Good afternoon, ladies and gentlemen, and welcome to the ThredUp Q3 2023 Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If, at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Monday, November 6th, 2023. I would now like to turn the conference over to Lauren Frasch, Senior Director, Investor Relations and Strategic Finance. Please go ahead. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss ThredUp's Q3 2023 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, including, but not limited to, statements regarding our earnings guidance for the fourth fiscal quarter and full year of 2023, future financial performance, including our goal of reaching adjusted EBITDA breakeven, 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, climate change, 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 results expressed or 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 posted 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 in isolation from GAAP measures. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures in our earnings press release and supplemental information posted on our website. Now, I'd like to turn the call over to James Reinhart. Good afternoon, everyone. I'm James Reinhart, CEO and co-founder of ThredUp. Thank you for joining ThredUp's Q3 2023 earnings call. We are excited to share ThredUp's financial results and key business highlights from our Q3. In addition to our financial results, we will provide an update on key company-specific initiatives contributing to our growth, ongoing expansion of adjusted EBITDA, and some early thoughts on 2024. I will then hand it over to Sean Sobers, our Chief Financial Officer, to talk through our Q3 2023 financials in more detail and provide our outlook for the Q4 and fiscal year 2023. 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 despite a highly dynamic environment. We delivered accelerating revenue growth, outperformed on gross margin, and inflected our active buyer count for the first time this year to achieve a record number of active buyers. Our revenue of $82 million is an increase of 21% year-over-year. Our consolidated gross margin exceeded expectations at 69%, driven by another record gross margin in our U.S. business of 78.5%. We are especially proud that our record active buyer count returned to growth in such a competitive retail environment, reaching 1.8 million, up 4% compared to the same quarter last year. We continue to be pleased with our improvements to Adjusted EBITDA, as we posted a loss of just $3.6 million, an 1,180 basis point improvement year-over-year, and a sequential improvement of 170 basis points from the prior quarter. Of note, we increased expenses across operations, product, and technology just 4%, while driving 21% revenue growth and 27% gross profit growth. We believe this best illustrates the ability for our marketplace to achieve increasing efficiency at scale. Finally, on top of record gross margins, I want to share that our US business reached adjusted EBITDA breakeven and generated free cash flow in Q3 for the first time in our company's history. While we still have some work to do in Europe, we are increasingly confident that executing on our US playbook in Europe will yield similar success. I'd now like to provide an update on our progress towards EBITDA breakeven on a consolidated basis and some initial thoughts on 2024. With just one quarter left in our fiscal year, we have clear sight to achieving our goal of reaching quarterly EBITDA breakeven, but not on our original Q4 timeline. There are a few primary reasons for this. First, there are accelerating headwinds in Europe. Since our European business is not a consignment-based business yet, there are fewer levers to manage gross margins. We expect this to change over time as we transition to consignment, but in the meantime, it is presenting a headwind to our consolidated margins. Second, is an uncertain macro environment that's continuing to pressure discretionary spending in both the U.S. and Europe, resulting in a weaker consumer landscape than we had anticipated. And third, given that challenging backdrop, in order to maintain momentum in our buyer growth into 2024, we've chosen to be incrementally more promotional to set us up for success next year. With active buyer growth returning, we made the decision to fuel our momentum rather than extinguish it in pursuit of short-term goals. We've remained committed to building a business for the long term and will not optimize for short-term optics when faced with difficult decisions... It is these types of decisions that enable us to be extremely proud of the continued progress we're making towards our growth and profitability goals in the face of ongoing consumer uncertainty and a competitive promotional environment. We expect the U.S. business to again be EBITDA positive in Q4, despite Q4 historically being our slowest quarter in the U.S. At the midpoint of our annual guidance for 2023, we expect to grow revenue 11% and expand EBITDA by nearly one thousand basis points. Quarter after quarter, we've demonstrated that we are one of the best performing companies in 2023 on a revenue growth and margin expansion basis, and we remain confident that we'll be breaking even for the total company on an annual basis in 2024. We still view break even as a way point to our future, and we'll continue to make decisions based on what's best for building a sustainable and generation-defining company that endures long beyond arriving at this milestone. Though retail has been grappling with an extended consumer malaise, this challenging backdrop has only strengthened the underlying engine of our business. ThredUp is executing at a high level and returning to active buyer growth while expanding margins, is key proof of this. As we look into 2024, we plan to pursue the clear opportunity to accelerate our current momentum in both the U.S. and Europe, while achieving break even on a full year basis. While the consumer landscape continues to be choppy and retail remains highly competitive, we believe resale benefits as consumers continue to prioritize value and seek deals, and we're confident in the team's ability to manage the business in this environment. As we head into the final quarter of the year, we will maintain our focus and steady approach in controlling the controllables, how we spend our time, the quality of the decisions we make during times of uncertainty, the urgency we have to invent on behalf of our customers, and the willingness to keep learning what's different this time around. I'm grateful to the exceptional team at ThredUp, who shows commitment and grit every day in service of delivering on our goals. I'd now like to provide an update on some of the key company initiatives that are enabling us to drive revenue growth, active buyer growth, and margin expansion. First, we're continuing to make progress towards our vision to create a marketplace experience that achieves the highest levels of customer satisfaction. Over the last few quarters, I've shared initial tactics related to our Thrift Promise, which aims to do right by the customer with every order. In Q3, we debuted our delivery promise with the goal of delivering purchase to doorstep shipping in three days or less. Our dedication to delivering a delightful post-order experience is not only improving retention, but also improving the margin profile of our business. Our return rate in Q3 decreased by more than 700 basis points compared to the same quarter last year, and since we first launched Thrift Promise, we've generated $ millions in logistics savings. Second, we're deepening our commitment to our community of sellers with a renewed focus on providing the easiest and most convenient way for people to resell apparel online. We have a diverse seller base, but whether you're an everyday seller who wants to just get it out of the house, a VIP seller seeking expedited processing times, or a Resale-as-a-Service client customer interested in getting credit to your favorite brands, we're expanding our offering to cement ThredUp as the go-to destination for all types of sellers. Third, as we continue to apply learnings from our U.S. business to our European business, we're driving more active buyers in Europe. Of note, we've rolled out Keep for Credit to our primary European markets after seeing success in the US, and we've made meaningful progress with the shift to consignment sales. Short-term, the transition to consignment will present a real headwind to revenue due to the accounting treatment, which Sean will discuss more in a minute. Long-term, consignment will significantly improve gross margins, expand the selection of high-quality supply, and ultimately yield ongoing net revenue growth. Fourth, our Resale-as-a-Service business, or RaaS, has added several new brands to its client roster, including Beyond Yoga, part of Levi Strauss & Co., Smartwool, part of VF Corporation, and Journeys. As a reminder, RaaS enables brands and retailers to deliver customizable and scalable resale experiences to their customers. By leveraging ThredUp's marketplace infrastructure, RaaS amplifies our supply advantage, increases our sell through and return on assets, and expands our long-term profitability metrics by adding sources of recurring high margin revenue. Finally, we're continuing to deploy artificial intelligence across our distribution center network and our product experience, seeking new applications that lower processing costs and lead to greater economic value. To give an example, we're using AI to build a robust product catalog with millions of unique items, and to surface a more personalized selection from that inventory, all allowing customers to seamlessly shift through our vast assortment to find items they love faster. By evolving and executing against these initiatives, we believe we will create enterprise value over time. Turning to impact. In our pursuit of enterprise value creation and profitability, we're also proud of the social impact our business has on our people, our communities, and the planet. In Q3, ThredUp was named to TIME's 100 Most Influential Companies of 2023, and Digiday recognized us for exemplary workplace and company culture in its WorkLife 50 Awards. As a team, we aim to balance purpose and profit and believe holding these with equal importance is critical in furthering our mission to inspire a new generation of consumers to think secondhand first. Before I turn it over to Sean, I want to reemphasize the strength of our Q3 performance and our commitment to balancing the demands of short-term scrutiny and long-term value creation. The macro environment remains uncertain, and the retail landscape is highly promotional, but we've never been afraid of a challenge and have always persevered when things get tough. We believe we're focused on the right strategic initiatives as we close out the year and expect positive momentum into 2024. I'm excited about how far we've come, but more importantly, I'm excited about where we're headed next. With that, I will now turn it over to Sean to go through our financial results and guidance in more detail. Thanks, James, and I'll begin with an overview of our results and follow up with guidance for the Q4 and the 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 10-Q filing. We're very proud of our Q3 results, which we believe reflect our ability to execute in a challenging retail environment. For the Q3 of 2023, revenue totaled $82 million, an increase of 21% year-over-year. Consignment revenue grew 39% year-over-year, while product revenue shrank by 8%. We are pleased with the accelerating growth in consignment revenue as we continue to make progress in transitioning our RaaS supply and our European business to a consignment model. Though we are still early in our Europe transition, we are proud to report that as of this month, all of our RaaS partnerships are on a consignment basis. While the transition of these businesses to consignment should be a tailwind to growth margin over time, we expect it to slightly mute revenue growth simply due to the accounting treatment. As a reminder, consignment payouts reduce net revenue, while own payouts are in COGS and reduce gross margin. We're happy to report that we achieved a record number of active buyers this quarter, reaching 1.8 million, growing active buyers for the first time this year. Orders increased 11% year-over-year to 1.8 million. For the Q3 of 2023, gross margin was 69%, a 350 basis point increase over the same quarter last year. Given the ongoing transition to consignment and the resulting shift in the accounting for revenue, we believe that gross profit dollars are the best indicator of our underlying growth and are pleased to report that our Q3 gross profit grew an impressive 27%. Our consolidated results exceeded our expectations, driven by record US gross margins of 78.5%. This outperformance was a result of converting our RaaS business to consignment sooner than expected and continued improvements in how we optimize our marketplace, including pricing, promotions, returns, payouts, and fees. For the Q3 of 2023, GAAP net loss was $18.1 million, compared to a GAAP net loss of $23.7 million in the same quarter last year. Adjusted EBITDA loss was $3.6 million, or a -4.4% of revenue for the Q3 of 2023. We reduced our EBITDA loss in Q3 by two-thirds versus last year, representing an approximate 1,180 basis point improvement, as we tightly managed expenses and leveraged our investments on higher revenue. To this point, we are proud to report that our hard work drove a 21% year-over-year revenue increase and a 27% gross profit increase on just a 4% increase in ops, product, and technology expenses, illustrating the powerful leverage of our marketplace model. Turning to the balance sheet, we began the Q3 with $82.6 million in cash and marketable securities and ended the quarter with $80.2 million. We are proud to report that we used just $2.5 million in cash in Q3. Our significantly reduced cash burn is due to reaching cash flow positive from operations, in addition to spending maintenance levels of CapEx of just $1.5 million. As a reminder, in Q3 of last year, we used $25 million in cash, illustrating the enormous progress we've made over the last four quarters. We have made significant progress this year on our path to profitability, reducing our EBIT- EBITDA loss in every quarter this year, allowing us to achieve EBITDA breakeven and free cash flow in the US in Q3. While we expect the US business to continue to be EBITDA breakeven in Q4, it will not be enough to overcome losses in Europe and reach consolidated breakeven on our targeted timeline. However, we expect to achieve breakeven on an annual basis in 2024. As we look to 2024, we believe there are two important factors to consider when contemplating revenue growth. First, our ongoing transition to consignment will drive gross profits and margin improvement, but mute revenue growth due to the accounting treatment. Second, as James mentioned earlier, we are operating in a highly competitive retail environment that continues to challenge ThredUp's value proposition, which we would expect to continue through 2024. Due to our reduced CapEx needs and our ability to manage our expense structure, we were able to significantly reduce our cash burn in Q3. We expect to continue at maintenance CapEx levels of approximately $2 million per quarter until 2026, which provides us with a high level of confidence that we can fund the business with our existing cash until we reach cash flow positive. We want to reiterate that we do not anticipate our cash and marketable securities balance falling below $50 million before reaching free cash flow positive, nor do we expect to turn to the capital markets or draw down on our existing debt before then. Turning to guidance, we are adjusting our Q4 outlook to account for mounting headwinds in Europe and a challenging consumer buyer environment in the US. For the Q4, we now expect revenue in the range of $79 million-$81 million, which is a 12% growth rate at the midpoint. Gross margin in the range of 61%-63% of revenue, adjusted EBITDA loss of 2% of revenue to breakeven, and a basic weighted average shares of approximately 108 million. For the full year of 2023, we now expect revenue in the range of approximately $319.5 million-$321.5 million. Gross margins in the range of approximately 66.2%-66.7% of revenue, adjusted EBITDA loss of 5.3%-4.7% of revenue, and basic weighted average shares outstanding of approximately 105 million shares. In closing, we are extremely proud of the progress we've made towards our growth and profitability goals, even if not on the timeline we had originally planned. Despite ongoing consumer uncertainty, we remain confident in the underlying ThredUp engine and look forward to delivering results that demonstrate our capacity to navigate this difficult environment and emerge a stronger, more profitable business on the other side. James and I are now ready to take your questions. Operator, please open the line. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a three-tone prompt acknowledging your request.... Questions will be taken in the order received, and should you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please leave your handset before pressing any keys. One moment, please, for your first question. Thank you, and your first question comes from the line of Ike Boruchow from Wells Fargo. Please go ahead. Hey, guys. Just a couple questions from me on the outlook for 2024. Understanding the headwinds to revenue, I guess there a couple questions would be: Is the revenue guide that's more muted now for Q4, is that a good baseline to kind of think about how we should think about fiscal 2024? Maybe a follow-up to that would be, Sean, based on the headwinds that are in there, based on the consignment, you know, the mix of consignment, can you give us roughly what you're expecting the consignment mix to look like in 2024? Yeah, those are my two questions. Thank you. Yeah. So I think the basis for the Q4 basis is it's fairly good. We're still migrating more revenue to the consignment model, because even though we've moved all of our partners from RaaS over to consignment, we still have inventory we need to sell through. So that actual consignment percentage of revenue will continue to go up as we go through 2024. In addition to, we are actively migrating the business in Europe also to consignment. So, yeah, I would expect that, that ratio between consignment and owned to continue to increase all the way through 2024. I, I was gonna- Which will not- I'm just curious. Yeah, I guess I'm just curious, can you give a little bit more detail? Like, is it, like, 65% of rev, 70? Like, I'm not sure. Just understand how, like, the context of how much mix benefit there is and pressure on revenue and then benefit on margin. Yeah. So, I mean, the U.S. business kinda collectively is about 80% of the business, and that by the time we exit 2024, it'll be almost entirely consignment at that point in time. Yeah. And Europe will just basically start transitioning now, and I think by the time we end 2024, you can think of it's gonna be something like around 80 in total, as a percentage of consignment. And I think to your question on the revenue piece, I mean, I think... Yeah, I mean, I think Q4 is a baseline as we, as we think about going into 2024. I mean, we still feel very good about the momentum into 2024. It's just as you got into a little bit of, you know, back to school holiday season, especially in Europe, it was just a little bit softer, you know, than we had anticipated. And so, you know, rather than try and lean into those numbers, we thought, you know, let's make the smart decisions and set ourselves, set ourselves up for 2024 in a smart way. So that reflects in the guide. Got it. Cool. Thank you. Yep. Thank you. Your next question comes from the line of Dylan Carden from William Blair. Please go ahead. Thank you. A couple ones, I guess. Just curious, the gross margin that you achieved in the Q3 and the sort of step down in the Q4 looks to be a little bit bigger than the seasonality that we might otherwise expect. Anything to call out there, particularly as you're, I mean, is that just reversal of some of the what you just were speaking to, as the consignment versus product revenue? Yeah, Dylan, definitely some of it is the consignment piece, and the mix in Europe, right? Because Europe is. Q4 tends to be their biggest quarter, and so you have a little bit of that revenue at lower gross margin sort of coming in. And then the other piece is, as we've said, I mean, it's a promotional environment out there, and we've made the conscious decision to be incrementally, I think, more promotional to continue to grow active buyers and maintain buyer engagement. Because we ultimately think that's the right strategy as you get into 2024. And so on the margin, I think we're being, you know, a little bit more discounting than we were in Q3. But again, we think that's the right approach in this environment. You know, I think that'll play out well for us in 2024. Great. For next year, I know it's early, but just sort of thinking through seasonality, there's a lot of moving pieces as it relates to consignment versus product. Just anything to call out as far as revenue trends, margin inflection, sort of back half inflection? Yeah. I mean, I think at least, Dylan, Sean, I would say at least as you go through gross margin throughout the year, with the consignment shift, you should start to see kind of improving gross margins on a quarterly basis, certainly year-over-year. So those should improve. I think that's... And the seasonality is gonna be fairly similar, other than we're creating a little bit of a, you know, a muted headwind on the revenue side as we move to the consignment model, both in kind of the rest of the U.S. related to RaaS, and then as Europe really picks it up and starts to transition to consignment. Yep. Got it. And then as far as kind of the capacity utilization of your new distribution capacity, where are you there? And, you know, how is that maybe showing up in the model? I mean, no real change from you know, the last call. I mean, we continue to have, you know, strong ability to kind of expand into DC07 in Dallas. But I think as the business has continued to turn product even faster, I mean, I think our CapEx needs are pushed out even further. So I think we're in great shape, Dylan, on a utilization basis and plenty of room for growth in those facilities. Yeah, I think we're very confident we won't need that CapEx until 2026 at the earliest. I guess I meant more from a margin perspective. Have you sort of grown into that more so incrementally from the sort of Q3 or Q2, rather, and sort of how is that showing up in margin? ... Yeah, there's a little bit of that as we've moved some of the logistics network around. So we're now, you know, consolidating orders more efficiently than we were before. So yeah, Dylan, definitely some of that is starting to come through in Q3. But you should see some of those tailwinds continue into 2024, and, you know, I think the U.S. gross margin should continue to expand incrementally, you know, as we move through 2024. Great. Thanks, guys. Yep. Thank you. Your next question comes from the line of Edward Yruma from Piper Sandler. Please go ahead. Hey, guys. Good afternoon. Thanks for taking the questions. I guess first, you know, on the promotional environment, given the rough kind of outline you gave for 2024 guidance, should we assume that the promotional environment persists, or is that embedded within that 2024 kind of thought process? And then as a follow-up, there have been some, I guess, newly public peers that are starting to expand in resale. Are you seeing any kind of incremental competitive pressures when some of these physical doors open locations? Thank you. Hey, Ed. Yeah, I mean, we're not seeing any, like, at least as far as we can see in our data, any incremental pressure from other resale players. I mean, really, what we're seeing is, as we sort of got through the back-to-school season and into this early holiday season, where October was very promotional, we really had two paths. Like, one path was to, you know, be less promotional and sort of drive margin expansion. But we thought really active buyers is the name of the game, and so it was a better strategy to provide a little bit more discounts, a little bit more on the promotional side, to both drive active buyer growth and, you know, continuing engagement. So that has really been the plan, and we expect the environment to continue to be promotional in 2024, and I think our numbers, you know, reflect that. But there's nothing right now that we're seeing that makes us, you know, have any fear that 2024 is gonna get worse. It's just about being smart with customer engagement. And, you know, think about what we did in Q3. We were promotional in Q3 in the U.S., and the business was EBITDA breakeven and free cash flow positive. So, like, that strategy is a winning one. What really we're focused on is the consignment transition in Europe, 'cause that's really the headwind for us in Q4, and I think that'll be the work to be done in 2024, is how do we transition that business as efficiently as possible? Thank you. Thank you. And your next question comes from the line of Trevor Young from Barclays. Please go ahead. Great. Thanks. James, could you provide an update on what you're seeing among different buyer demos? Any color on demand from the more value or budget shoppers versus higher income shoppers would be helpful. And then second, the slides talk to an expected 20% industry CAGR through 2027. Is there any reason why you couldn't match or even exceed that growth rate in the coming years, i.e., gain market share? I realize, appreciating Sean's comments about the product versus consignment mix headwinds, so maybe we look at, like, GP or order growth as a proxy versus that industry growth. Is that the right way to think about it? Yeah. Thanks, Trevor. Yeah, I mean, I do think, I do think gross margin and gross profit dollars is the right way to think about it. It's very similar to, you know, when we, when we came public, the U.S. business was going through that transition, and, you know, we've navigated that, I think, you know, very effectively. I think that's where the—why the U.S. gross margins are at the records that they're at. So we expect that same thing to be true, and, and I do think that when you look at it on a gross margin growth basis, yeah, that, that 20% seems, seems fair. I mean, Q3 was, was 27%, you know, in, in that category. So we do think that that is something that we will continue to strive for. Buyer demo. Oh, and the buyer demo question, sorry. Look, I think we've done a really, really good job as a team of focusing more of our buyer efforts on a slightly more premium shopper. So this is a story, you know, we've been telling for some time now, and I think now all of that work that we've done to acquire that incrementally more premium buyer and deliver them incrementally more premium product, I think is now, like, proving to be fruitful. And I think that's why you're seeing active buyers now up year-over-year. I think that's why you're seeing active buyers up sequentially. You know, we expect that trend to continue into Q4 and into 2024. I think the segmentation strategy that we've done is working, and I think we'll continue to execute on that plan. Great. Thank you. Thank you. Your next question comes from the line of Anna Andreeva from Needham. Please go ahead. Great. Thanks so much, and good afternoon, guys. Two questions from us. Could you elaborate a bit more just on what you're seeing in Europe? Have those headwinds gotten worse quarter to date? And does the Q4 guide contemplate bigger sales decline at Remix or consignment revenues more moderate as well just given your October comments? And secondly, not sure if I missed this, but what drove the upside to the Q3 gross margin? Just impressive beat despite environment getting worse. Thanks so much. Hey, Anna, this is Sean. I'll do the gross margin piece first. I think that the outperformance in gross margin came from the RaaS goods transitioning faster consignment, as well as kind of our normal ongoing improvements to our operations and marketplace, such as pricing, fees, payouts, and general automation and efficiencies. That was all driving the overall gross margin in the US. ... Yeah, and Anna, to your question about the, on the European side, I mean, I think really what we're seeing is just it's a little bit softer than we had expected. And I mean, one of the things we're really just starting to see now is that the weather is changing, right? It's a much more seasonal business there, especially in that part of Eastern Europe. And so as it gets colder, we think we can see some momentum there, but right now, it's a little softer than we had expected. And frankly, if you look at the U.S. business being EBITDA breakeven and free cash flow positive in Q3, we expect similar trends as we get into Q4. It's just not enough to overcome, you know, some of the headwinds in Europe. And so, you know, I think that was something that was hard for us to see, you know, six quarters ago when we were forecasting breakeven in Q4 with that mix. But again, we feel very good about the underlying fundamentals in both businesses, and we just didn't want to make anything too short-term-y trade-offs, right, in Q4 and focus more on opportunities as we move into 2024. The Q4 guidance contemplates literally everything we knew as of, let's say, Friday last week. Yeah. All right. Fair enough. Thanks so much, guys. Thank you. Thank you. And your next question comes from the line of Rick Patel from Raymond James. Please go ahead. Hi, guys. This is Josh filling in for Rick. I was wondering, can you talk a bit about, cost savings you're seeing from the improved return rates, and how should we think about the impact of that on EBITDA in 4Q? Sure, Josh. Yeah, I mean, I think we saw 700 bps of improvements on our return basis year-over-year. And, you know, I think all of the work that we began at the beginning of the year around Keep for Credit, Thrift Promise, are all those things are continuing to bear fruit, and I think they're reflected in the Q4 guide. And I think that's, again, you know, focused on the US business. That's where we're seeing that positive momentum on the return rate, and I think that's what reflects the EBITDA beat in Q3 and into Q4. And so again, the story really for us is just continuing to tweak what we need to do on the European side to be in a better position. Okay, yeah, and any initial thoughts on the way that'll impact, 2024? I mean, we expect return rates... I mean, our goal here is everything we're doing is return rates are going to improve. Yeah. Obviously, that'll improve across the board, but nothing specifically for 2024 yet on that side. Okay, yeah. Thanks so much for the call today. Thanks. Thank you. Your next question comes from the line of Tom Nikic from Wedbush. Please go ahead. Hey, guys, thanks for taking my question. Sean, a modeling question, for you. So in the Q4, the revenues should be a bit lower than they were in the Q3, and the gross profit should be lower. But I believe the Adjusted EBITDA loss should be smaller, which would suggest that, you know, the OpEx would be down quarter-over-quarter. Can you help us think about the buckets, the ops and tech, the marketing and the SG&A, and how we should think about those lines? Yeah, no, you're exactly right. I think the biggest driver to that is the decline in marketing in Q4. Generally, I think if you look historically, what we've done in Q4, in particular from a US business, we've brought down marketing spend. You know, still today, you know, secondhand isn't a gift-giving destination yet, so marketing is super expensive in the Q4, so we pull back on the US, and that's the biggest driver as far as kind of OpEx savings. And then OpEx just fluxes up and down, depending on ins and outs, and that's going to kind of match with what revenue does. Understood. Thank you very much. Thanks. Thank you. And your next question comes from the line of Dana Telsey from Telsey Advisory Group. Please go ahead. Good afternoon, everyone. If you take a look and break out Europe, how much of the product margin or the product sales, how much of it was Europe versus the RaaS business? And just can you expand a little bit on that budget versus premium consumer, what they were buying and how that changed from the prior quarter? Thank you. So I think generically, if you think about Europe, you know, the last time we talked about them publicly, they were around 20% of the total business. So you can assume that, but they're heavy weighted in Q4. So three quarters to date, they're probably, I don't know, 60% of their 20%. There are too many numbers there, but it's not. And then the US side is, I don't know, we're probably transitioned at the 80% mark. That's a lot of numbers. I can do the math behind the scenes and give you a different number, but I think you put it all together with that. Yeah, and Dana, on the customer segmentation piece, you know, we've not seen any real material change on the budget side. You know, we still think those customers are not spending at the same rates they were, you know, for our business, say, 12-18 months ago. So I think that transition to that slightly more premium customer has been very good for us. And I think that's reflected in the average selling prices that we've been able to drive, as well as kind of the margin and flow-through. So I think that strategy is really working and one we'll continue. And so, you know, I think you should see more of that as we get into 2024. I think as the budget shopper, as things get better in 2024 for that shopper, you could see them come back to the platform and even amplify active buyers, you know, even further than we're seeing them today. But we think that the current sweet spot that we're in around the customer mix and the product mix is the right one. Got it. And then you just mentioned about October being very promotional. So is that a change in cadence from what you saw in the Q3? And are you assuming a similar level of promotionality in the November and December time period? Yeah, I mean, with, you know, whether it's Amazon or Walmart or Target, like, I think October was, you know... What, what we were experiencing was, you know, pretty aggressive promotion across, across the retail space. And so we, we obviously responded to that, you know, through, through the month. And, and so it's a little unclear whether there's some normalization, you know, as you get into November and December. But I think our guidance reflects that we, we expect it to continue to be pretty bloody out there, and that our strategy needs to be commensurate with, with what some of those other guys are doing. But I think what we're really focused on, Dana, is maintaining that active buyer growth, because I think ultimately that's where, where the opportunity is as you get into 2024. We'd certainly rather have strong active buyer growth and incrementally weaker margins than the other way, because we think that's how you win over time. Hey, Dana, it's Sean. I did the math behind the scenes, so I could give you a better answer on that. It's about 60% of the products or owned goods comes from Europe, the revenue. Got it. Thank you. For Q3. Thanks. Thank you. Your next question comes from the line of Alexandra Steiger from Goldman Sachs. Please go ahead. Great, thank you so much for taking my questions. I do want to follow up on the buyer growth question. Could you maybe elaborate a little bit more on the new buyer composition, either by geo or demo? And how should we think about a normalized level of active buyer growth as we turn the page on 2023 and into 2024? And I know you talked a lot about, you know, how you're adjusting your inventory strategy to attract a more affluent buyer. What else could you do to get those customers, like, on the platform, maybe, you know, thinking about, you know, marketing or, or, like, something else? And then the second question is really around, you mentioned that you're seeing continued weakness at the lower end of your customer base. I'm wondering if, you know, if there's, like, some component of, you know, Asian-based e-commerce companies taking share? Thank you so much. Hey, Alexandra. Yeah, I mean, I think on the active buyer side, I mean, you know, I think, without stating the obvious, right, I mean, part of our growth strategy, you know, to Trevor's question earlier, if ultimately it's 20%+ gross profit growth or active-- or net revenue growth once we are through the consignment shift, you know, that has to be commensurate with, you know, similar high teens, you know, active buyer growth, and I think that's the direction that we're headed as we get through this period. And then obviously trying to get those active buyers to buy more. I think what's really important, if you think about us as a marketplace, is it's a little different than a traditional, you know, pure play, because you really do need to balance both supply and demand. And so part of why there's been a bit of a catch-up throughout the year on active buyer growth is we really need to make sure we have the sellers and the product mix and pricing in the right place. And so I think now we're syncing those up really nicely, which is, I think, driving, you know, pretty strong record, you know, record buyers. And so we... That same playbook that we have been honing in 2023, I think we'll use as we get into 2024. And again, it's just getting buyers and sellers to match. As for the lower-end weakness, I mean, I think that it's, we know, we know that there are some of our buyers that are shopping on Temu, the same reason we know they're shopping on Shein and Forever 21 before that, and all the fast fashion players, and, and so, and Wish, before that. So, you know, we have seen this, and I, I think, it's something that we have navigated for the better part of a decade, of fast fashion players, you know, coming in and coming out. Primark was another one, a few years ago. And so we've seen this, and I think our value proposition still resonates very strongly, you know, with, with, with, shoppers across the income spectrum. We don't spend a lot of time worrying about that budget shopper right now. Got it. Thank you. Thank you. And your next question comes from the line of Lauren Schenk from Morgan Stanley. Please go ahead. Hey, everybody. This is Nathan Feather on for Lauren. I guess, continuing on that thread and digging into your comments in the promotional environment, some other players within e-commerce have called out pretty quickly expanding ad rates due to competition from the Asia-based exporters. I guess, are you seeing that more on the marketing side than maybe the demand side? And if so, what steps are you taking to mitigate it? Sorry, Nate, you broke up first thing. Did you say ad rates? Is that what you said? Yeah, ad rates. Okay. Sorry, I heard bad rates, and then I had to, my brain had to go to work. Ad rates, okay. Yeah, look, I don't think we're seeing any real change on the ad rate side for us, given our targeting. You know, I think, again, that's a deep, deep discount shopper, and given that we no longer are really focused on that deep, deep discount buyer, we no longer actually need to have that product, you know, to delight that buyer. And so the ad strategy has evolved quite a bit. And so, I actually think we're in a better position and more insulated from some of that pressure because, you know, the Temu shopper or the Shein shopper, or the Forever 21 shopper, you know, they're really competing with the deepest discount prices, right? Those are folks at Walmart, that's Kohl's, right? Those are products that are $5, $6, $7, $10. I mean, the average price on ThredUp at this point is over $20. So it's a very different buyer mix, and I think it's important for people to recognize, you know, where ThredUp shifted up to meeting that, that more premium shopper. It's no longer the $5, $6, $7, $10 shopper. And I think that has been a very smart strategy for us over the past year, and one we'll continue to deploy into 2024. Very helpful. Thank you. Thank you. Mr. James Reinhart, there are no further questions at this time. Please proceed. Well, thank you, everyone, for joining us on our Q3 earnings call. I appreciate all the great questions, and thank you to the ThredUp team for all the hard work that you all do every day. And, we'll see you next time, and, have a great holiday season. Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may all disconnect. Everyone else has left the call. It looks like no one else is going to join us.