 is now, you know, pretty stable, but in our guidance is we just think it's gonna continue to be promotional. Anna, can you say the second part of your question again? Just what are you seeing in the resale in terms of new entrants? Got it. Yeah. I mean, I think that there are, you know, there's always gonna be startups that attack any kind of big category. I don't think we're seeing anything in our business that's, you know, where we feel like, you know, competitors, you know, are making inroads. I think look, I think in general, as I said, you know, with a market that's this big, you expect there to be, you know, some push and some innovation and, you know, I think over time, you know, the more resale, the better, and I think we'll take our chances with our model over time, you know, and the opportunities to scale that. All right. Thanks so much, guys. Next, we'll hear from Lauren Schenk of Morgan Stanley. Great. Thanks. One for Sean. Just on the Q4 guide versus the previous implied guide, I think revenue down $8 million dollars or about EBITDA losses down an incremental $4 million. I think sort of the change in the top line outlook is clear, but I guess just given the variable nature of the model, where is that incremental $4 million dollars coming versus your previous expectations? Thanks. Well, yeah, no, I would think it's you have the kind of the impact to the business as Europe becomes a bigger portion of the business, so that comes down as well. I think you're seeing the promotional environment, so that's starting to hit it as well. I think you're dropping some of the overall impact to the bottom line on EBITDA. Yeah. I think you see contribution margins come down, Lauren, as the environment gets more promotional. Even though you're, you know, you're taking revenue down, you know, that revenue is less productive than it would've been, you know, in prior periods. Look, I think we're sort of tucked in and prepared for things in Q4 to continue to be challenging. I think that's also reflected in the guide. We felt like it was prudent, you know, as we think about, you know, what is it gonna look like for retailers over the next 45 days. Like, it could get bloody out there, and we wanna sort of level set expectations for that. Understood. Thank you. It appears there are no further questions at this time. I'll turn the call back over to our presenters for any additional or closing comments. Great. Thanks, everyone for joining us on the Q3 call. Thank you to all the employees for doing all incredible work here at ThredUp and to the broader team. You know, we'll get through this. It's a difficult time in Q4 given the environment, but we'll live to fight another day on the other side of it. Thank you all, and we'll see you next time. Thank you. That does conclude today's conference. Thank you all for your participation. You may now disconnect. Everyone else has left the call.