Good afternoon, ladies and gentlemen, and welcome to the ThredUp Q2 2025 Earnings Call. At this time, all lines are in 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 August 4, 2025. I would now like to turn the conference over to Ms. Lauren Frasch. Thank you. Please go ahead. Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp 's second quarter 2025 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. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our earnings release, supplemental financial information, and our Forms 10-K and 10-Q for more information on these expectations, assumptions, and related risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures. The reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and the supplemental financial information, which are distributed and available to the public through our investor relations website located at ir.thredup.com. Now, I'd like to turn the call over to James. Good afternoon, everyone. I'm James Reinhart, CEO and Co-founder of ThredUp. Thank you for joining our second quarter of 2025 earnings call. Today, we'll discuss financial results for Q2 and update our expectations for Q3, Q4, and fiscal year 2025. I will provide an update on our thinking about the macro environment, discuss ongoing innovation in our AI-driven product experiences, and end with a refresher on our compounding competitive advantages in the growing resale market. I'll then hand it over to Sean Sobers, our Chief Financial Officer, to talk through our financials in more detail. As always, we'll close out today's call with a question-and-answer session. First, to the results. The second quarter was strong. Revenue growth accelerated to 16.4% year-over-year, gross margin landed at 79.5%, and adjusted EBITDA was 3.9%, all of which exceeded our own internal expectations. These results were driven by the underlying fundamentals of strong customer growth and orders in our business. We acquired more new customers in the second quarter than at any other time in our history, with new buyer acquisition up 74% year-over-year. Active buyers were up 17% year-over-year, and orders were up 21% year-over-year. Again, our approach in 2025 is simple: maintain our gross margin and bottom-line efficiency and reinvest incremental dollars we generate back into growing new buyers and sellers in our marketplace. We are continuing to do this with success in the third quarter and believe this approach creates the greatest long-term shareholder value. Turning to the macro, we talked about the impact of tariffs at some length on our last call. Let me reiterate a few points that remain relevant. First, and by far the most impactful to ThredUp, is the closure of the de minimis loophole. Though the full impact is still uncertain, we believe the closure of the de minimis exemption is likely to cause higher prices for ultra-fast fashion goods and to reduce production volumes, both of which could continue to be positives for ThredUp. Second, the increase in the price of new apparel that may result from broad-baked tariffs could enhance the comparative value proposition for consumers who are shopping for value on ThredUp. Third, ad markets remain dynamic. As we predicted, the short-term gains we experienced from companies like Shein and Temu aggressively pulling back lasted from mid-April to mid-May before they began spending again. Regardless of how advertising rates trend, we're continuing to see efficiency throughout our funnel, driven by improvements in the ThredUp experience. Let's turn to that. We are now more than 18 months into our AI-led product journey, and positive results continue to compound. It's not as though any one feature is driving the outcome, but rather the whole set of ways that shoppers can now engage on ThredUp is improving. While we've shared some of the individual feature results previously, including visual search, style chat, image search, shop similar, I thought it might be useful to review how the aggregate nature of these improvements is rolling up to create better business fundamentals. Visitor sign-up rates on ThredUp are up 30% year-over-year, and sign-up to purchase rate is up 60%. Combined, this is an 18% improvement in how visitors turn into ThredUp customers. Typically, when you accelerate marketing spend as we have and drive more traffic, you get degradation in the funnel. The work we've done has created the opposite outcome. This is the flywheel we will continue to lean into. We continue to invest in new ways to leverage AI technology in the product experience. This quarter, we debuted our first AI-generated images on roughly 100,000 individual product pages that showed how an item might look on a model. What fashion brands who make products can do easily, but we can't given our massive assortment of secondhand SKUs. The results were fascinating. For existing heavy ThredUp buyers, AI model images had modest conversion impact. For those new to shopping secondhand, it was a big deal. Customer satisfaction of AI model photos went on par with our very best features. We think this is because this is the way the new customers are used to shopping elsewhere. We have taken this feedback and are retooling how the images are created and displayed at further scale and expect to be back in market in the coming quarters. This is in service of our goal to make the experience of shopping secondhand virtually indistinguishable from shopping new products. Our social commerce work continues to delight customers with easy ways to shop their inspiration from Instagram and other social media. Our new feature is live on the ThredUp iOS app, and we expect to roll out to more platforms later this year. We believe that enabling customers to seamlessly shop their style inspiration from influencers and creators is a meaningful opportunity for us to drive social proof and capture wild share. We plan to continue to invest in engineering, design, and data science resources over multiple cycles to nail this experience all the way through the product funnel. Turning to the seller side of our marketplace, we continue to make substantial improvements across the seller experience with our ambition to make ThredUp the default place to sell secondhand clothing online. Given the top-line growth in Q2 and the expectations for Q3, it will come as no surprise that we set all-time records in requests, receipts, and clean-out kits processed. Our strategy involves expanding the number of ways customers can sell and the frequency with which they sell on ThredUp. Premium service kits with service fees up to $34.99 continue to grow as a mix of kits received, growing 44% quarter- over- quarter. We are particularly excited by the mix of new sellers joining ThredUp as premium service customers. Roughly a quarter of premium kits are coming from sellers who have never previously sold on ThredUp. Earlier this year, we launched the ability to resell items when you were returning a product you bought on ThredUp, and that volume has increased more than 4x quarter- over- quarter, despite no measurable increase in our overall buyer return rates. We are leveraging our return supply chain to lower selling costs, but more importantly, making it easier for buyers to become sellers on ThredUp. Let me provide a brief update on Resale-as-a-Service, or RAS. Our change to an open-source model in our RAS strategy is in the earliest stages, and we are seeing promising engagement from brands. We have renewed conversations with more than 60 apparel brands after the announcement of our new strategy. Again, we believe value for this ecosystem is created in the operations and technology layer to ingest secondhand items at scale and make them available for resale as efficiently as possible. Over the long term, as brand resale becomes more prevalent in the industry, we believe this ecosystem will benefit from a powerful, affordable, "universal recommerce" layer, akin to what Amazon Web Services has done for cloud or Shopify has done for small business. This can then enable any brand to do everything they need across the resale ecosystem. We will have more to share in the coming quarters as we launch new brands under this model. Before I turn it over to Sean, I want to reiterate three important competitive advantages in our model that are working together to drive the positive momentum you're seeing today. First, the operational infrastructure and supply chain that we have invested in over many years is working as well as ever. We've invested over $400 million in infrastructure, software, and data to invent how a managed marketplace can work at scale. From the humble clean-out kit to advanced photography technology, from inbound automation of item identification and measurements to the outbound carousel automation for shipping out unique apparel SKUs tens of thousands of times a day, our tailored, purpose-built supply chain is unique, and we believe that replicating our success would take many years, significant capital investment, and the creation of a great deal of new intellectual property. Second, the technology investments we've made over many years to build a proprietary resale database and data expertise have enabled us to take advantage of the leaps in AI technology you're seeing today. It is precisely the hundreds of millions of pieces of clothing that we've processed and the vast stores of data about those items that have helped us leverage AI so quickly and expertly to sell more items at better margins. Third, as we all know, marketplaces are hard to build and sustain, but when you get the flywheels going, they are very hard to stop. Our innovations on the buyer and seller sides are helping us delight both sets of customers, expanding the addressable opportunity while deepening engagement and capturing wallet share. I have said multiple times that ThredUp's marketplace should uniquely benefit from advances in AI, and I believe we are seeing that come to fruition so far this year. As a parting thought, if you zoom out and ask how to compete with ThredUp over time, we think you will run into a lot more questions than answers. What will it cost to acquire millions of secondhand buyers and sellers? How will you acquire, process, and fulfill the broadest selection of quality secondhand apparel anywhere? Can you price the apparel attractively while maintaining healthy and sustainable unit economics, a feat only possible through advanced automation infrastructure? Will you be able to compete with a well-known and trusted brand backed by superior technology infrastructure and a decade-plus head start? These are hard questions to answer, especially while ThredUp is accelerating. In sum, we believe the conditions for our future success are very bright, and we are going to be relentless in executing our playbook. With that, I'll turn it over to Sean to talk to the financials in more detail. Thanks, James. I'll begin with an overview of our results and follow up with guidance for the third quarter, fourth quarter, and full year 2025. 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. We are extremely proud of our Q2 results, in which we accelerated revenue growth, exceeded our adjusted EBITDA expectations, and generated cash. For the second quarter of 2025, revenue totaled $77.7 million and increased to 16.4% year-over-year. Our outperformance was driven by significant investments into marketing and inbound processing in order to drive our marketplace flywheel. These investments resulted in our second consecutive record quarter of new buyer acquisition, with new buyers up 74% year-over-year. We finished the quarter with 1.5 million active buyers for the trailing 12 months, up 16.5% over last year, while orders were up 20.8% to 1.5 million. For the second quarter of 2025, gross margin was 79.5%, a 70 basis point increase versus the same quarter last year, as a result of higher average selling prices due to the rapid growth in our premium supply. This dynamic was slightly offset by new buyer growth, as new buyers require higher incentives to convert on their first purchase. The adjusted EBITDA was $3 million, or 3.9% of revenue for the second quarter of 2025. We doubled our adjusted EBITDA dollars versus last year, representing a 170 basis point margin improvement as we leveraged our multi-year investments and benefited from our revenue outperformance. As our momentum accelerated through May, we were unable to hire fast enough in our processing operations, driving our EBITDA beat. As we've entered Q3 with encouraging momentum, we are spending on marketing and inbound processing earlier in the quarter, which I will further discuss later. Turning to the balance sheet, we began the second quarter with $55.4 million in cash and securities and ended the quarter with $56.2 million, generating $800,000 in cash. We spent $3.3 million on CapEx in Q2 and continue to expect maintenance CapEx levels of approximately $8 million in 2025. Now I'd like to provide a bit of context for our updated guidance, which should sound similar to last quarter. We delivered a significant revenue beat in the second quarter, and we are flowing that through to the full year revenue outlook. Though we remain cautious on the current consumer environment, we are pleased to be raising our top-line expectations for the balance of the year to align with the positive trends we are currently seeing in the business. We also delivered a strong beat on Q2 adjusted EBITDA, which we are flowing through to our raised year guide. With contribution margins in the low 40% range and healthy CACs driven by AI improvements in our customer experience and marketing tactics, we see continued opportunity to invest in marketing and inbound processing. As we have increasing confidence in our quarter-to-date momentum, we are making these investments earlier in the quarter. We expect this timing to drive demand throughout the quarter and beyond and more effectively enable us to flow our incremental EBITDA dollars back into our growth drivers. Therefore, we are maintaining our profitability expectations for the remainder of the year as we continue to focus on driving growth and generating cash. With all this in mind, in the third quarter, we now expect revenue in the range of $76 million- $78 million, representing 25% year-over-year growth at the midpoint. Gross margin in the range of 77%- 79%. Adjusted EBITDA of approximately 4.5% of revenue, in line with our previous expectation, and basic weighted average shares outstanding of approximately 125 million shares. In the fourth quarter, we expect revenue in the range of $73 million- $75 million, representing 10% year-over-year growth at the midpoint. The sequential step-down reflects the seasonal slowdown in resale around the holidays. Gross margin in the range of 77%- 79%. Adjusted EBITDA of approximately 3% of revenue, in line with our previous expectations, and basic weighted average shares outstanding of approximately 129 million shares. For the full year of 2025, we now expect revenue in the range of $298 million- $302 million, reflecting 15% year-over-year growth at the midpoint. This updated view is $14 million above our previous guidance, incorporating our Q2 beat and our raised outlook for the remainder of the year. We are narrowing our gross margin range to 78%- 79%. Adjusted EBITDA of approximately 4.2% of revenue. This reflects our Q2 beat, while we are holding our assumptions for the remainder of the year to be broadly similar to our previous outlook, and basic weighted average shares outstanding of approximately 123 million shares. In closing, we are extremely proud of our Q2 performance. We accelerated revenue growth, generated cash, and we remain focused on doing the same in Q3. The momentum we're seeing in the business provides us with increased confidence in our ability to deliver on our goals. James and I are now ready for 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 four by the one on your telephone keypad. You will hear a prompt that your hand has been raised, and should you wish to cancel your request, please press star four by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Ike Boruchow from Wells Fargo. Please go ahead. Hey, everyone. Let me give my congrats. Excuse me. I guess a couple quick ones. First for James, and then I have a follow-up for Sean. James, maybe just at a high level, just more detail on what drove this kind of Q2 revenue outperformance and the new buyers. The business has inflected so strongly, and it seems like it's happened pretty fast. I'm just kind of curious the underlying what you think was the biggest driver there, because there's so many different things you guys are doing right now to improve the business. I'm curious if you could kind of like level set that or rank order those for us. Yeah, sure. Yeah, I mean, I think, you know, rank ordering is difficult. What I would say, though, is that we've really got this flywheel working of improved product experience. You know, sort of put some numbers in the prepared remarks around this, around conversion rate, you know, across the product experience. Our new buyer acquisition continues to be strong, really driven by product. When you combine that with strong operations processing and high-quality supply, what you get is this trifecta of great supply, great product experience, and efficient acquisition. What we're seeing is that as those things continue to get better and better, we're able to then deploy more dollars into the growth flywheel. I think that's what's driving sort of, you know, momentum in the business. Yeah, it feels great to be able to see the model really working and to feel like the marketplace is really humming on all cylinders. I assume you don't want to get into the monthly cadence or anything, but just to see the 16% growth in Q2 and you're guiding to 25% in the third quarter, is the business just sequentially building every month? Has that been going on for a while? I'm just curious if you could help us understand what's going on under the covers. Yeah, I mean, we're definitely seeing the new buyers that we are acquiring, starting back in Q4 of last year, right? That momentum continued into Q1, and I think into Q2. We're seeing it the first month of Q3. Certainly you're getting that acceleration. If you get a normal seasonal slowdown in Q4, I think as you all know, right, that when you're driving that many new buyers into the business, as long as you're maintaining strong engagement rates and retention rates, that really does start to compound. We're seeing that in the numbers for Q3 and Q4. Great. This is the last one, maybe for Sean, I'm not sure if it's for Sean or for you, James, but to drop to 10% in the fourth quarter seems very conservative. Maybe just talk about the guardrails you're putting on that because I mean, like how many active buyers are you sending drop-off? I assume there's a good amount to get the rev to go from 25% to 10%. I'm just kind of curious if the guardrails you're putting around the fourth quarter. Thanks. Yeah, I can jump in because we've been talking about the quarterly cadence. Really for Q4, remember that it is a seasonal downshift in resale, right? That has been true for more than a decade. You see a sequential step-down from Q3 to Q4. I think one is the seasonal piece. The second is that we do tend to see marketing rates go up in Q4, and we tend to pull back a little bit on our own investments just to maintain our paybacks and CAC, LTV-to-CAC strategy. We do a little bit of that ourselves. The third is, to be honest, I think Sean and I are a little uncertain on the macro. Jobs numbers are weak, housing market's weak. I think it's probably smart to be a little conservative around exactly how Q4 is going to play out at this point. Obviously, when we get to properly reporting Q3 and guiding Q4 in November, we'll have more to share. We think that's a more prudent course. Makes sense. Thanks. Thank you. Your next question comes from the line of Dylan Carden from William Blair. Please go ahead. Thank you. On the gross margin side of things, you know, typically I think there's sort of an inverse relationship between new customers and gross margin, yet you were able to sort of set records in both this quarter. Just curious the dynamics there. You're kind of keeping the wide range going forward, kind of the puts and takes on that. Maybe it's a related question, but you had sort of mentioned some timing on costs as it relates to some of the upside in earnings in the second quarter. Can you just provide maybe some more details as to what those were and how that rolls through third and fourth quarter? Thanks. This is Sean. I think on the gross margin outperformance in Q2, we saw the premium supply piece continue to grow and really drive ASPs. As you look towards the back half of the year, you see gross margin kind of kick down a little bit. We still expect premium supply to be there, but we really want to focus on the customer experience as we've added all these new customers in the first half of the year. By that, I mean we're going to focus on things like pick, pack, and ship, which is stuff that rolls into COGS and impacts gross margins to give a better overall customer experience just to drive it home and really allow those new customers to become second-time purchasers, or third-time purchasers, or fourth-time purchasers. Got it. You know, we don't spend a lot of time typically talking about supply. We're kind of talking about it here on this call. I'm just curious, as you see the business accelerate, it sounds like you're kind of keeping pace from a supply standpoint and the processing times, keeping those in check. Yeah, Dylan. Hey, it's James. Yeah, I mean, we continue to see record requests, receipts processed on the supply side. We're really focused on innovating in the supply chain. We really want to make ThredUp the default place to sell online and make it as easy as possible for anyone to get engaged. I think premium has done a very good job of capturing that more premium seller. We obviously have our donation program for our customers who are really just doing a non-financially motivated clean-out and really trying to capture that whole market, Dylan. It's worked so well so far year to date. I think we're going to continue to innovate there as we get into the back half of the year. Excellent. Thank you very much. Nice job. Thanks. Thank you. Your next question comes from the line of Dana Telsey from Telsey Group. Please go ahead. Hi. Congratulations, everyone. As you think about this inflow of new buyers, what are the demographics of those new buyers? How are you seeing them different or the same from your core? Is part of this due to the closure of the de minimis? What are the category trends? Did they differ at all from first quarter to second quarter? I have a follow-up. Hey, Dana. It's James. On the new demographic side, there's nothing materially different about this customer compared to prior customers. I think our point of view is that the addressable market for female secondhand shoppers in the U.S. is pretty large. I think we're now just getting back into, once we divested Europe, really aggressively growing our share in that market. The customers really do look like previous best-case ThredUp customers, so we feel good about that. I think from a trend perspective, Q1 into Q2, we really did see continued explosion in the number of dresses that we were selling into springtime and into summer. That continues to be a winning category for us, and we think opportunity to take even further share as we move through the year. Got it. On the marketing spend, can you talk a little bit about the cadence of marketing spend, how much difference there is quarter by quarter now? On the RAS with the change to the open-source model, any further expansion of RAS and its implications? Thank you. Yeah, I think on the marketing side, other than the seasonal shift in downshifting Q4, when ad rates get really competitive around the holidays, otherwise, we're really targeting somewhere in the high teens to 20% of revenue on marketing. We're really in growth and acceleration of growth mode, and that has been pretty consistent. As a reminder, Dana, we're really focused on this LTV-to-CAC ratio being under one, such that we're paying back under a year. We've been really relentless on that. If we can acquire more customers under that construct, we'll try and lean in. That's what we've been trying to do year to date. I think that's what you're starting to see, some of that momentum build on the marketing spend. Then sorry, your second part was around? RAS, the open-source model. Yeah, I think we're just a few months into the new strategy, but I think it is really starting to resonate with the apparel brands that we're talking to. More than 60 brands are now back engaged in conversations. The idea really is that ThredUp is the real scalable partner in town that can help them meet their goals either on take-back programs and building sustainability and circularity into their brand, as well as helping them position an assortment of secondhand goods that's expansive in quality and meet the bids for their customers. We feel great about the strategy. I think it's summer, as you know, and it will take a little while for us to ink some of these deals, but I think we're feeling good about the strategy shift. Thank you. Thank you. Your next question comes from the line of Bobby Brooks from Northland Capital Markets. Please go ahead. Hey, good afternoon, guys. Congrats on the great quarter. On the 1Q call, you guys had discussed that each incremental dollar above your 4% guide would be reinvested into marketing, and it kind of dovetails. That also dovetails with what was said earlier in this call. I'm just trying to understand what's underpinning the 3Q guide of 4.5%. I know the 4Q guide is for 3%, so maybe it's just as simple as on a full-year basis, you'll be at that 4% threshold, but I was just hoping for a little bit more color there. Yeah, it's just due to the kind of the seasonality of Q4's revenue versus Q3. I think the full-year guide takes into account the beats for Q1 and Q2, getting you to the 4.2%. Okay, it's just that's really just kind of a staking in the first half beats, but anything more on like the 3Q? It seems like you guys are investing more heavily up front. I just kind of am surprised that you'd be above that 4% threshold. Yeah, I mean, I think we are continuing to invest in marketing, but we also have sort of committed to, you know, modest, you know, EBITDA expansion, you know, over the course of the year. We certainly want to be able to deliver to investors clarity around the business generating free cash flow, the business having a strong, you know, margin profile that we can control. I think what you're seeing in Q3 and the rest of the year is, you know, the growth is strong, and we wanted to, you know, make sure that it was clear we were dropping some of those dollars to the bottom line consistent with what we said earlier in the year. To emphasize that we're really, we're really sort of growth-oriented at the moment. I think we've been trying to focus on let's not consume any capital, let's generate cash, let's maintain, you know, our gross margin efficiency, our EBITDA efficiency, and then really grow as fast as we can. You know, that's how the numbers shake out. That's very helpful color. The next one was, I was just curious to hear a bit more about the supply dynamics and kind of the makeup of what you guys are seeing. Obviously, you guys have three or five different bandwidths on payouts between $5 and $20, $20 and $50, $50 and $100, and so on, with your take rate moving lower as the pricing, the sale price moves up each band. Could you just give us some sense of how much of your business falls under each category? Yeah, we don't disclose necessarily what comes into each band, but I will say that, you know, as we talked about the growth in premium, right, which has been growing strong, those products tend to be at those higher payout amounts, right, as you mentioned. The thing to understand is while the rates might be different, the dollars flowing through are strong, right? We can take those dollars and invest them, you know, or invest them back in the business. I think what we feel like is that the consignment premium piece, not only is it great for sellers, we think it's a very, you know, out-of-the-gate strong product-market fit, but it really does help drive buyer acquisition. Buyers are there to find great products, great value, and that premium supply is a part of that. We really focus the rates based on, you know, maximizing the opportunity for the buyer and the seller and ThredUp all at the same time. Got it. Just one last one for me is just obviously your business has clear benefits from the network effect, and those are really starting to take hold. Could you just discuss, and taking into account that you just posted your best quarter in customer acquisitions, could you just maybe discuss the balance between what you're seeing in new people coming to the platform as new suppliers versus people coming to the platform as first-time customers and just kind of the mix of that, or maybe long-term customers becoming suppliers or long-term customers becoming or long-term suppliers becoming customer and vice versa? Just kind of curious to hear about those trends. Yeah, I think what you're seeing is, look, we've been saying for some time that I think you have to really think about ThredUp as a marketplace where you're really trying to add the right number of buyers and the right number of sellers in to get the market clearing dynamics to work. You obviously want it to be highly liquid. I think what you're seeing now is such strong buyer growth in the business, and our operational infrastructure has never been stronger. We're able to feed that buyer mix with high-quality supply. The guardrails as far as buyer growth and seller growth are off, where I think we're acquiring lots of new sellers. The sellers are becoming buyers. As I mentioned, lots of buyers that are coming in, they're now getting complimentary clean-out kits in their orders, and they're becoming sellers. I think you're really starting to see that crossover happen between buyers and sellers. I think that's what builds a really healthy network effect through the marketplace. Very well said. Appreciate the time. I'll return to the queue. Thank you. Your next question comes from the line of Bernie McTernan from Needham & Company. Please go ahead. Great. Thanks for taking the questions. Just wanted to start on new buyers, obviously really strong results during the quarter. I just wanted to get a sense in terms of like, it seems like there was less competition for new buyers in the first half of the quarter, and then there was more competition in the second half. How did that play into the new buyer growth and what's contemplated for the guide in 3Q and 4Q? Yeah, hey Bernie, it's James. As we mentioned in the last call, April was strong. You did see Temu and Shein and a few others sort of pull back a little bit, but they kind of came back into the market in mid-May. A lot of the performance throughout the quarter, the last couple of months of the quarter, was really driven by the team doing a wonderful job on the growth side, the product experience continuing to get better. We've continued to see strong momentum into July. I think a lot of the back half of the year, we expect to see more of the same. It will remain to be seen how some of these guys play. I know Amazon has made some changes into how they're spending on Google Shopping. The Trump administration just rolled out de minimis exemption is now not just for Chinese goods, but for all goods coming into the U.S. That will have some dynamics around who's buying ads in the ad rate. I think it's a pretty dynamic environment, but I'm pretty confident that regardless of the macro trends there, we're going to be able to spend and acquire customers at real predictable and strong rates. Okay. No, that's great. Thank you. I just want to also touch on RAS. Obviously, you mentioned conversations with over 60 brands. What are some, and acknowledging that, but other than that, what are some of the bottlenecks for getting those brands over the finish line? Like how many new brand partnerships will we get to see for it to be a material impact on your supply? Yeah, I mean, I think it depends on the brand, Bernie. I think for some large brands that they can be impactful right away. From a timing perspective, some of these brands are currently in contracts with others. Some of them are trying to navigate the tariff news and how that's impacting what they're doing. The launch of Resale-as-a-Service brands has never been something that just happens overnight. It does take a little bit of time, but I do think you're going to see some momentum by year-end. Whether that's material, I think remains to be seen. I don't expect it to be material in 2025, but I'm optimistic that it will have a real impact in 2026. Understood. Thanks, James. Thank you. Your next question comes from the line of Oliver Chen from TD Cowen. Please go ahead. Hi, James and Sean. The AI acceleration has been really, really nice. What do you think the hardest parts of that AI journey have been? As you rank order the financial impact, it sounds like customer acquisition is the highest impact, but how would you rank order the model impact as you see it? The next question is on the new buyer growth rates. What are your thoughts on how that number, like what kind of long-term growth rates might we expect there? It's been extraordinary, but the related question is like one and done or the nature of the new customers relative to existing. Thank you. Hey, Oliver. Good to hear you. I think on the first one, the hardest part of AI for us is given the breadth of the catalog, right? 4.5+ million SKUs changing every day is really nailing product recommendations and filtering using the technology. Even just in the last few weeks, we've been rolling out improvements into how customers are getting the right sorts of product, the items that, you know, they should shop with these other items. I think the hardest thing is really getting the models to work as well as we know they theoretically can, which I think is really exciting because, you know, similar to whether it's ChatGPT or any of the other services out there, they're getting better every month. You can see that where we feel like the opportunity to make our experience of shopping on ThredUp better every month, you know, through AI. I think that part's exciting and the team's working super hard. These are hard, big, big problems to solve. I think on the question around new buyer growth rate, look, I don't expect it to be 95% every quarter or 75% every quarter. There's a real acceleration there that has happened. I think we feel good about the addressable market. I mean, this is a big market in the U.S., expected to double by 2030. There are a lot of women out there that either casual shop versus secondhand or have never shopped secondhand. We think we can go out and acquire those customers at very predictable and large numbers. I don't have a steady-state rate for you, but I would say that we have a million and a half customers. There's an order of magnitude more customers out there that are not ThredUp customers than are. That's sort of how we feel about the opportunity. Then you had a second, your other question was in there with on the model, was on which one? On the. Yeah, linking AI to financial modeling, like how might we rank order some of the. Yeah, I think you sort of suggested that really on the customer acquisition piece was the top of the list. I would agree with that. I think it has helped us really drive conversion throughout the funnel, make our ad spend more effective. I would say though that the other piece is, if you shop ThredUp today, the experience feels more elevated. I think we're working further to even elevate the shopping experience. I think the work that we've done improving the crispness of the images, some of the work we've done with on-model photography, the merchandising has improved. A lot of that stuff has really elevated the shopping journey. We hear that from customers that ThredUp just feels like a more elevated experience than it was a couple of years ago. I think that's drawing more customers into the fold and increasing kind of people's feeling of how the site is and what it means to shop there. Okay. James, you've been a visionary within this sector. What are your thoughts about consolidation going forward or how you see the next leg of innovation over the longer term, and how might that juxtapose with how you think about CapEx and what investment needs or options you may have in the future? I mean, I don't have a crystal ball on how the market's going to play out. Look, I think the market is big. I think it's growing. I don't think that this is something that is a fad, that people are going to wake up someday a couple of years from now and say, "Oh, I'm never going to shop secondhand again." I think this is a structural shift. I think similar to how off-price spent 20 or 30 years really shifting how consumers shopped and behaved, secondhand is on a similar journey. I do think there'll be big, big companies created. ThredUp, I hope, will be one of them. We'll sort of see what happens. I think that generally speaking, the fact that the market is big and the structural shift would suggest that there'll be some big companies. Okay. Last one on customer acquisition cost. There are a lot of puts and takes and different forces here. What's changed the most in your perspective there or framework, or maybe not much has changed, but just the tactics around you have, or do you have any thoughts on shifts and what that may imply for the future on the customer acquisition cost? Yeah, I mean, we've seen some change on CPMs, I think on Meta and on Google, which I think are consistent with some of the changes with how big ad buyers like Temu or Shein are moving in and out of the market. By far, the biggest driver has been that conversion rate. Conversion rates, right, when they go up significantly, it changes all the math in a pretty dramatic way. Our CACs have come down commensurate with our improvements in the product experience. That has allowed us to spend more money. By spending more money, we're actually able to optimize the funnel even more. You really do have this virtuous cycle driven by the product experience. Thank you. Best regards. Thank you. There are no further questions at this time. I will now hand the call back to Mr. James Reinhart for any closing remarks. Thank you all for joining us on this call. We're really excited about the momentum in the business and want to send a big thank you to the ThredUp team that I think has done an incredible job continuing to do the really hard work to serve customers. Thank you all and thank you to the team, and we'll see you next time. Thank you. This concludes today's call. Thank you for participating. You may now disconnect.