Good day, everyone, and welcome to today's ThredUp Q2 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Lauren Frasch, Head of Investor Relations. Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp's Second Quarter 2024 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 third and fourth fiscal quarters and full year of 2024, future financial performance, market demand, growth prospects, business strategies and plans, investments in AI technologies, the company's intention to exit the European market and to seek strategic alternatives for its European business, and our ability to cost-effectively attract new buyers. Words such as anticipate, believe, estimate, and expect, as well as similar expressions, are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, involve known and unknown risks and uncertainties, including our ability to effectively deploy new and evolving technologies, such as artificial intelligence and machine learning in our offerings. Our ability to identify and execute a strategic alternative for the company's European business and the effects of inflation, increased interest rates, changing consumer habits, climate change, and general global economic uncertainty. Our actual results could differ materially from any projections of future performance or results expressed or implied by such 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 IR website. Now I'd like to turn the call over to James Reinhart. Thanks, Lauren. Good afternoon, everyone. I'm James Reinhart, CEO and Co-founder of ThredUp. Thank you for joining our second quarter of 2024 earnings call. We're pleased to share ThredUp's financial results for Q2, and have significant news to share about how we expect our business to evolve in the back half of the year and into 2025. We will provide an update on growth, adjusted EBITDA margin expansion, expectations for free cash flow over the next year, and further developments in our new AI products as we launch them widely this month. I will then hand it over to Sean Sobers, our Chief Financial Officer, to talk through our second quarter of 2024 financials in more detail and provide our outlook for the third and fourth quarter of 2024. We'll close out today's call with a question and answer session. To get right to it, I want to start by acknowledging that the quarter, on a consolidated basis, was challenging for us. This was the case for three specific reasons, which I will explain in the order of impact. First, and by far most significantly, our European business really struggled. Second, we experimented in the U.S. with initiatives around new forms of customer acquisition and promotions, and they simply didn't perform the way we expected. Third, we are operating in an incrementally more challenging consumer environment, where the compounding effects of inflation continue to hurt our core customers. While Sean will walk you through all the detailed financials in a moment, I want to highlight that for the fourth quarter in a row, our U.S. business is growing gross profit, expanding margins, and is Adjusted EBITDA positive. In Europe, however, the business has continued to struggle, even as we invested over $20 million in cash in that business over the past six quarters. In Q2, our EU business contracted 18% while posting a -23% adjusted EBITDA, despite significant attention from our US team. The accelerated transition to consignment in the EU business has been challenging, particularly in the midst of a difficult consumer demand environment and persistent inflation. Despite bringing in new leadership, upon strategic review, we've determined that the Remix business needs a longer-term turnaround. As such, we've made the difficult decision to divest our European business and have commenced seeking strategic alternatives. I'd now like to turn your attention to U.S. performance. There are two areas I would like to make sure are very clearly understood. First, midway through Q1, we embarked on a plan for driving increased lifetime value from new customers by spending a bit less on marketing and changing our new customer offer structure and subsequent retention incentives. With the U.S. business cash flow positive and growing revenue per buyer, we attempted to test into a new customer growth strategy and to further increase the LTV to CAC ratio by exploring some bold changes. Unfortunately, after reducing spend to iterate and nearly 90 days of testing and observing retention metrics, we found ourselves to be worse off. The estimated impact of this was that we acquired 90,000 fewer customers, who then also will not materialize into repeat customers this year. We reverted back to our prior spend and offer strategy on June 1st and have seen immediate recovery in June and July. Second, let me turn to pricing and promotion. Since the middle of 2022, back when the consumer environment began to soften, we have been flexing prices and promotions to optimize for unit and contribution margin. Over that time period, we have made significant margin gains, with gross margins up nearly 800 basis points to roughly 80%, and contribution margins improving more than 1,000 basis points. Our unit economics have been as strong as ever, and we have made substantial progress towards our long-term margin profile. What we've been experimenting with in Q2 and into the early part of Q3, was to trade some of those unit economics for increased active buyer engagement, orders per customer, and sell-through. The results have been mixed. Orders and revenue per buyer reached all-time highs in Q2, running at more than $208 per active buyer in the U.S. Total item sales for the quarter reached an all-time high of more than 5 million pieces of clothing. The downside is that we did not see sufficient buyer incrementality, given what we believe is just a muted overall demand environment. In addition, revenue flowed through at reduced unit economics, and we believe we pulled forward summer demand from Q3 into Q2. To give you a sense of this, item sales in June were up 16% year-over-year, and June tends to be a weaker demand month in apparel. We learned important lessons in Q2 and early in Q3 around item targeting, promotions, and pricing elasticity that will guide our decision-making into the back half of the year and beyond. Unfortunately, these two initiatives, which we take full accountability for, will have a lingering impact the remainder of the year. But it's worth emphasizing that these were not things that, quote-unquote, "happened to us." Rather, we made choices with well-considered strategic considerations, and they just did not perform the way we expected. Many of our initiatives over the past couple of years have led to the steady growth and Adjusted EBITDA expansion you've seen in the U.S. But we're not perfect. We won't get it right every time, but we believe our body of work over the past couple of years demonstrates that we're getting it right a lot more than we're getting it wrong as we navigate a challenging macro environment. And that's a nice segue as I turn to our product launches this week. After months of testing, we are going live with our "Endless Expression" marketing campaign that launches our new AI shopping products to all customers. Our visual search functionality is now deployed across each of our platforms, bringing a much more robust shopping experience to every journey. Our Style Chat launch helps customers shop by inspiration and occasion in ways that are much more intuitive. For example, you could now shop for a Cape Cod fall wedding, or a Disney Bahamas cruise, or outfits for a New York City back to school like Ariana Grande. Customers are now only limited by their imagination and creativity. Our image search tool now lets you import any item into ThredUp's mobile experience and find quality, high-fidelity looks that match your style. Whether it's finding a look you love on Instagram, or TikTok, or Pinterest, or reading People or Vogue magazine, or seeing a cute mannequin dressed up in a store window, we now bring you all of this into a customizable, on-demand thrift experience. I want to emphasize, this is the most significant product launch we've had at ThredUp in a long time, arguably since we launched the company more than a decade ago. Much of the customer innovation from here will build on top of this foundational technology for merchandising, discovery, and inspiration. This technology can enable us to leap forward because we already have built a massive data advantage, world-class infrastructure, and a beloved brand. As I've said before, this isn't ThredUp plus some new AI experiences. This is a fundamental upgrade in how we're innovating on behalf of the customer. We believe that AI disproportionately benefits our business relative to other marketplaces and retailers, and as consumers become more accustomed to these types of products in their lives, we believe we will see significant upside in our business. Before I turn it over to Sean, I want to close with a few thoughts on how we see the back half of the year shaping up broadly and for ThredUp specifically. First, consistent with commentary from many of our peers, we expect the consumer environment to remain challenging until consumers begin to feel the benefits of ebbing inflation, lower interest rates, and ongoing job stability and wage gains. We agree with soft landing commentary for the broader economy, but remember, landings are not the same as takeoffs. We think it will take several quarters for consumers, especially our core customers, to feel the benefits of interest rates coming down and for overall sentiment to improve. We also remain cautious given the upcoming U.S. election cycle and recent financial indicators of a slowing economy and degradation in the jobs market. Second, after the volatility of the first half of the year with our March restructure, intention to divest our European business and to seek strategic alternatives for Remix, and the full-scale launch of a whole new set of product experiences built around generative AI, our approach is to remain cautious on investments in marketing, processing, and general operating expenditures. We will focus our efforts on improving our product experience, normalizing our unit economics, and driving process improvements in our DCs to lower our overall variable cost. We remain poised to accelerate all of our growth engines as conditions for discretionary apparel spending in the U.S. improve. Despite the ambition and optimism of every teammate in the halls at ThredUp, we just do not see a playing field in the second half that suggests we should or could be more aggressive. Third, as we refocus all of our efforts on the U.S., we expect our business to grow faster with structurally higher margins, Adjusted EBITDA, and free cash flow, despite having a lower top line. This might not come all at once, as I mentioned earlier, and we may remain temporarily at the mercy of economic forces outside of our control... But we believe the fundamentals of ThredUp's business will be more resilient, more predictable, more defensible as we move back to exclusively focusing on the U.S. opportunity. This laser-like focus should be a significant catalyst for us in the year ahead. I'll now turn it over to Sean to walk through the financials in more detail. Thanks, James. I'll begin with an overview of our results and follow up with guidance for the third and fourth quarters and full year of 2024. I will discuss non-GAAP results throughout my remarks. Our GAAP financials and a reconciliation between our GAAP and non-GAAP measures are found in our earnings release, supplemental financials, and our 10-Q filing. Before we get into the numbers, I want to start with an overview of how I view our business in the remainder of the year. Q2 was a challenge, in part due to the factors outside of our control in Europe and in part due to factors within our control in the U.S. We have our arms around both of these challenges. In the U.S., we expect the impact from the Q1 and Q2 missteps in our buyer acquisition strategy and promotional cadence that James described earlier, to linger throughout the balance of the year. But we are pleased to report that we have diagnosed the problem and are course-correcting. While our revenue growth in the second half will be weaker than we'd like as we absorb the negative impact of the strategy shift, as well as being up against 15% growth in the second half of 2023, we expect to be EBITDA positive. Europe has been a drag on our profitability and focus for several quarters, but we intend to exit the European market and expect to present U.S.-only operating results when we report our Q3 earnings. We will be able to direct our focus and resources to prioritize our U.S. operations without the burden of optimizing for consolidated results. We anticipate that this action will immediately increase our gross margins, improve our gross profit growth, get us to positive adjusted EBITDA, and accelerate our path to free cash flow. Though exiting the E.U. will incur some cash costs, our balance sheet remains healthy, and we do not anticipate our cash and marketable securities falling below $50 million before we reach free cash flow positive. Now on to our results. This quarter, I'll be reviewing the results of both our U.S. and European businesses. We are also providing historical U.S. active buyers, net revenue, and gross margins in our supplemental financials. As discussed, we were faced with a challenging Q2 in both the U.S. and Europe. For the second quarter of 2024, our revenue totaled $79.8 million, a decrease of 3.5% year-over-year. Additionally, active buyers were 1.7 million, while orders were 1.7 million, representing a 2.6% and a 6% decline, respectively. In Q2, Europe posted net revenue of $13 million, an 18% decline year-over-year. This was well below our expectation for the quarter. The macro environment in Europe has yet to inflect, while the transition to consignment proved to be more difficult to execute in a challenging consumer environment. In Q2, the U.S. achieved net revenue of $66.7 million, flat to last year, on 1.3 million active buyers, representing a 5.6% decline year-over-year. As James shared earlier, U.S. net revenue was challenged due to changes to our new buyer strategy that we implemented in mid Q1, causing us to miss out on acquiring approximately 90,000 buyers until we course-corrected in June. We estimate this was an approximate $3 million negative net impact to Q2. In addition, starting in mid-April and persisting into Q3, we've seen the promotional landscape intensify in the U.S., and consumers, pressured by compounding inflation, became incrementally more selective in their purchasing. For the second quarter of 2024, consolidated gross margin was 70.4%, a 300 basis point increase over the same quarter last year. The U.S. achieved gross margin of 78.8%, 240 basis points higher than last year, however, lower than our expectations. In addition to a highly competitive market, we leaned harder into promotions in an effort to achieve our consolidated outlook. As a result of both of these dynamics, we sold more units at lower prices, pressuring gross margin. The EU posted gross margins of 27.3%, a 250 basis point decline year-over-year, driven by higher unit costs and aggressive discounting. For the second quarter of 2024, GAAP net loss was $14 million, compared to GAAP net loss of $18.8 million in the same quarter last year. Adjusted EBITDA loss was $1.5 million or a - 1.9% of revenue for the second quarter of 2024. In the US, we generated $1.5 million of adjusted EBITDA in Q2, our 4th consecutive quarter of positive adjusted EBITDA after having generated $1.9 million in Q1. Europe was a $3 million drag on adjusted EBITDA in Q2 as their business meaningfully underperformed. Turning to the balance sheet, we began the second quarter with $67.9 million in cash and securities, and ended the quarter with $60.7 million, using $7.2 million in cash in Q2. Of that, $2.3 million was due to the EU's cash needs, $2 million was severance from our Q1 restructuring, $1.2 million was used in CapEx, and $1 million was the debt paydown. As we focus on the U.S. business, we do not expect this degree of cash consumption to continue. Regarding CapEx, we are maintaining our expectations of approximately $8 million for all of 2024. Reflecting on the first half of the year, it has certainly been a challenge, but we feel that we are starting off the second half on a stronger footing. We made some mistakes in the U.S., but we've diagnosed the problem and have pivoted our strategy. We are operating in a highly competitive environment, but are well positioned to flex our marketplace model. And finally, we are exploring strategic options for our EU business. We believe our stakeholders would be best served by focusing our attention and resources solely on our Adjusted EBITDA positive U.S. business. To reiterate, exiting the European market will immediately increase our gross margins, improve our gross profit growth, get us to a positive Adjusted EBITDA, and accelerate our path to free cash flow. Moving to our outlook, I would like to add some color to the comments James made earlier to provide additional context for guidance. At the moment, we are facing three distinct headwinds in the balance of the year. First, after changing our new buyer strategy in mid Q1, we believe we missed out on acquiring approximately 90,000 buyers until we changed course in June. Our buyers typically make multiple purchases annually. So not only did we miss out on the first purchase from those would-be buyers, but we feel the impact of this misstep in the remainder of the year when we also miss out on their repeat purchases. We estimate this dynamic to be several million dollar revenue headwind in the second half. Second, in Q2, we made the strategic decision to be more promotional in order to achieve our consolidated goals. Not only did this negatively impact our unit economics in Q2, but it also pulled forward lower quality revenue into June and higher quality revenue out of July. We estimate this to be a $5 million negative impact to Q3. Finally, our core customer is feeling the multi-year impact of compounding inflation. They are incrementally more discriminating in their purchasing, resulting in a highly competitive consumer discretionary environment. We expect this dynamic to persist in the balance of the year and could potentially worsen. In Q3 and Q4, we will continue to flex pricing in our marketplace model, but we will moderate promotions from our Q2 levels and largely return to preserving our healthy unit economics. With all of this in mind, I'd like to turn to our outlook, which will refer to our U.S. operations only. In the third quarter, we expect revenue in the range of $59 million-$61 million, representing a decline of 12% at the midpoint as we lap 17% growth in Q3 of last year. Gross margins in the range of 77.5%-79.5%, flat to last year at the midpoint. Adjusted EBITDA of -1% to +1% of revenue, flat to last year at the midpoint. Basic weighted average shares outstanding of approximately 113 million shares. In the fourth quarter, we expect revenue in the range of $57 million-$59 million, representing a decline of 6% at the midpoint as we lap 12% growth in Q4 of last year. As a reminder, Q4 is seasonally the smallest quarter in our U.S. business. Gross margins in the range of 77.5%-79.5%, representing margin expansion of 100 basis points at the midpoint. Positive adjusted EBITDA of 0%-2% of revenue, a $2 million decline year-over-year at the midpoint. Basic weighted average shares outstanding of approximately 115 million shares. For the full year of 2024 in the U.S., we now expect revenue in the range of $247 million-$251 million, representing a decline of 4% at the midpoint. Keep in mind that the EU business accounted for approximately $70 million of our previous full year outlook. Gross margins in the range of approximately 78.5%-79.5%, representing gross margin expansion of 220 basis points at the midpoint. Positive Adjusted EBITDA of 1%-2% of revenue, a $9 million improvement year-over-year at the midpoint. Basic weighted average shares outstanding are approximately 114 million shares. In closing, we're excited to renew our focus on our U.S. business. When completed, divesting our European operations will provide investors with greater transparency to the U.S. structurally higher gross margin, positive Adjusted EBITDA, and favorable free cash flow dynamics. We believe that focusing our talent, capital resources, and attention on our profitable U.S. business is the best strategy to expand our profits and accelerate our path to free cash flow. James and I are now ready for your questions. Operator, please open the line. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star two. Once more, for your questions, that is star and one. We'll take our first question from Ike Boruchow with Wells Fargo. Your line is open. Hey, guys. I guess I wanted to focus on the split of EU and, and U.S.. I guess first question's on Europe. Obviously, we know it's been a drag for a while. You guys have talked about it. Just maybe what specifically changed in the second quarter, and then maybe, James, could you just talk about the evolution of your thinking as you kind of came to the decision you guys did? Sure. Hey, Ike. Yeah, I mean, I think, you know, if you go back a year, we had been focused on, you know, investing in the product, technology, operations piece of the business. And then, you know, over the past several quarters have talked, you know, about the change in consignment, really focusing on that as a driver of gross profit expansion and growth. And you know, like, it's just it's taken longer to see that materialize the way that we had liked. And then we brought in Florin, who started in May, who, you know, I think we feel, you know, really great about. And he made it clear as he dug into the business, that it was gonna take even longer than I think we originally thought, and not just time, but capital. And, you know, I think we aligned with the idea that it that it was gonna require more degrees of flexibility for them to, you know, to turn around that business. And so I think we then decided that in order for them to really successfully, you know, get the business to a place that they wanted, that, you know, the U.S. was gonna be tough for the U.S. to support them. And so that became really the catalyzing event. And, you know, we think that business and the TAM opportunity in Europe is real. We just think it's gonna take longer. And so at this point, given the challenges, you know, globally, we think, you know, our capital and resources deployed, you know, fully on the U.S. is the best case scenario. You know, part of us also reflected back, you know, we put $20 million over the last six quarters into the EU. You know, what, what would that have looked like if we had put that $20 million into the U.S.? And I think, you know, we'd be in a better place, and so we didn't want to repeat that same mistake. Got it. And could you, sorry if I didn't follow, but on U.S. EBITDA, the self-inflicted issues you kind of talked about in the past, like, roughly how much was that in dollars to the U.S. EBITDA for this year? Hold on, hold on. I'm looking for it. I guess, as you look for it, Sean, I guess what I'm trying to look at is, so your U.S. business is basically $250 million with a 1-2 margin, but there's some headwind in that margin from this, this issue. I'm just trying to think about, as we try to shake this off and look into next year, like, what is, what is the run rate of the business, from a, a profitability perspective, as you're, you know, hopefully back to growth as well next year? Ike, your question is, is what's like the normal EBITDA run rate for the U.S. business or the impact of what happened this year in the U.S. business? I'm trying to get a- Well, I'm trying to good understanding. I'm trying to add back that self-inflicted issue to the positive 1-2 margin and think about how you guys think the U.S. You know, because now it's a U.S.-only business from here into next year. So, like, how should we think about U.S. profitability scaling as we think about the business moving into next year and beyond? Okay. Yeah, I mean, I'll jump in, Sean, and then, I mean, the way I like I think about it is, if you go back to, you know, exiting 2023, you know, the U.S. business was, you know, Q3, Q4, we were expanding, you know, Q4 exited at 4%. You know, in the full year in the US, I think we'll be, you know, in that 1%-2% range. And so, you know, our expectation is where we guided on a consolidated basis previously, you know, US standalone will be above that, you know, as we get into 2025. And so I think you can triangulate around above where the consolidated guide was, you know, previously, knowing that, you know, there might be some tumult in Q3 and Q4. Yeah, what I would say, and I'm... Ike, I'm just doing a little back-of-the-envelope math, right? Because I didn't have it here in front of me. But you could say it's around, of the $6 million that we kind of lost as it relates to the buyer strategy, related to those 90,000 buyers, it's probably around $2 million-ish in EBITDA for the full year. Got it. So you, you exited last year on a 4 margin. You've got a couple points from the headwind here that would kind of get you back. It, it, it kind of seems like, like a mid-single-digit U.S. margin is kind of what you'd strive for as you're kind of going into next year. Is that, is that fair? That sounds right. Yeah, I think that's fair. I think that's fair, yep. Okay. All right. Thanks, guys. We'll move next to Rick Patel with Raymond James. Your line is open. Oh, hey, thanks, guys, and good afternoon. I'm just trying to better understand the change that you made in mid-Q1 that had the negative impact in the second quarter. So can you maybe just walk us through an example of what changed that resulted in the negative impact, and I guess what changed again in the beginning of June that created the positive change in the direction? And then secondly, I was hoping you can tie in that commentary with what you're seeing with gross margins, because it sounded like you're maybe pulling back on promotions, and that's why you lost those 90,000 customers. But at the same time, your gross margins came in a little bit lighter than you wanted to because of the discounting. I feel like I'm not fully understanding what happened. Sure. Why don't I talk about the acquisition piece, and then I can talk, I can kick it over to Sean? So, yeah, I mean, Rick, the way to think about it is we were, we were flexing the, you know, percent off, you know, your first order. And then, you know, we have a traditional onboarding path where you may get incremental credits or loyalty points for, you know, second order, third order, or 4th order. And so we had moved to, more of a flat dollar-based, credit system. And so, you know, for example, instead of 30% or 40% off your first order to induce trial, we were flexing, is it $10? Is it $20? Is it $30 off an order of $100 or more? So we were you know really iterating around that type of strategy. And what we found is that there was nothing that we could do from a dollars off your first order or incentives across multiple orders that was better than just the straight percent off order with free shipping. And so but we didn't. We needed 90 days to really see how those LTVs played out. And once we felt confident that we were worse off, we reverted back to you know where we had been previously and where we had been for the prior year on June 1. So that was it was the offer structure and then the incentive structure. Rick, on the gross margin piece, I think in the beginning, I think you have it right. During that, new customer acquisition period, gross margins were probably a little more favorable on our side. But as we started to end the quarter, we got much more promotional and started to really give opportunities to discount back to the new customers as well as our existing purchasers, and that more than offset the benefit of having the gross margin favorability that we had in the first part of Q2. And that's why you see the kind of mix in the 78.8% gross margin in the U.S. versus the 80. This is what we've seen in Q1. Okay, that's really helpful. And, and secondly, can you just zoom out and maybe just talk about, consumer behavior on the platform? You know, any incremental data that trade down may be getting worse than expected or, or maybe the, the kinds of consumers that you might be, acquiring, like higher end versus lower end, any, any kind of changes in the trend line from the prior quarters? Sure. I mean, I think the biggest thing, Rick, is that you're just seeing that the consumer, and especially as we move through the quarter, they were just more discerning, right? And so you had, you know, discounts needed to be incrementally higher, you know, to that budget shopper. I think the standard premium shopper, you know, our, our highly engaged buyer, I think they performed, you know, as, as well as ever. But that real, budget shopper, you know, call it making $50,000-$60,000 a year, you really needed to have compelling offers, to convert them. You know, just to, like, give you an example, you know, discounts had to be, you know, about 20% higher, Rick, for, for that budget shopper, relative to where they were a year ago, to sort of move them off the couch and, and to make a purchase. We've been navigating that, now for a few months, and we feel good about sort of the plan into the back half of the year, but it's really that segment of buyers that's, that struggled. I appreciate it. Thanks very much. We'll move next to Dylan Carden with William Blair. Your line is open. Okay, thanks. I'm curious to why the change was made in customer acquisition. You know, yeah, let's just start there. Yeah, I mean, Dylan, as I said, I think the business. We were feeling pretty good, you know, at the beginning of the year. You know, the U.S. business, free cash flow positive, you know, growing. I think we felt some sense of optimism that the year would, you know, materialize better, and I think we had been in a very... You know, we had not really messed with the new customer offer in some time. And so what we were looking for was there something that we could do that would yield, you know, more new customers, wider TAMs, you know, better LTVs over time? And so we were really looking for a new mountaintop. You know, I think it's very easy as an organization to keep doing what you're doing across your marketing mix and across your offer mix. We were looking for something that potentially could have put us in a much better place. So, that was the intent, and I think, you know, in retrospect, we probably could have done it in certain areas differently. But, you know, that was the path we chose, and, you know, we got it wrong, and we own that, and we fixed it, and we're moving forward. So it wasn't in response to some sort of competitive change, dynamic change in the market? No, I think we were just looking for. You know, at this point, we were looking for new sources of, you know, of growth, and lifetime value. And, you know, could we shift the type of buyer that we were looking for? Could we shift the channel from where those buyers came from? And, you know, it didn't materialize the way we would like. And we think a lot of it had to do we think one was the offer, but also just into a demand environment that we thought, that we think was weakening. You just, you were worse off. Now, with sort of what we're left with on the guide, there's a lot of moving pieces here. If you kind of strip away the last 90,000 buyers, what's the incrementality on kind of the macro overhang? You know, I mean, I was of the impression, I think you can go back to last call, that sort of you were de-risked on the macro front in the prior guide. Is there sort of incremental behavior that you're seeing that kind of takes you another leg down here, or is it really just the kind of own goal or own yeah, that you're sort of speaking to here? Well, I think Sean can give you kind of the bridge, but Dylan, yeah, I mean, I think, I mean, consistent with, I think, the commentary from a lot of our peers in consumer, you know, I think the buyer, the consumer is more challenged now than they were 90 days ago, right? I think that whether it's Starbucks or McDonald's, right, you know, across the board, there's some consumer companies that are struggling. And so I think maybe you think the world has gotten a little bit worse, right, from where we were 90 days ago, and certainly at the beginning of the year. Got it. Sean, do you want to bridge the revenue piece for Dylan? Yeah, yeah, Dylan. So if you think about, like, our last guide to this guide, it's about - it's down. At the midpoint, it's about $33 million on an annual basis. You know, that's - it's pretty simple. It's $19 million of it's straight up Europe, and so I think we've talked about that, and you guys know what we're doing there. And then the remaining $14 million is the U.S.. About $6 million is really that active buyer strategy change that we made and then made back, and then the remaining is about $8 million, which is really macro impact. Perfect. Great. I'll leave it there. Thank you. We'll move next to Dana Telsey with The Telsey Group. Your line is open. Hi, good afternoon. James, as you talked about the increase of 20% of a discount or promo in order to get people to spend, what was it for besides the value customers? What did it look like for just your other regular core customers? What are you seeing in terms of Clean Out Bags, in terms of what you're getting? And how do the distribution centers, with this lower volume, how do you think of the capacity and the expense structure going forward? Yeah, I mean, Dana, it's interesting. I mean, I would not say that there's lower volume by any means. You know, in Q2, we sold more clothing than we've ever had ever in our history, right? So there is a lot of volume. I think what we've just found is that for those products that, you know, if you think about the average selling price on ThredUp being, you know, between $20 and $25, we were just having to mark down our lower priced product even further, Dana, for customers to convert. And so, the sort of pernicious part of it all is that you're having to discount more, right? And even that then that budget shopper is not converting at the same rate. We just think that there's a segment of customers who it's not that they potentially are trading down, it's that they are trading out. We think that they are, you know, they're really struggling. I don't think our cost structure, you know, the variable costs in our DCs or the fixed costs is any kind of overhang. You know, I think the biggest challenge was sort of the weakness in Europe in Q2, and then some of these strategic changes that we made, the acquisition in Q1 and then the promotions in Q2. Got it. Thank you. It does appear that there are no further questions at this time. I would now like to turn it back to the company for any additional or closing remarks. Well, thank you, everyone, for joining. Thank you to the teammates throughout the ThredUp organization and our folks overseas in Europe. We appreciate all the things that you have done and are working on and are very excited for the product work ahead of us. We do make mistakes, but we also have a firm understanding of where we're headed, and so look forward to seeing you at our next call. This does conclude today's program. Thank you for your participation. You have been removed from the call. Goodbye. Have a wonderful afternoon.