0001573221-24-000070 | 10-Q | XBRL Viewer

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):


Fiscal Year	Amount
Remainder of 2024	$	20,876
2025	28,070
2026	27,907
2027	24,104
2028	21,377
Thereafter	19,995
Total future minimum payments	$	142,329
Less: Imputed interest	(20,286)
Present value of operating lease liabilities	$	122,043

Schedule of Supplemental Cash Flow Information Related to Operating Leases

Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Operating cash flows used for operating leases	$	6,768	$	8,231
Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications)	$	2,009	$	(1,493)

Schedule of Weighted Average Remaining Lease Term and Discount Rate for Operating Leases

The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:


	March 31, 2024
Weighted average remaining lease term	5.3
Weighted average discount rate	6.1	%

Share-based Compensation Plans

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share-based Compensation Plans

2019 Equity Incentive Plan

In connection with the Company’s initial public offering, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan allows the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to participants. Subject to the terms and conditions of the 2019 Plan, the initial number of shares authorized for grants under the 2019 Plan is 8,000,000. These available shares increase annually by an amount equal to the lesser of 8,000,000 shares, 5% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or the number of shares determined by the Company’s board of directors.

The Company's board of directors approved an increase of shares available for grant under the 2019 Plan by 4,648,003 shares on February 23, 2022, by 4,954,409 shares on February 13, 2023, and by 5,233,525 on February 20, 2024.

In February 2022, the Company granted PSUs with financial performance targets to certain employees of the Company. The number of units issued will depend on the achievement of financial metrics relative to the approved performance targets, and can range from 0% to 150% of the target amount. The PSUs are subject to continuous service with the Company and will vest after approximately three years. The PSUs are measured using the fair value at the date of grant. The compensation expense associated with PSUs is recognized based on the estimated number of shares that the Company expects will vest and may be adjusted based on interim estimates of performance against the performance condition. During the three months ended March 31, 2024, the Company has not recorded stock-based compensation expense as attainment of the financial performance targets is not considered probable.

In March 2023, the Company granted PSUs under the 2019 Plan subject to the achievement of both market and service conditions to certain employees of the Company. The number of units vested will depend on the achievement of approved market conditions and continuous service with the Company. The PSUs are eligible to vest in three tranches over a five-year performance period. The PSUs are measured using the Monte Carlo simulation to obtain the fair value at the date of grant based on the probability that the market conditions will be met. The compensation expense associated with the PSUs is based on the fair value and is recognized over the requisite service period. The compensation expense will be recognized regardless of whether the market condition is ever satisfied, provided the requisite service period is satisfied.

In March 2024, the Company granted PSUs with financial performance targets to certain employees of the Company. The number of units issued will depend on the achievement of financial metrics relative to the approved performance targets, and can range from 0% to 200% of the target amount. The PSUs are subject to continuous service with the Company and will vest after approximately three years. The PSUs are measured using the fair value at the date of grant. The compensation expense associated with PSUs is recognized based on the estimated number of shares that the Company expects will vest and may be adjusted based on interim estimates of performance against the performance condition.

As of March 31, 2024, there was total unrecognized compensation expense of approximately $49.0 million related to RSUs and PSUs, which are expected to be recognized over the remaining weighted-average vesting period of approximately 2.4 years. As of March 31, 2024, there was no unrecognized compensation expense related to options.

Inducement Grants

The Company granted stock-based awards outside of the 2019 Plan to certain executives. These awards were granted as inducements material to their commencement of employment and entry into offer letters with the Company, in accordance with Nasdaq Listing Rule 5635(c)(4).

The inducement pool consists of a total of 4,375,000 shares of the Company's common stock, which includes (a) 1,500,000 shares of PSUs that are eligible to vest based on market and service conditions in four tranches over a five-year performance period and (b) 2,875,000 shares of RSUs generally subject to the same terms and conditions as grants that are made under the 2019 Plan. As of March 31, 2024, the unrecognized expense for the PSUs is $1.1 million and the unrecognized expense for RSUs is $5.9 million.

Employee Stock Purchase Plan

In connection with the Company’s initial public offering, the Company adopted the Employee Stock Purchase Plan (the "ESPP"). The Employee Stock Purchase Plan permits employees to purchase shares of common stock during six-month offering periods at a purchase price equal to the lesser of (1) 85% of the fair market value of a share of common stock on the first business day of such offering period and (2) 85% of the fair market value of a share of common stock on the last business day of such offering period. The initial number of shares of common stock that could be issued under the employee stock purchase plan was 1,750,000 shares. These available shares increase by an amount equal to the lesser of 1,750,000 shares, 1% of the number of shares of common stock outstanding on the immediately preceding December 31, or the number of shares determined by the Company’s board of directors.

There were no shares purchased by employees under the ESPP during the three months ended March 31, 2024 and 2023. As of March 31, 2024, total unrecognized compensation costs related to the ESPP was immaterial.

Stock-based Compensation

Total stock-based compensation expense by function was as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Marketing	$	410	$	450
Operations and technology	2,304		3,691
Selling, general and administrative	4,406		4,850
Total	$	7,120	$	8,991

During the three months ended March 31, 2024 and 2023, the Company capitalized $0.1 million and $0.3 million, of stock-based compensation expense to proprietary software, respectively.

Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Net Carrying Amount \| 2025 Convertible senior notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Net Carrying Amount	$ 26.5	$ 170.6
Net Carrying Amount \| 2028 Convertible senior notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Net Carrying Amount	275.8	281.9
Estimated Fair Value \| 2025 Convertible senior notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated Fair Value	20.1	128.2
Estimated Fair Value \| 2028 Convertible senior notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated Fair Value	$ 123.3	$ 100.0

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net loss	$ (31,101)	$ (82,500)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Share-based Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Total Stock-based Compensation Expense, by Function

Total stock-based compensation expense by function was as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Marketing	$	410	$	450
Operations and technology	2,304		3,691
Selling, general and administrative	4,406		4,850
Total	$	7,120	$	8,991

Condensed Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Financial Position [Abstract]
Depreciation and amortization expense on property and equipment	$ 8.2	$ 7.5
Leasehold improvements impairment charge	$ 0.0	$ 7.2

Condensed Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	105,917,789	104,670,500
Common stock, shares, outstanding (in shares)	105,917,789	104,670,500

Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Financial Instruments Measured at Fair Value

The following table sets forth the Company's financial instruments on the balance sheet that were measured at fair value on a recurring basis for the period indicated by level within the fair value hierarchy (in millions):


	March 31, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market funds	$	143.0	$	—	$	—	$	143.0
Total	$	143.0	$	—	$	—	$	143.0
Financial liabilities:
Warrants	$	—	$	—	$	26.0	$	26.0
Total	$	—	$	—	$	26.0	$	26.0

Schedule of Carrying Values and Estimated Fair Values

The following table presents the carrying amounts and estimated fair values of the financial instruments that are not recorded at fair value on the condensed balance sheets (in millions):


	March 31, 2024				December 31, 2023
	Net Carrying Amount		Estimated Fair Value		Net Carrying Amount		Estimated Fair Value
2025 Convertible senior notes	$	26.5	$	20.1	$	170.6	$	128.2
2028 Convertible senior notes	$	275.8	$	123.3	$	281.9	$	100.0

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The aggregate fair value of the Warrants upon issuance and as of March 31, 2024 was $10.4 million and $26.0 million, respectively, determined using a Black-Scholes Model with the following inputs:


	On issuance		March 31, 2024
Stock price	$1.77		$3.91
Exercise price	$1.71		$1.71
Expected life in years	5.00		4.92
Expected volatility	94.84	%	97.15	%
Expected dividends	—	%	—	%
Discount rate	4.26	%	4.21	%

Schedule of Warrants

The following table presents the activity related to the Warrants during the three months ended March 31, 2024.


Opening balance	$	—
Issuance of warrants	10,417
Change in fair value	15,583
Ending balance	$	26,000

Non-convertible Notes, Net

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Non-convertible Notes, Net

Note Exchange

On February 29, 2024 (the “Closing Date”), the Company entered into exchange agreements with certain holders (the “Exchange Holders”) of its 2025 Notes and 2028 Notes to exchange (i) $145.8 million in aggregate principal amount of the 2025 Notes and (ii) $6.5 million in aggregate principal amount of the 2028 Notes (together, the “Exchanged Notes”) for

$135.0 million in aggregate principal amount of the Company’s 4.25%/8.75% PIK/Cash Senior Secured Notes due 2029 (the “2029 Notes”), pursuant to an indenture (the “Note Exchange”). The 2029 Notes bear interest at a rate of 13.00% per annum, consisting of cash interest at a rate of 8.75% per annum payable semi-annually in arrears and payment in-kind (“PIK”) interest at a rate of 4.25% per annum payable semi-annually. During the three months ended March 31, 2024, there were no amounts added to the principal amounts outstanding due to accrued PIK interest. The 2029 Notes will mature on the earlier of (a) March 1, 2029 and (b) any date, if any, on or after December 1, 2027 on which (a) the aggregate principal amount of the 2028 Notes then outstanding is greater than $20 million and (b) the difference between (i) the amount of unrestricted cash and cash equivalents held by the Company and its subsidiaries (if any) as of such date of determination and (ii) the aggregate principal amount of 2028 Notes outstanding as of such date of determination is less than $75 million. In connection with the Note Exchange, the Company issued the Warrants (see Note 4 – Fair Value Measurement for further details on the terms of the Warrants).

As the terms of the 2029 Notes were deemed to have substantially different terms from the Exchanged Notes, the Note Exchange was accounted for as an extinguishment of the Exchanged Notes. In connection with debt extinguishment accounting, the Company recorded a gain of $4.2 million as the difference between the carrying amount of the Exchanged Notes and the fair value of the 2029 Notes. Included in the recorded gain are unamortized debt discounts and issuance costs related to the Exchanged Notes and the fair value of the Warrants as they represent fees paid to the Exchange Holders as part of the Note Exchange.

The Company allocated issuance costs to the Warrants and the 2029 Notes based on relative fair value. The Company allocated $0.4 million of issuance costs to the Warrants with the balance being allocated to the 2029 Notes. Issuance costs related to the 2029 Notes are being amortized to interest expense through the expected maturity of the 2029 Notes at an effective interest rate of 13.35%.

The indenture governing the 2029 Notes contains certain covenants, which include (i) a covenant by the Company not to permit liquidity (calculated as the sum of (a) unused commitments then available to be drawn under any revolving credit facility, delayed draw term loan facility or qualified securitization financing permitted thereunder (after giving effect to any borrowing base or similar limitations), plus (b) the amount of unrestricted cash and cash equivalents held by the Company and its subsidiaries (if any)) to be less than $25 million as of the last day of any month, (ii) limitations on the Company’s and certain of its future subsidiaries’ (if any) ability to, among other things, (a) grant or incur liens securing indebtedness, (b) incur assume or guarantee additional indebtedness, (c) enter into transactions with affiliates, (d) sell or otherwise dispose of assets, including capital stock of subsidiaries, (e) make certain restricted payments or other investments, or (f) pay dividends or make other distributions (including loans and other advances and (iii) limitations, in the case of the Company and any future guarantor (if any), to consolidate, amalgamate or merge with or into, or sell all or substantially all of its assets to, another person.

The indenture governing the 2029 Notes sets forth certain events of default after which the 2029 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company or its subsidiaries.

The 2029 Notes are guaranteed by certain of the Company’s future wholly-owned domestic subsidiaries (if any) on a senior secured basis. The 2029 Notes and the guarantees (if any), together with any future indebtedness secured on a pari passu basis with the 2029 Notes and the guarantees (if any), are secured by a first priority lien on substantially all of the assets of the Company and the guarantors (if any), subject to certain exceptions.

On or after March 1, 2025, the Company may redeem the 2029 Notes at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as percentages of principal amount) plus accrued and unpaid interest, to, but excluding, the applicable redemption date (subject to the right of holders of record of the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the following periods: March 1, 2025 to (but excluding) March 1, 2026 - 113.0%; March 1, 2026 to (but excluding) October 1, 2026 - 106.5%; and October 1, 2026 and thereafter - 100.0%. In addition, prior to March 1, 2025, the Company may redeem the 2029 Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the 2029 Notes redeemed plus the applicable premium as of, and accrued and unpaid interest to, but excluding, the applicable redemption date (subject to the right of holders of record of the relevant record date to receive interest due on the relevant interest payment date). Notwithstanding the foregoing, at any time and from time to time on or prior to March 1, 2025, the Company may redeem in the aggregate up to 40% of the original aggregate principal amount of the 2029 Notes (calculated after giving effect to the issuance of any PIK payments) with the net proceeds of one or more equity offerings to the extent the net cash proceeds thereof are contributed to the common equity capital of the Company or are used to purchase capital stock (other than disqualified

stock) of the Company, at a redemption price of 113.0%, plus accrued and unpaid interest, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), provided at least 60% of the original aggregate principal amount of the 2029 Notes (calculated after giving effect to any PIK payments) remains outstanding after each such redemption.

A schedule of the Company's future maturities for the 2029 Notes with interest components included in principal, is as follows (in thousands):


	Amount
Fiscal Year	2029 Notes
2024 through 2028	$	—




2029	166,592
Total expected payments at maturity	166,592
Less unamortized debt issuance costs and debt premium, net	(3,801)
Less amounts related to PIK interest	(31,592)
Net carrying amount	$	131,199

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2024
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to revenue recognition, including the returns reserve, standalone selling price related to consignment revenue transactions, valuation of inventory, software development costs, stock-based compensation, fair value of warrant liability, initial fair value of non-convertible notes, incremental borrowing rates related to lease liability, valuation of deferred taxes, and other contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. The disclosures provided herein should be read in conjunction with the audited financial statements and notes thereto included in our 2023 Form 10-K. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 2” in our 2023 Form 10-K for a complete summary of our significant accounting policies.
Net Loss per Share Attributable to Common Stockholders	Net Loss per Share Attributable to Common Stockholders The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method determines net loss per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available or attributable to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s convertible senior notes are participating securities as they give the holders the right to receive dividends if dividends or distributions declared to the common stockholders is equal to or greater than the last reported sale price of the Company’s common stock on the trading day immediately preceding the ex-dividend date for such dividend or distribution as if the instruments had been converted into shares of common stock. No undistributed earnings were allocated to the participating securities as the contingent event is not satisfied as of the reporting date. Basic net loss per share attributable to common stockholders is calculated by dividing the net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
Revenue Recognition	Revenue Recognition The Company generates revenue from the sale of pre-owned luxury goods through its online marketplace and retail stores. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that include products and services that are capable of being distinct and accounted for as separate performance obligations as described below. The transaction price requires an allocation across consignment services, sales of Company-owned inventory, and shipping services. Estimation is required in the determination of the services' stand-alone selling price (“SSP”). Consignment Revenue The Company provides a service to sell pre-owned luxury goods on behalf of consignors to buyers through its online marketplace and retail stores. The Company retains a percentage of the proceeds received as payment for its consignment service, which the Company refers to as its take rate. SSP is estimated using observable stand-alone consignment sales which are conducted without shipping services. The Company reports consignment revenue on a net basis as an agent and not the gross amount collected from the buyer. Title to the consigned goods remains with the consignor until transferred to the buyer upon purchase of the consigned goods and expiration of the allotted return period. The Company does not take title of consigned goods at any time except in certain cases where returned goods become Company-owned inventory. The Company recognizes consignment revenue upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point. Consignment revenue is recognized net of estimated returns, cancellations, buyer incentives and adjustments. The Company recognizes a returns reserve based on historical experience, which is recorded in other accrued and current liabilities on the condensed balance sheets (see Note 5). Sales tax assessed by governmental authorities is excluded from revenue. Certain transactions provide consignors with a material right resulting from the tiered consignor commission plan. Under this plan, the amount an individual consignor receives for future sales of consigned goods may be dependent on previous consignment sales for that consignor within his/her consignment period. Accordingly, in certain consignment transactions, a small portion of the Company’s consignment revenue is allocated to such material right using the portfolio method and recorded as deferred revenue, which is recorded in other accrued and current liabilities on the condensed balance sheets. The impact of the deferral has not been material to the financial statements. The Company also generates subscription revenue from monthly memberships allowing buyers early access to shop for luxury goods. The buyers receive the early access and other benefits over the term of the subscription period, which represents a single stand-ready performance obligation. Therefore, the subscription fees paid by the buyer are recognized over the monthly subscription period. Subscription revenue was not material in the three months ended March 31, 2024 and 2023. Direct Revenue The Company generates direct revenue from the sale of Company-owned inventory. The Company recognizes direct revenue on a gross basis upon shipment of the purchased good to the buyer as the Company acts as the principal in the transaction. SSP is estimated using observable stand-alone sales of Company-owned inventory which are conducted without shipping services, when available, or a market assessment approach. Direct revenue is recognized net of estimated returns, buyer incentives and adjustments. Sales tax assessed by governmental authorities is excluded from revenue. Cost of direct revenue is also recognized upon shipment to the buyer in an amount equal to that paid to the consignor from the original consignment sale, an amount equal to that paid as a direct purchase from a third party, or the lower of cost of the inventory purchased and its net realizable value. Shipping Services Revenue The Company provides a service to ship purchased items to buyers and a service to ship items from buyers back to the Company. The Company determines itself to be the principal in this arrangement. The Company charges a fee to buyers for this service and has elected to treat shipping and handling activities performed as a separate performance obligation. For shipping services revenue, the Company's SSP is estimated using a market approach considering external and internal data points on the stand-alone sales price of the shipping service. All outbound shipping and handling costs for buyers are accounted for as cost of shipping services and recognized as the shipping activity occurs. The Company also generates shipping services revenue from the shipping fees for consigned products returned by buyers to the Company within policy. The Company recognizes shipping revenue and associated costs over time as the shipping activity occurs, which is generally one to three days after shipment. Incentives Incentives, which include platform-wide discounts and buyer incentives, may periodically be offered to buyers. Platform-wide discounts are made available to all buyers on the online marketplace. Buyer incentives apply to specific buyers and consist of coupons or promotions that offer credits in connection with purchases on the Company’s platform, and do not impact the commissions paid to consignors. These are treated as a reduction of consignment revenue and direct revenue. Additionally, the Company periodically offers commission exceptions to the standard consignment rates to consignors to optimize its supply. These are treated as a reduction of consignment revenue at the time of sale. The Company may offer a certain type of buyer incentive in the form of site credits to buyers on current transactions to be applied towards future transactions, which are included in other accrued and current liabilities on the condensed balance sheets. Contract Liabilities The Company’s contractual liabilities primarily consist of deferred revenue for material rights primarily related to the tiered consignor commission plan, which are recognized as revenue using a portfolio approach based on the pattern of exercise, and certain buyer incentives. Contract liabilities are recorded in other accrued and current liabilities on the balance sheets and are generally expected to be recognized within one year. Contract liabilities were immaterial as of March 31, 2024 and December 31, 2023.
Cost of Revenue	Cost of Revenue Cost of consignment revenue consist of credit card fees, packaging, customer service personnel-related costs, website hosting services, and consignor inventory adjustments relating to lost or damaged products. Cost of direct revenue consists of the cost of goods sold, credit card fees, packaging, customer service personnel-related costs, website hosting services, and inventory adjustments. Cost of shipping services revenue consists of the outbound shipping and handling costs to deliver purchased items to buyers, the shipping costs for consigned products returned by buyers to the Company within policy, and an allocation of the credit card fees associated with the shipping fee charged.
Stock-based Compensation	Stock-based Compensation The Company incurs stock-based compensation expense from stock options, restricted stock units (“RSUs”), performance based restricted stock units (“PSUs”) subject to performance or market conditions, and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense related to employees and nonemployees is measured based on the grant-date fair value of the awards. The Company estimates the fair value of stock options granted and the purchase rights issued under the ESPP using the Black-Scholes option pricing model. The fair value of RSUs is estimated based on the fair market value of the Company’s common stock on the date of grant, which is determined based on the closing price of the Company’s common stock. Compensation expense is recognized in the statements of operations over the period during which the employee is required to perform services in exchange for the award (the vesting period of the applicable award) using the straight-line method for awards with only a service condition. To determine the grant-date fair value of the Company's stock-based payment awards for PSUs subject to performance conditions, the quoted stock price on the date of grant is used. The stock-based compensation expense for PSUs with performance conditions is recognized based on the estimated number of shares that the Company expects will vest and is adjusted on a quarterly basis using the estimated achievement of financial performance targets. For PSUs subject to market conditions, the grant-date fair value is determined using the Monte Carlo simulation model which utilizes multiple input variables to estimate the probability that market conditions will be achieved. These variables include the Company's expected stock price volatility over the expected term of the award, the risk-free interest rate for the expected term of the award, and expected dividends. For PSUs with market conditions, the stock-based compensation expense is recognized on a tranche by tranche basis over the requisite service period using the fair value derived from the Monte Carlo simulation model. The compensation expense will be recognized regardless of whether the market condition is ever satisfied, provided the requisite service period is satisfied. For all awards, the Company accounts for forfeitures as they occur.
Cash and Cash Equivalents	Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents primarily consist of investments in short-term money market funds.
Restricted Cash	Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases and the Company’s credit cards.
Inventory, Net	Inventory, Net Inventory consists of finished goods arising from goods returned after the title has transferred from the buyer to the Company as well as finished goods from direct purchases from vendors and consignors. The cost of inventory is an amount equal to that paid to the consignor or vendors. Inventory is valued at the lower of cost and net realizable value using the specific identification method and the Company records provisions, as appropriate, to write down obsolete and excess inventory to estimated net realizable value. After the inventory value is reduced, adjustments are not made to increase it from the estimated net realizable value. Additionally, inventory is recorded net of an allowance for shrinkage which represents the risk of physical loss of inventory. Provisions for inventory shrinkage are estimated based on historical experience and are adjusted based upon physical inventory counts. Provisions to write down inventory to net realizable value and provisions for inventory shrinkage were $1.1 million and $3.4 million during the three months ended March 31, 2024 and 2023, respectively. Return reserves, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in other accrued and current liabilities on the condensed balance sheets and were $22.9 million and $22.2 million as of March 31, 2024 and December 31, 2023, respectively. Included in inventory on the Company’s condensed balance sheets are assets totaling $3.6 million and $5.2 million as of March 31, 2024 and December 31, 2023, respectively, for the rights to recover products from customers associated with its liabilities for return reserves.
Software Development Costs	Software Development Costs Proprietary software includes the costs of developing the Company’s internal proprietary business platform and automation projects. The Company capitalizes qualifying proprietary software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed and (2) it is probable that the software will be completed and used for its intended function. Such costs are capitalized in the period incurred. Capitalization ceases and amortization begins when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.
Impairment of Long-lived Assets	Impairment of Long-lived Assets The carrying amounts of long-lived assets, including right-of-use assets, property and equipment, net and capitalized proprietary software, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets to be held and used is measured by comparing the carrying amount of assets to future undiscounted net cash flows the assets are expected to generate over their remaining life. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the revised shorter useful life.
Leases	Leases Contracts that have been determined to convey the right to use an identified asset are evaluated for classification as an operating or finance lease. For the Company’s operating leases, the Company records a lease liability based on the present value of the lease payments at lease inception, using the applicable incremental borrowing rate. The Company estimates the incremental borrowing rate by developing its own synthetic credit rating, corresponding yield curve, and the terms of each lease at the lease commencement date. The corresponding right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease. The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease. Operating lease right-of-use assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion are included on the Company’s condensed balance sheet. The Company has elected the practical expedients that allows for the combination of lease components and non-lease components and to record short-term leases as lease expense on a straight-line basis on the condensed statements of operations. Variable lease payments are recorded as expense as they are incurred. The Company has finance leases for vehicles and equipment, and the amounts of finance lease right-of-use assets and finance lease liabilities have been immaterial to date.
Debt	Debt The Company initially recognizes incurred debt, net of any discounts, premiums and issuance costs related to the debt offering. All debt issuance costs are presented as a direct deduction from the related principal debt amounts on the balance sheet. Debt obligations due within 12 months are classified as current liabilities. Debt discounts, premiums and issuance costs are amortized to interest expense over the estimated life of the related debt using the effective interest method. When multiple instruments are issued in the same transaction, the Company allocates any issuance costs to the instruments on the same basis as the allocation of proceeds. Issuance costs allocated to instruments measured at fair value are expensed in the period incurred.
Capped Call Transactions	Capped Call Transactions In June 2020 and March 2021, in connection with the issuance of its convertible senior notes, the Company entered into the capped call transactions (see Note 7). The capped call transactions are expected generally to reduce the potential dilution to the holders of the Company’s common stock upon any conversion of the convertible senior notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted convertible senior notes, with such reduction and/or offset subject to a cap based on the cap price. The Capped Calls (as defined below) are classified in stockholders’ equity as a reduction to additional paid-in capital and are not subsequently remeasured as long as the conditions for equity classification continue to be met. The Company monitors the conditions for equity classification, which continue to be met.
Concentrations of Credit Risks	Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, restricted cash and accounts receivable. At times, such amount may exceed federally-insured limits. The Company is closely monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally. The Company reduces credit risk by placing its cash, cash equivalents, restricted cash and investments with major financial institutions with high credit ratings within the United States. The Company has not experienced any realized losses on cash, cash equivalents and restricted cash to date; however, no assurances can be provided. As of March 31, 2024 and December 31, 2023, there were no customers that represented 10% or more of the Company’s accounts receivable balance and there were no customers that individually exceeded 10% of the Company’s total revenue for each of the three months ended March 31, 2024 and 2023.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s condensed financial statements and footnote disclosures, from those disclosed in the 2023 Annual Report on Form 10-K.

Net Loss Per Share Attributable to Common Stockholders (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Loss Per Share

A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss per share attributable to common stockholders is as follows (in thousands, except share and per share data):


	Three Months Ended March 31,
	2024		2023
Numerator
Net loss attributable to common stockholders	$	(31,101)	$	(82,500)
Denominator
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted	105,212,053		99,608,071
Net loss per share attributable to common stockholders, basic and diluted	$	(0.30)	$	(0.83)

Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share

The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis):


	March 31,
	2024	2023
Options to purchase common stock	1,083,475	1,723,850
Restricted stock units	18,490,842	18,261,493
Estimated shares issuable under the Employee Stock Purchase Plan	139,842	260,261
Assumed conversion of the Convertible Senior Notes	10,342,056	18,746,323
Warrants to purchase common stock	7,894,737	—
Total	37,950,952	38,991,927

Income Taxes (Details). $ in Millions	Mar. 31, 2024 USD ($)
Income Tax Disclosure [Abstract]
Valuation allowance	$ 292.3
Net deferred tax assets	319.4
Unrecognized tax benefits	2.8
Unrecognized tax benefits, interest	0.0
Unrecognized tax benefits that would impact effective tax rate	$ 0.0

Fair Value Measurement

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurement

Assets and liabilities recorded at fair value on a recurring basis on the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the periods presented.

Assets and Liabilities Measured at Fair Value on a Recurring Basis


	March 31, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market funds	$	143.0	$	—	$	—	$	143.0
Total	$	143.0	$	—	$	—	$	143.0
Financial liabilities:
Warrants	$	—	$	—	$	26.0	$	26.0
Total	$	—	$	—	$	26.0	$	26.0

As of December 31, 2023, the Company held $124.8 million in money market funds. Such amounts are considered Level 1 and the Company held no other assets or liabilities that are measured at recurring fair value on a recurring basis.

Fair Value Measurements of Other Financial Instruments

The following table presents the carrying amounts and estimated fair values of the financial instruments that are not recorded at fair value on the condensed balance sheets (in millions):


	March 31, 2024				December 31, 2023
	Net Carrying Amount		Estimated Fair Value		Net Carrying Amount		Estimated Fair Value
2025 Convertible senior notes	$	26.5	$	20.1	$	170.6	$	128.2
2028 Convertible senior notes	$	275.8	$	123.3	$	281.9	$	100.0

The principal amounts of its 3.00% Convertible Senior Notes due 2025 (“2025 Notes”) and 1.00% Convertible Senior Notes due 2028 (the “2028 Notes” and, together with the 2025 Notes, the “Convertible Senior Notes”) are $26.7 million and $281.0 million, respectively. The difference between the principal amounts of the Convertible Senior Notes and their respective net carrying amounts are the unamortized debt issuance costs (See Note 7).

As of March 31, 2024, the fair value of the 2025 Notes and 2028 Notes, which differs from their carrying value is determined based on the quoted bid prices of the Notes in an over-the counter market using the latest trading information of the reporting period.

Fair Value Measurement of Warrants

In connection with the Note Exchange (defined in Note 6 – Non-convertible Notes, Net), the Company issued warrants (the "Warrants") to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the Warrants) of the Company’s common stock to the holders of the Exchanged Notes at an exercise price of $1.71, subject to certain cashless exercise provisions and adjustment in accordance with the terms of the Warrants. The Warrants are exercisable from the date of issuance until they expire on March 1, 2029. The Warrants are accounted for as liabilities under ASC 480 since the warrants may be required to be settled in cash in case of a fundamental change, which could occur outside of the Company’s control. Changes in fair value are recognized within change in fair value of warrant liability on the Company’s condensed statement of operations. Issuance costs allocated to the Warrants are included in selling, general and administrative on the Company’s condensed statement of operations.

The aggregate fair value of the Warrants upon issuance and as of March 31, 2024 was $10.4 million and $26.0 million, respectively, determined using a Black-Scholes Model with the following inputs:


	On issuance		March 31, 2024
Stock price	$1.77		$3.91
Exercise price	$1.71		$1.71
Expected life in years	5.00		4.92
Expected volatility	94.84	%	97.15	%
Expected dividends	—	%	—	%
Discount rate	4.26	%	4.21	%

The following table presents the activity related to the Warrants during the three months ended March 31, 2024.


Opening balance	$	—
Issuance of warrants	10,417
Change in fair value	15,583
Ending balance	$	26,000

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Description of Business and Basis of Presentation	3 Months Ended
Description of Business and Basis of Presentation	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation Organization and Description of Business The RealReal, Inc. (the “Company”) is an online marketplace for authenticated, consigned luxury goods across multiple categories, including women’s fashion, men’s fashion, and jewelry and watches. The Company was incorporated in the state of Delaware on March 29, 2011 and is headquartered in San Francisco, California. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. The Company’s functional and reporting currency is the U.S. dollar. The condensed balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date. The accompanying unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, stockholders’ equity (deficit), and cash flows for the periods presented. For the three months ended March 31, 2024 and 2023, comprehensive loss is equal to net loss as the Company has no other comprehensive income (loss) item in the periods presented. The Company has made a presentation change to reclassify loss on disposal of property and equipment and impairment of capitalized proprietary software to other adjustments within operating cash flows in the Condensed Statements of Cash Flows. Changes to reclassify amounts in the prior periods have been made to conform to the current period presentation. These unaudited condensed financial statements should be read in conjunction with the Company’s financial statements and notes included in our Annual Report on Form 10-K filed with the SEC on March 1, 2024.

Summary of Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 165,996	$ 175,709	$ 247,145
Restricted cash	14,910	14,914	0
Total cash, cash equivalents and restricted cash	$ 180,906	$ 190,623	$ 247,145	$ 293,793

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 165,996	$ 175,709
Accounts receivable, net	19,819	17,226
Inventory, net	21,120	22,246
Prepaid expenses and other current assets	18,387	20,766
Total current assets	225,322	235,947
Property and equipment, net	101,327	104,087
Operating lease right-of-use assets	84,690	86,348
Restricted cash	14,910	14,914
Other assets	5,330	5,627
Total assets	431,579	446,923
Current liabilities
Accounts payable	14,126	8,961
Accrued consignor payable	75,800	77,122
Operating lease liabilities, current portion	21,234	20,094
Other accrued and current liabilities	82,528	82,685
Total current liabilities	193,688	188,862
Operating lease liabilities, net of current portion	100,809	104,856
Convertible senior notes, net	302,324	452,421
Non-convertible notes, net	131,199	0
Warrant liability	26,000	0
Other noncurrent liabilities	4,612	4,083
Total liabilities	758,632	750,222
Commitments and contingencies (Note 11)
Stockholders’ deficit:
Common stock, $0.00001 par value; 500,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 105,917,789 and 104,670,500 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	1	1
Additional paid-in capital	823,672	816,325
Accumulated deficit	(1,150,726)	(1,119,625)
Total stockholders’ deficit	(327,053)	(303,299)
Total liabilities and stockholders’ deficit	$ 431,579	$ 446,923

Condensed Statements of Operations - USD ($) $ in Thousands	3 Months Ended
Condensed Statements of Operations - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Revenue:
Total revenue	$ 143,800	$ 141,904
Cost of revenue:
Total cost of revenue	36,521	51,921
Gross profit	107,279	89,983
Operating expenses:
Marketing	15,283	17,518
Operations and technology	62,972	68,032
Selling, general and administrative	46,770	49,845
Restructuring charges	196	36,388
Total operating expenses	125,221	171,783
Loss from operations	(17,942)	(81,800)
Change in fair value of warrant liability	(15,583)	0
Gain on extinguishment of debt	4,177	0
Interest income	2,069	2,053
Interest expense	(3,751)	(2,667)
Loss before provision for income taxes	(31,030)	(82,414)
Provision for income taxes	71	86
Net loss attributable to common stockholders	$ (31,101)	$ (82,500)
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.30)	$ (0.83)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.30)	$ (0.83)
Shares used to compute net loss per share attributable to common stockholders, basic (in shares)	105,212,053	99,608,071
Shares used to compute net loss per share attributable to common stockholders, diluted (in shares)	105,212,053	99,608,071
Consignment revenue
Revenue:
Total revenue	$ 115,648	$ 102,643
Cost of revenue:
Total cost of revenue	13,280	15,529
Direct revenue
Revenue:
Total revenue	12,709	24,953
Cost of revenue:
Total cost of revenue	12,285	25,030
Shipping services revenue
Revenue:
Total revenue	15,443	14,308
Cost of revenue:
Total cost of revenue	$ 10,956	$ 11,362

Leases - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Leases [Abstract]
Operating cash flows used for operating leases	$ 6,768	$ 8,231
Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications)	$ 2,009	$ (1,493)

Net Loss Per Share Attributable to Common Stockholders

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Net Loss Per Share Attributable to Common Stockholders


	Three Months Ended March 31,
	2024		2023
Numerator
Net loss attributable to common stockholders	$	(31,101)	$	(82,500)
Denominator
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted	105,212,053		99,608,071
Net loss per share attributable to common stockholders, basic and diluted	$	(0.30)	$	(0.83)


	March 31,
	2024	2023
Options to purchase common stock	1,083,475	1,723,850
Restricted stock units	18,490,842	18,261,493
Estimated shares issuable under the Employee Stock Purchase Plan	139,842	260,261
Assumed conversion of the Convertible Senior Notes	10,342,056	18,746,323
Warrants to purchase common stock	7,894,737	—
Total	37,950,952	38,991,927

Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate For Operating Leases (Details)	Mar. 31, 2024
Leases [Abstract]
Weighted average remaining lease term	5 years 3 months 18 days
Weighted average discount rate	6.10%

Cash and Cash Equivalents

3 Months Ended

Mar. 31, 2024

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

The following tables summarize the estimated value of the Company’s cash and cash equivalents (in thousands) and do not include restricted cash. There are no unrealized gains or losses related to the restricted cash balance.


	March 31, 2024
	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash	$	23,029	$	—	$	—	$	23,029
Money market funds	142,967		—		—		142,967
Total cash and cash equivalents	$	165,996	$	—	$	—	$	165,996


	December 31, 2023
	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash	$	50,947	$	—	$	—	$	50,947
Money market funds	124,762		—		—		124,762
Total cash and cash equivalents	$	175,709	$	—	$	—	$	175,709

Convertible Senior Notes, Net (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of Amounts Recorded in Interest Expense Related to Notes

The following tables set forth the amounts recorded in interest expense related to the 2025 Notes as of the dates indicated (in thousands):


	Three Months Ended March 31,
	2024		2023
Contractual interest expense	$	929	$	1,294
Amortization of debt issuance costs	229		308
Total interest and amortization expense	$	1,158	$	1,602

The following tables set forth the amounts recorded in interest expense related to the 2028 Notes as of the dates indicated (in thousands):


	Three Months Ended March 31,
	2024		2023
Contractual interest expense	$	713	$	719
Amortization of debt issuance costs	327		325
Total interest and amortization expense	$	1,040	$	1,044

Schedule of Future Minimum Payments Under Notes

A schedule of the Company's future maturities for the 2029 Notes with interest components included in principal, is as follows (in thousands):


	Amount
Fiscal Year	2029 Notes
2024 through 2028	$	—




2029	166,592
Total expected payments at maturity	166,592
Less unamortized debt issuance costs and debt premium, net	(3,801)
Less amounts related to PIK interest	(31,592)
Net carrying amount	$	131,199


	Amount
Fiscal Year	2025 Notes		2028 Notes
2024	$	—	$	—
2025	26,749		—
2026	—		—
2027	—		—
2028	—		281,019
Total principal payments	26,749		281,019
Less unamortized debt issuance costs	(251)		(5,193)
Net carrying amount	$	26,498	$	275,826

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company's provision for income taxes were immaterial for the three months ended March 31, 2024 and 2023. The Company maintained a full valuation allowance of $292.3 million against its gross deferred tax assets which were $319.4 million as of March 31, 2024. The deferred tax assets were primarily comprised of federal and state tax net operating loss carryforwards. Utilization of the net operating loss carryforwards may be subject to annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue Code of 1986, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss carryforwards before their utilization. As of March 31, 2024, the Company had unrecognized tax benefits under ASC 740 Income Taxes of $2.8 million, and no applicable interest. There were no unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate as of March 31, 2024. The Company's policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision. The Company does not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months. Due to historical losses, all years are open to examination and adjustment by the taxing authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Fair Value Measurement - Schedule of Fair Value Measurement Inputs and Valuation Techniques (Details)	Mar. 31, 2024 $ / shares yr	Feb. 29, 2024 $ / shares yr
Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant liability measurement input	3.91	1.77
Exercise price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant liability measurement input	1.71	1.71
Expected life in years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant liability measurement input \| yr	4.92	5.00
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant liability measurement input	0.9715	0.9484
Expected dividends
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant liability measurement input	0	0
Discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant liability measurement input	0.0421	0.0426

Share-based Compensation Plans - Additional Information (Details)	1 Months Ended			3 Months Ended
	Mar. 31, 2024 USD ($) tranche shares	Mar. 31, 2023 tranche	Feb. 28, 2022	Mar. 31, 2024 USD ($) tranche shares	Mar. 31, 2023 USD ($) tranche shares	Feb. 20, 2024 shares	Feb. 13, 2023 shares	Feb. 23, 2022 shares	Dec. 31, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation capitalized to proprietary software development costs \| $				$ 140,000	$ 290,000
Estimated shares issuable under the Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)	1,750,000			1,750,000
Annual increase in number of shares, percentage of shares of outstanding common stock (in percent)	1.00%			1.00%
Unrecognized compensation costs \| $	$ 0			$ 0
Options granted as percentage on fair value of stock (in percent)				85.00%
Number of shares purchased (in shares)				0	0
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	3 years	5 years	3 years
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs \| $	$ 0			$ 0
RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs \| $	$ 49,000,000			$ 49,000,000
Weighted average period expect to recognized (in years)				2 years 4 months 24 days
2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase in available number of authorized shares (in shares)									8,000,000
Annual increase in number of shares, percentage of shares of outstanding common stock (in percent)									5.00%
Increase in shares available for grant (in shares)						5,233,525	4,954,409	4,648,003
2019 Plan \| PSUs \| Share-Based Payment Arrangement, Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranche \| tranche		3			3
Inducement Grants \| Share-Based Payment Arrangement, Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested, number of shares (in shares)	4,375,000			4,375,000
Inducement Grants \| PSUs \| Share-Based Payment Arrangement, Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)				5 years
Number of tranche \| tranche	4			4
Unrecognized compensation costs \| $	$ 1,100,000			$ 1,100,000
Nonvested, number of shares (in shares)	1,500,000			1,500,000
Inducement Grants \| Restricted stock units \| Share-Based Payment Arrangement, Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs \| $	$ 5,900,000			$ 5,900,000
Nonvested, number of shares (in shares)	2,875,000			2,875,000
Maximum \| Estimated shares issuable under the Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase in available number of authorized shares (in shares)	1,750,000			1,750,000
Maximum \| PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance target, percentage (in percent)	200.00%		150.00%
Maximum \| 2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)									8,000,000
Minimum \| PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance target, percentage (in percent)	0.00%		0.00%

Fair Value Measurement - Schedule of Warrants (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Warrants [Roll Forward]
Opening balance	$ 0
Issuance of warrants	10,417
Change in fair value	15,583
Ending balance	$ 26,000

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	$ 14,900,000		$ 14,900,000
Provision for inventory write-downs and shrinkage	1,100,000	$ 3,400,000
Rights to recover products from customers	3,600,000		5,200,000
Other Accrued and Current Liabilities
Summary Of Significant Accounting Policies [Line Items]
Inventory return reserves allowances	22,900,000		$ 22,200,000
Common Stock
Summary Of Significant Accounting Policies [Line Items]
Dividend or distribution declared	$ 0

Condensed Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2024

Balance Sheet Related Disclosures [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):


	March 31, 2024		December 31, 2023
Proprietary software	$	46,545	$	44,964
Furniture and equipment	47,871		47,389
Automobiles	2,081		2,069
Leasehold improvements	86,145		84,138
Property and equipment, gross	182,642		178,560
Less: accumulated depreciation and amortization	(81,315)		(74,473)
Property and equipment, net	$	101,327	$	104,087

Schedule of Other Accrued and Current Liabilities

Other accrued and current liabilities consist of the following (in thousands):


	March 31, 2024		December 31, 2023
Returns reserve	$	22,859	$	22,204
Accrued compensation	18,173		20,086
Accrued sales tax and other taxes	8,019		8,118
Site credit and gift card liability	13,664		14,058
Accrued marketing and outside services	7,426		5,012
Accrued shipping	3,152		4,244
Deferred revenue	2,069		2,214
Other	7,166		6,749
Other accrued and current liabilities	$	82,528	$	82,685

Convertible Senior Notes, Net - Schedule of Future Minimum Payments Under Notes (Details) $ in Thousands	Mar. 31, 2024 USD ($)
2025 Convertible senior notes
Debt Disclosure [Line Items]
2024	$ 0
2025	26,749
2026	0
2027	0
2028	0
Total principal payments	26,749
Less unamortized debt issuance costs	(251)
Net carrying amount	26,498
2028 Convertible senior notes
Debt Disclosure [Line Items]
2024	0
2025	0
2026	0
2027	0
2028	281,019
Total principal payments	281,019
Less unamortized debt issuance costs	(5,193)
Net carrying amount	$ 275,826

Condensed Balance Sheet Components - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 182,642	$ 178,560
Less: accumulated depreciation and amortization	(81,315)	(74,473)
Property and equipment, net	101,327	104,087
Proprietary software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	46,545	44,964
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	47,871	47,389
Automobiles
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,081	2,069
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 86,145	$ 84,138

Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

The Company leases its corporate offices, retail spaces and authentication centers under various noncancelable operating leases with terms ranging from one year to fifteen years.

The Company recorded operating lease costs of $5.1 million and $7.1 million for the three months ended March 31, 2024 and 2023, respectively. The Company also incurred $1.5 million and $1.3 million of variable lease costs for the three months ended March 31, 2024 and 2023, respectively. The variable lease costs are comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance.

Due to the office and store closures in the three months ended March 31, 2023, the Company reviewed its right-of-use assets for impairment. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. As a result, the Company recorded $25.7 million related to the impairment of certain office and store right-of-use assets. The impairment charges are included in restructuring charges in the condensed statements of operations.

Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):


Fiscal Year	Amount
Remainder of 2024	$	20,876
2025	28,070
2026	27,907
2027	24,104
2028	21,377
Thereafter	19,995
Total future minimum payments	$	142,329
Less: Imputed interest	(20,286)
Present value of operating lease liabilities	$	122,043

Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Operating cash flows used for operating leases	$	6,768	$	8,231
Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications)	$	2,009	$	(1,493)

The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:


	March 31, 2024
Weighted average remaining lease term	5.3
Weighted average discount rate	6.1	%

The Company has leases for certain vehicles and equipment that are classified as finance leases. The finance lease right-of-use asset and finance lease liabilities for these vehicle and equipment leases are immaterial as of March 31, 2024 and December 31, 2023.

Fair Value Measurement - Schedule of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Feb. 29, 2024	Dec. 31, 2023
Financial assets:
Money market funds	$ 165,996		$ 175,709
Financial liabilities:
Warrants	26,000	$ 10,400	0
Recurring
Financial assets:
Total	143,000
Financial liabilities:
Warrants	26,000
Total	26,000
Recurring \| Money market funds
Financial assets:
Money market funds	143,000		$ 124,800
Recurring \| Level 1
Financial assets:
Total	143,000
Financial liabilities:
Warrants	0
Total	0
Recurring \| Level 1 \| Money market funds
Financial assets:
Money market funds	143,000
Recurring \| Level 2
Financial assets:
Total	0
Financial liabilities:
Warrants	0
Total	0
Recurring \| Level 2 \| Money market funds
Financial assets:
Money market funds	0
Recurring \| Level 3
Financial assets:
Total	0
Financial liabilities:
Warrants	26,000
Total	26,000
Recurring \| Level 3 \| Money market funds
Financial assets:
Money market funds	$ 0

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Schedule of Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash for the period ended March 31, 2024 and December 31, 2023 that sum to the total of the same amounts shown in the statements of cash flows (in thousands):


	March 31, 2024		December 31, 2023		March 31, 2023
Cash and cash equivalents	$	165,996	$	175,709	$	247,145
Restricted cash	14,910		14,914		—
Total cash, cash equivalents and restricted cash	$	180,906	$	190,623	$	247,145

Schedule of Cash and Cash Equivalents


	March 31, 2024		December 31, 2023		March 31, 2023
Cash and cash equivalents	$	165,996	$	175,709	$	247,145
Restricted cash	14,910		14,914		—
Total cash, cash equivalents and restricted cash	$	180,906	$	190,623	$	247,145

Condensed Balance Sheet Components - Schedule of Other Accrued and Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Returns reserve	$ 22,859	$ 22,204
Accrued compensation	18,173	20,086
Accrued sales tax and other taxes	8,019	8,118
Site credit and gift card liability	13,664	14,058
Accrued marketing and outside services	7,426	5,012
Accrued shipping	3,152	4,244
Deferred revenue	2,069	2,214
Other	7,166	6,749
Other accrued and current liabilities	$ 82,528	$ 82,685

Fair Value Measurement - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 31, 2024	Feb. 29, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 165,996		$ 175,709
Aggregate number of shares that can be acquired via the warrants issued (in shares)		7,894,737
Exercise price (in dollars per share)		$ 1.71
Warrant liability	$ 26,000	$ 10,400	0
2025 Convertible senior notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes interest rate (in percent)	3.00%
Aggregate principal amount	$ 26,700
2028 Convertible senior notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes interest rate (in percent)	1.00%
Aggregate principal amount	$ 281,000
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	26,000
Recurring \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 143,000		$ 124,800

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to revenue recognition, including the returns reserve, standalone selling price related to consignment revenue transactions, valuation of inventory, software development costs, stock-based compensation, fair value of warrant liability, initial fair value of non-convertible notes, incremental borrowing rates related to lease liability, valuation of deferred taxes, and other contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. The disclosures provided herein should be read in conjunction with the audited financial statements and notes thereto included in our 2023 Form 10-K. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 2” in our 2023 Form 10-K for a complete summary of our significant accounting policies.

Net Loss per Share Attributable to Common Stockholders

The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method determines net loss per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available or attributable to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company’s convertible senior notes are participating securities as they give the holders the right to receive dividends if dividends or distributions declared to the common stockholders is equal to or greater than the last reported sale price of the Company’s common stock on the trading day immediately preceding the ex-dividend date for such dividend or

distribution as if the instruments had been converted into shares of common stock. No undistributed earnings were allocated to the participating securities as the contingent event is not satisfied as of the reporting date.

Basic net loss per share attributable to common stockholders is calculated by dividing the net loss for the period by the weighted-average number of shares of common stock outstanding during the period.

Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Revenue Recognition

The Company generates revenue from the sale of pre-owned luxury goods through its online marketplace and retail stores. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that include products and services that are capable of being distinct and accounted for as separate performance obligations as described below. The transaction price requires an allocation across consignment services, sales of Company-owned inventory, and shipping services. Estimation is required in the determination of the services' stand-alone selling price (“SSP”).

Consignment Revenue

The Company provides a service to sell pre-owned luxury goods on behalf of consignors to buyers through its online marketplace and retail stores. The Company retains a percentage of the proceeds received as payment for its consignment service, which the Company refers to as its take rate. SSP is estimated using observable stand-alone consignment sales which are conducted without shipping services. The Company reports consignment revenue on a net basis as an agent and not the gross amount collected from the buyer. Title to the consigned goods remains with the consignor until transferred to the buyer upon purchase of the consigned goods and expiration of the allotted return period. The Company does not take title of consigned goods at any time except in certain cases where returned goods become Company-owned inventory.

The Company recognizes consignment revenue upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point. Consignment revenue is recognized net of estimated returns, cancellations, buyer incentives and adjustments. The Company recognizes a returns reserve based on historical experience, which is recorded in other accrued and current liabilities on the condensed balance sheets (see Note 5). Sales tax assessed by governmental authorities is excluded from revenue.

Certain transactions provide consignors with a material right resulting from the tiered consignor commission plan. Under this plan, the amount an individual consignor receives for future sales of consigned goods may be dependent on previous consignment sales for that consignor within his/her consignment period. Accordingly, in certain consignment transactions, a small portion of the Company’s consignment revenue is allocated to such material right using the portfolio method and recorded as deferred revenue, which is recorded in other accrued and current liabilities on the condensed balance sheets. The impact of the deferral has not been material to the financial statements.

The Company also generates subscription revenue from monthly memberships allowing buyers early access to shop for luxury goods. The buyers receive the early access and other benefits over the term of the subscription period, which represents a single stand-ready performance obligation. Therefore, the subscription fees paid by the buyer are recognized over the monthly subscription period. Subscription revenue was not material in the three months ended March 31, 2024 and 2023.

Direct Revenue

The Company generates direct revenue from the sale of Company-owned inventory. The Company recognizes direct revenue on a gross basis upon shipment of the purchased good to the buyer as the Company acts as the principal in the transaction. SSP is estimated using observable stand-alone sales of Company-owned inventory which are conducted without shipping services, when available, or a market assessment approach. Direct revenue is recognized net of estimated returns, buyer incentives and adjustments. Sales tax assessed by governmental authorities is excluded from revenue. Cost of direct revenue is also recognized upon shipment to the buyer in an amount equal to that paid to the consignor from the original

consignment sale, an amount equal to that paid as a direct purchase from a third party, or the lower of cost of the inventory purchased and its net realizable value.

Shipping Services Revenue

The Company provides a service to ship purchased items to buyers and a service to ship items from buyers back to the Company. The Company determines itself to be the principal in this arrangement. The Company charges a fee to buyers for this service and has elected to treat shipping and handling activities performed as a separate performance obligation. For shipping services revenue, the Company's SSP is estimated using a market approach considering external and internal data points on the stand-alone sales price of the shipping service. All outbound shipping and handling costs for buyers are accounted for as cost of shipping services and recognized as the shipping activity occurs. The Company also generates shipping services revenue from the shipping fees for consigned products returned by buyers to the Company within policy. The Company recognizes shipping revenue and associated costs over time as the shipping activity occurs, which is generally one to three days after shipment.

Incentives

Incentives, which include platform-wide discounts and buyer incentives, may periodically be offered to buyers. Platform-wide discounts are made available to all buyers on the online marketplace. Buyer incentives apply to specific buyers and consist of coupons or promotions that offer credits in connection with purchases on the Company’s platform, and do not impact the commissions paid to consignors. These are treated as a reduction of consignment revenue and direct revenue. Additionally, the Company periodically offers commission exceptions to the standard consignment rates to consignors to optimize its supply. These are treated as a reduction of consignment revenue at the time of sale. The Company may offer a certain type of buyer incentive in the form of site credits to buyers on current transactions to be applied towards future transactions, which are included in other accrued and current liabilities on the condensed balance sheets.

Contract Liabilities

The Company’s contractual liabilities primarily consist of deferred revenue for material rights primarily related to the tiered consignor commission plan, which are recognized as revenue using a portfolio approach based on the pattern of exercise, and certain buyer incentives. Contract liabilities are recorded in other accrued and current liabilities on the balance sheets and are generally expected to be recognized within one year. Contract liabilities were immaterial as of March 31, 2024 and December 31, 2023.

Cost of Revenue

Cost of consignment revenue consist of credit card fees, packaging, customer service personnel-related costs, website hosting services, and consignor inventory adjustments relating to lost or damaged products. Cost of direct revenue consists of the cost of goods sold, credit card fees, packaging, customer service personnel-related costs, website hosting services, and inventory adjustments. Cost of shipping services revenue consists of the outbound shipping and handling costs to deliver purchased items to buyers, the shipping costs for consigned products returned by buyers to the Company within policy, and an allocation of the credit card fees associated with the shipping fee charged.

Stock-based Compensation

The Company incurs stock-based compensation expense from stock options, restricted stock units (“RSUs”), performance based restricted stock units (“PSUs”) subject to performance or market conditions, and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense related to employees and nonemployees is measured based on the grant-date fair value of the awards. The Company estimates the fair value of stock options granted and the purchase rights issued under the ESPP using the Black-Scholes option pricing model. The fair value of RSUs is estimated based on the fair market value of the Company’s common stock on the date of grant, which is determined based on the closing price of the Company’s common stock. Compensation expense is recognized in the statements of operations over the period during which the employee is required to perform services in exchange for the award (the vesting period of the applicable award) using the straight-line method for awards with only a service condition.

To determine the grant-date fair value of the Company's stock-based payment awards for PSUs subject to performance conditions, the quoted stock price on the date of grant is used. The stock-based compensation expense for PSUs with performance conditions is recognized based on the estimated number of shares that the Company expects will vest and is adjusted on a quarterly basis using the estimated achievement of financial performance targets. For PSUs subject to market

conditions, the grant-date fair value is determined using the Monte Carlo simulation model which utilizes multiple input variables to estimate the probability that market conditions will be achieved. These variables include the Company's expected stock price volatility over the expected term of the award, the risk-free interest rate for the expected term of the award, and expected dividends. For PSUs with market conditions, the stock-based compensation expense is recognized on a tranche by tranche basis over the requisite service period using the fair value derived from the Monte Carlo simulation model. The compensation expense will be recognized regardless of whether the market condition is ever satisfied, provided the requisite service period is satisfied. For all awards, the Company accounts for forfeitures as they occur.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents primarily consist of investments in short-term money market funds.

Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases and the Company’s credit cards. The Company had $14.9 million in restricted cash as of March 31, 2024 and December 31, 2023.


	March 31, 2024		December 31, 2023		March 31, 2023
Cash and cash equivalents	$	165,996	$	175,709	$	247,145
Restricted cash	14,910		14,914		—
Total cash, cash equivalents and restricted cash	$	180,906	$	190,623	$	247,145

Inventory, Net

Inventory consists of finished goods arising from goods returned after the title has transferred from the buyer to the Company as well as finished goods from direct purchases from vendors and consignors. The cost of inventory is an amount equal to that paid to the consignor or vendors. Inventory is valued at the lower of cost and net realizable value using the specific identification method and the Company records provisions, as appropriate, to write down obsolete and excess inventory to estimated net realizable value. After the inventory value is reduced, adjustments are not made to increase it from the estimated net realizable value. Additionally, inventory is recorded net of an allowance for shrinkage which represents the risk of physical loss of inventory. Provisions for inventory shrinkage are estimated based on historical experience and are adjusted based upon physical inventory counts. Provisions to write down inventory to net realizable value and provisions for inventory shrinkage were $1.1 million and $3.4 million during the three months ended March 31, 2024 and 2023, respectively.

Return reserves, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in other accrued and current liabilities on the condensed balance sheets and were $22.9 million and $22.2 million as of March 31, 2024 and December 31, 2023, respectively. Included in inventory on the Company’s condensed balance sheets are assets totaling $3.6 million and $5.2 million as of March 31, 2024 and December 31, 2023, respectively, for the rights to recover products from customers associated with its liabilities for return reserves.

Software Development Costs

Proprietary software includes the costs of developing the Company’s internal proprietary business platform and automation projects. The Company capitalizes qualifying proprietary software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed and (2) it is probable that the software will be completed and used for its intended function. Such costs are capitalized in the period incurred. Capitalization ceases and amortization begins when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Impairment of Long-lived Assets

The carrying amounts of long-lived assets, including right-of-use assets, property and equipment, net and capitalized proprietary software, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the

carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets to be held and used is measured by comparing the carrying amount of assets to future undiscounted net cash flows the assets are expected to generate over their remaining life.

If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the revised shorter useful life.

Leases

Contracts that have been determined to convey the right to use an identified asset are evaluated for classification as an operating or finance lease. For the Company’s operating leases, the Company records a lease liability based on the present value of the lease payments at lease inception, using the applicable incremental borrowing rate. The Company estimates the incremental borrowing rate by developing its own synthetic credit rating, corresponding yield curve, and the terms of each lease at the lease commencement date. The corresponding right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease. The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease. Operating lease right-of-use assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion are included on the Company’s condensed balance sheet.

The Company has elected the practical expedients that allows for the combination of lease components and non-lease components and to record short-term leases as lease expense on a straight-line basis on the condensed statements of operations. Variable lease payments are recorded as expense as they are incurred.

The Company has finance leases for vehicles and equipment, and the amounts of finance lease right-of-use assets and finance lease liabilities have been immaterial to date.

Debt

The Company initially recognizes incurred debt, net of any discounts, premiums and issuance costs related to the debt offering. All debt issuance costs are presented as a direct deduction from the related principal debt amounts on the balance sheet. Debt obligations due within 12 months are classified as current liabilities. Debt discounts, premiums and issuance costs are amortized to interest expense over the estimated life of the related debt using the effective interest method. When multiple instruments are issued in the same transaction, the Company allocates any issuance costs to the instruments on the same basis as the allocation of proceeds. Issuance costs allocated to instruments measured at fair value are expensed in the period incurred.

Capped Call Transactions

In June 2020 and March 2021, in connection with the issuance of its convertible senior notes, the Company entered into the capped call transactions (see Note 7). The capped call transactions are expected generally to reduce the potential dilution to the holders of the Company’s common stock upon any conversion of the convertible senior notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted convertible senior notes, with such reduction and/or offset subject to a cap based on the cap price. The Capped Calls (as defined below) are classified in stockholders’ equity as a reduction to additional paid-in capital and are not subsequently remeasured as long as the conditions for equity classification continue to be met. The Company monitors the conditions for equity classification, which continue to be met.

Concentrations of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, restricted cash and accounts receivable. At times, such amount may exceed federally-insured limits. The Company is closely monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally. The Company reduces credit risk by placing its cash, cash equivalents, restricted cash and investments with major financial institutions with high credit ratings within the United States. The Company has not experienced any realized losses on cash, cash equivalents and restricted cash to date; however, no assurances can be provided.

As of March 31, 2024 and December 31, 2023, there were no customers that represented 10% or more of the Company’s accounts receivable balance and there were no customers that individually exceeded 10% of the Company’s total revenue for each of the three months ended March 31, 2024 and 2023.

Recently Adopted Accounting Pronouncements

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s condensed financial statements and footnote disclosures, from those disclosed in the 2023 Annual Report on Form 10-K.

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Leases [Line Items]
Operating lease costs	$ 5.1	$ 7.1
Variable lease costs	1.5	1.3
Right-of-use asset impairment charge	$ 25.7	$ 25.7
Minimum
Leases [Line Items]
Operating lease term (in years)	1 year
Maximum
Leases [Line Items]
Operating lease term (in years)	15 years

Net Loss Per Share Attributable to Common Stockholders - Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator
Net loss attributable to common stockholders, basic	$ (31,101)	$ (82,500)
Net loss attributable to common stockholders, diluted	$ (31,101)	$ (82,500)
Denominator
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic (in shares)	105,212,053	99,608,071
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, diluted (in shares)	105,212,053	99,608,071
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.30)	$ (0.83)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.30)	$ (0.83)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (31,101)	$ (82,500)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	8,309	7,821
Stock-based compensation expense	7,120	8,991
Reduction of operating lease right-of-use assets	3,667	5,172
Bad debt expense	424	651
Non-cash interest expense	818	575
Issuance costs allocated to liability classified warrants	374	0
Accretion of debt discounts and issuance costs	581	633
Property, plant, equipment, and right-of-use asset impairments	0	32,891
Provision for inventory write-downs and shrinkage	1,149	3,446
Gain on debt extinguishment	(4,177)	0
Change in fair value of warrant liability	15,583	0
Other adjustments	(699)	36
Changes in operating assets and liabilities:
Accounts receivable, net	(3,017)	2,615
Inventory, net	(23)	8,678
Prepaid expenses and other current assets	2,993	(1,139)
Other assets	258	(461)
Operating lease liability	(4,916)	(6,158)
Accounts payable	133	(1,385)
Accrued consignor payable	(1,322)	(9,429)
Other accrued and current liabilities	385	(894)
Other noncurrent liabilities	(6)	24
Net cash used in operating activities	(3,467)	(30,433)
Cash flow from investing activities:
Capitalized proprietary software development costs	(3,180)	(4,214)
Purchases of property and equipment	(2,141)	(11,706)
Net cash used in investing activities	(5,321)	(15,920)
Cash flow from financing activities:
Proceeds from exercise of stock options	7	0
Taxes paid related to restricted stock vesting	(305)	(295)
Cash received from settlement of capped calls in conjunction with the Note Exchange	396	0
Issuance costs paid related to the Note Exchange	(1,027)	0
Net cash used in financing activities	(929)	(295)
Net decrease in cash, cash equivalents and restricted cash	(9,717)	(46,648)
Cash, cash equivalents and restricted cash
Beginning of period	190,623	293,793
End of period	180,906	247,145
Supplemental disclosures of cash flow information
Cash paid for interest	2,352	1,458
Cash paid for income taxes	7	4
Supplemental disclosures of non-cash investing and financing activities
Property and equipment additions not yet paid in cash	2,151	1,906
Capitalized proprietary software development costs additions not yet paid in cash	670	1,279
Stock-based compensation capitalized to proprietary software development costs	140	290
Liability classified warrants issued in connection with the Note Exchange	10,417	0
Net decrease in principal amount of debt due to the Note Exchange	(17,232)	0
Issuance costs associated with the Note Exchange included in accounts payable and other accrued and current liabilities	$ 4,232	$ 0

Share-based Compensation Plans - Schedule of Total Stock-based Compensation Expense by Function (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	$ 7,120	$ 8,991
Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	410	450
Operations and technology
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	2,304	3,691
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	$ 4,406	$ 4,850

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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+ Details

Cash and Cash Equivalents (Tables)

3 Months Ended

Mar. 31, 2024

Cash and Cash Equivalents [Abstract]

Summary of Estimated Value of Cash and Cash Equivalents


	March 31, 2024
	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash	$	23,029	$	—	$	—	$	23,029
Money market funds	142,967		—		—		142,967
Total cash and cash equivalents	$	165,996	$	—	$	—	$	165,996


	December 31, 2023
	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash	$	50,947	$	—	$	—	$	50,947
Money market funds	124,762		—		—		124,762
Total cash and cash equivalents	$	175,709	$	—	$	—	$	175,709

Net Loss Per Share Attributable to Common Stockholders - Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	37,950,952	38,991,927
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	1,083,475	1,723,850
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	18,490,842	18,261,493
Estimated shares issuable under the Employee Stock Purchase Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	139,842	260,261
Assumed conversion of the Convertible Senior Notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	10,342,056	18,746,323
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total (in shares)	7,894,737	0

Condensed Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022		99,088,172
Beginning balance at Dec. 31, 2022	$ (170,092)	$ 1	$ 781,060	$ (951,153)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares)		1,064,260
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes	(208)		(208)
Stock-based compensation expense	9,280		9,280
Net loss	(82,500)			(82,500)
Ending balance (in shares) at Mar. 31, 2023		100,152,432
Ending balance at Mar. 31, 2023	$ (243,520)	$ 1	790,132	(1,033,653)
Beginning balance (in shares) at Dec. 31, 2023	104,670,500	104,670,500
Beginning balance at Dec. 31, 2023	$ (303,299)	$ 1	816,325	(1,119,625)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Settlement of capped calls	396		396
Issuance of common stock upon exercise of options (in shares)		14,873
Issuance of common stock upon exercise of options	7		7
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares)		1,232,416
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes	(316)		(316)
Stock-based compensation expense	7,260		7,260
Net loss	$ (31,101)			(31,101)
Ending balance (in shares) at Mar. 31, 2024	105,917,789	105,917,789
Ending balance at Mar. 31, 2024	$ (327,053)	$ 1	$ 823,672	$ (1,150,726)

Non-convertible Notes, Net - Additional Information (Details) - USD ($)		3 Months Ended
	Feb. 29, 2024	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2021	Jun. 30, 2020
Debt Disclosure [Line Items]
Gain on extinguishment of debt		$ 4,177,000	$ 0
Issuance costs allocated to liability classified warrants	$ 400,000	374,000	$ 0
Senior Notes
Debt Disclosure [Line Items]
Gain on extinguishment of debt	4,200,000
2025 Convertible senior notes
Debt Disclosure [Line Items]
Aggregate principal amount		26,700,000			$ 172,500,000
Notes interest rate (in percent)					3.00%
2025 Convertible senior notes \| Senior Notes
Debt Disclosure [Line Items]
Aggregate principal amount exchanged	145,800,000
2028 Convertible senior notes
Debt Disclosure [Line Items]
Aggregate principal amount		281,000,000		$ 287,500,000
Notes interest rate (in percent)				1.00%
2028 Convertible senior notes \| Senior Notes
Debt Disclosure [Line Items]
Aggregate principal amount exchanged	6,500,000
Maturity threshold of debt outstanding	20,000,000
2028 Convertible senior notes \| Senior Notes \| Maximum
Debt Disclosure [Line Items]
Maturity threshold of debt outstanding	75,000,000
2029 Senior Notes \| Senior Notes
Debt Disclosure [Line Items]
Aggregate principal amount	$ 135,000,000
Payable-in-kind interest (in percent)	4.25%
Cash interest rate (percent)	8.75%
Notes interest rate (in percent)	13.00%
Paid-in-kind interest added to debt principal		$ 0
Debt instrument, interest rate, effective percentage (in percent)	13.35%
Liquidity threshold	$ 25,000,000
2029 Senior Notes \| Senior Notes \| March 1, 2025 to (but excluding) March 1, 2026
Debt Disclosure [Line Items]
Debt redemption price (percent)	113.00%
2029 Senior Notes \| Senior Notes \| March 1, 2026 to (but excluding) October 1, 2026
Debt Disclosure [Line Items]
Debt redemption price (percent)	106.50%
2029 Senior Notes \| Senior Notes \| October 1, 2026 and thereafter
Debt Disclosure [Line Items]
Debt redemption price (percent)	100.00%
2029 Senior Notes \| Senior Notes \| prior to March 1, 2025
Debt Disclosure [Line Items]
Percentage of debt principal that can be redeemed (percent)	100.00%
2029 Senior Notes \| Senior Notes \| any time and from time to time on or prior to March 1, 2025
Debt Disclosure [Line Items]
Debt redemption price (percent)	113.00%
Percentage of debt principal that can be redeemed (percent)	40.00%
Percentage of aggregate principal to remain outstanding (percent)	60.00%

Condensed Balance Sheet Components

3 Months Ended

Mar. 31, 2024

Balance Sheet Related Disclosures [Abstract]

Condensed Balance Sheet Components

Property and Equipment, Net

Property and equipment, net is recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives of the respective assets. Property and equipment, net consists of the following (in thousands):


	March 31, 2024		December 31, 2023
Proprietary software	$	46,545	$	44,964
Furniture and equipment	47,871		47,389
Automobiles	2,081		2,069
Leasehold improvements	86,145		84,138
Property and equipment, gross	182,642		178,560
Less: accumulated depreciation and amortization	(81,315)		(74,473)
Property and equipment, net	$	101,327	$	104,087

Depreciation and amortization expense on property and equipment was $8.2 million and $7.5 million for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2023, the Company recorded $7.2 million of impairment of leasehold improvements and disposal of fixed assets related to the closures of several of its office and retail locations as part of the savings plan the Company implemented. The Company did not record impairment of leasehold improvements or disposal of fixed assets related to the savings plan during the three months ended March 31, 2024.

Other Accrued and Current Liabilities

Other accrued and current liabilities consist of the following (in thousands):


	March 31, 2024		December 31, 2023
Returns reserve	$	22,859	$	22,204
Accrued compensation	18,173		20,086
Accrued sales tax and other taxes	8,019		8,118
Site credit and gift card liability	13,664		14,058
Accrued marketing and outside services	7,426		5,012
Accrued shipping	3,152		4,244
Deferred revenue	2,069		2,214
Other	7,166		6,749
Other accrued and current liabilities	$	82,528	$	82,685

Restructuring	3 Months Ended
Restructuring	Mar. 31, 2024
Restructuring and Related Activities [Abstract]
Restructuring	Restructuring In February 2023, the Company announced a savings plan to reduce its real estate presence and operating expenses through closure of certain retail and office locations and workforce reduction. For the three months ended March 31, 2023, the Company recognized $36.4 million in restructuring charges which consisted of right-of-use asset impairment charge of $25.7 million, leasehold improvements impairment charge of $7.2 million, employee severance of $1.7 million and other related charges of $1.8 million. The Company recorded an immaterial amount of restructuring charges for the three months ended March 31, 2024. The restructuring related charges were recorded on a separate line item in the Company's condensed statement of operations.

Convertible Senior Notes, Net - Additional Information (Details)	1 Months Ended		3 Months Ended		10 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares	Mar. 31, 2024 USD ($) day shares	Mar. 31, 2023 USD ($)	Mar. 31, 2021 USD ($) $ / shares	Mar. 03, 2021 $ / shares	Jun. 10, 2020 $ / shares
Debt Instrument [Line Items]
Cash received from settlement of capped calls in conjunction with the Note Exchange			$ 396,000	$ 0
Capped Call Transactions
Debt Instrument [Line Items]
Cash received from settlement of capped calls in conjunction with the Note Exchange					$ 400,000
2025 Convertible senior notes
Debt Instrument [Line Items]
Aggregate principal amount		$ 172,500,000	$ 26,700,000
Proceeds from issuance of 2025 and 2028 convertible senior notes, net of issuance costs		165,800,000
Purchase of capped call transactions		$ 22,500,000
Notes interest rate (in percent)		3.00%
Initial conversion rate		5.62635%
Initial conversion price (in dollars per share) \| $ / shares		$ 17.77
Notes, threshold percentage of stock price trigger (in percent)			130.00%
Notes, threshold trading days (in days) \| day			20
Notes, threshold consecutive trading days (in days) \| day			30
Percentage on aggregate principal amount of notes to be payable upon the event of default (in percent)			25.00%
Long-term debt			$ 26,498,000
Unamortized issuance costs			$ 300,000
Debt instrument, term (in years)			5 years
Effective interest rate (in percent)			3.74%
2025 Convertible senior notes \| Capped Call Transactions
Debt Instrument [Line Items]
Payment to counterparties for purchased calls		$ 22,500,000
Common stock subject to adjustment and exercisable upon conversion of initial notes (in shares) \| shares			9,705,454
Cap price of capped transactions (in dollars per share) \| $ / shares							$ 27.88
Cap price as percentage on common stock price per share (in percent)							100.00%
Closing price of common stock (in dollars per share) \| $ / shares							$ 13.94
Reduction to additional paid premium payments for capped call transactions		$ 22,500,000
Common stock outstanding included in the capped call transaction (in shares) \| shares		1,504,992
2025 Convertible senior notes \| Conversion Option One
Debt Instrument [Line Items]
Notes, threshold percentage of stock price trigger (in percent)			130.00%
Notes, threshold trading days (in days) \| day			20
Notes, threshold consecutive trading days (in days) \| day			30
2025 Convertible senior notes \| Conversion Option Two
Debt Instrument [Line Items]
Notes, threshold percentage of stock price trigger (in percent)			98.00%
Notes, threshold trading days (in days) \| day			5
Notes, threshold consecutive trading days (in days) \| day			5
2028 Convertible senior notes
Debt Instrument [Line Items]
Aggregate principal amount	$ 287,500,000		$ 281,000,000		$ 287,500,000
Proceeds from issuance of 2025 and 2028 convertible senior notes, net of issuance costs	278,100,000
Purchase of capped call transactions	$ 33,700,000
Notes interest rate (in percent)	1.00%				1.00%
Initial conversion rate	3.14465%
Initial conversion price (in dollars per share) \| $ / shares	$ 31.80				$ 31.80
Long-term debt			275,826,000
Unamortized issuance costs			$ 5,200,000
Debt instrument, term (in years)			7 years
Effective interest rate (in percent)			1.45%
2028 Convertible senior notes \| Capped Call Transactions
Debt Instrument [Line Items]
Payment to counterparties for purchased calls	$ 33,700,000
Common stock subject to adjustment and exercisable upon conversion of initial notes (in shares) \| shares			9,040,869
Cap price of capped transactions (in dollars per share) \| $ / shares						$ 48.00
Cap price as percentage on common stock price per share (in percent)						100.00%
Closing price of common stock (in dollars per share) \| $ / shares						$ 24.00
Reduction to additional paid premium payments for capped call transactions	$ 33,700,000
Common stock outstanding included in the capped call transaction (in shares) \| shares	8,837,095

Convertible Senior Notes, Net - Amounts Recorded in Interest Expense Related to Notes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
2025 Convertible senior notes
Debt Disclosure [Line Items]
Contractual interest expense	$ 929	$ 1,294
Amortization of debt issuance costs	229	308
Total interest and amortization expense	1,158	1,602
2028 Convertible senior notes
Debt Disclosure [Line Items]
Contractual interest expense	713	719
Amortization of debt issuance costs	327	325
Total interest and amortization expense	$ 1,040	$ 1,044

Commitments and Contingencies - Additional Information (Details) - Class Actions Complaint Filed In San Mateo County, California $ in Millions			12 Months Ended
	Oct. 31, 2022 plaintiff	Jul. 28, 2022 USD ($) plaintiff	Dec. 31, 2021 USD ($)
Other Commitments [Line Items]
Litigation settlement, amount awarded to other party \| $		$ 11.0
Payment period for amount awarded to other party (in days)		30 days
Litigation settlement \| $			$ 11.0
Loss contingency, number of plaintiffs opting out \| plaintiff		1
Loss contingency, number of plaintiffs opting out or purchased stock \| plaintiff	2

Non-convertible Notes, Net (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of Future Minimum Payments Under Notes

A schedule of the Company's future maturities for the 2029 Notes with interest components included in principal, is as follows (in thousands):


	Amount
Fiscal Year	2029 Notes
2024 through 2028	$	—




2029	166,592
Total expected payments at maturity	166,592
Less unamortized debt issuance costs and debt premium, net	(3,801)
Less amounts related to PIK interest	(31,592)
Net carrying amount	$	131,199


	Amount
Fiscal Year	2025 Notes		2028 Notes
2024	$	—	$	—
2025	26,749		—
2026	—		—
2027	—		—
2028	—		281,019
Total principal payments	26,749		281,019
Less unamortized debt issuance costs	(251)		(5,193)
Net carrying amount	$	26,498	$	275,826

Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Leases [Abstract]
Remainder of 2023	$ 20,876
2025	28,070
2026	27,907
2027	24,104
2028	21,377
Thereafter	19,995
Total future minimum payments	142,329
Less: Imputed interest	(20,286)
Present value of operating lease liabilities	$ 122,043

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024 shares
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On March 7, 2024, Rob Krolik, a member of the Company’s Board of Directors, adopted a new trading plan for the sale of securities that is intended to satisfy the affirmative defense conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Krolik Plan”). The Krolik Plan provides for the sale of up to a maximum of 74,949 shares of the Company’s common stock that he has received or will receive following the vesting of restricted stock units. The first possible trade date under the Krolik Plan is June 6, 2024, and the end date of the Krolik Plan is March 7, 2025, subject to certain conditions.
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Rob Krolik [Member]
Trading Arrangements, by Individual
Name	Rob Krolik
Title	Board of Directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	March 7, 2024
Arrangement Duration	274 days
Aggregate Available	74,949

Non-convertible Notes, Net - Schedule of Future Minimum Payments Under Notes (Details) - 2029 Senior Notes $ in Thousands	Mar. 31, 2024 USD ($)
Debt Disclosure [Line Items]
2024	$ 0
2025	0
2026	0
2027	0
2028	0
2029	166,592
Total principal payments	166,592
Less unamortized debt issuance costs and debt premium, net	(3,801)
Less amounts related to PIK interest	(31,592)
Net carrying amount	$ 131,199

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Noncancelable Purchase Commitments The Company has commitments for cloud services and other services in the ordinary course of business with varying expiration terms through 2027. As of March 31, 2024, there were no material changes to the Company’s noncancelable purchase commitments disclosed in the financial statements in the Annual Report on Form 10-K. Contingencies From time to time, the Company is subject to, and it is presently involved in, litigation and other legal proceedings and from time to time, the Company receives inquiries from government agencies. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses material contingencies when a loss is not probable but reasonably possible. On November 14, 2018, Chanel, Inc. sued the Company in the U.S. District Court for the Southern District of New York. The Complaint alleged federal and state law claims of trademark infringement, unfair competition, and false advertising. On February 1, 2019, Chanel, Inc. filed its First Amended Complaint that included substantially similar claims against the Company. On March 4, 2019, the Company filed a Motion to Dismiss the First Amended Complaint, which was granted in part and dismissed in part on March 30, 2020. The surviving claims against the Company include trademark infringement under 15 U.S.C. § 1114, false advertising under 15 U.S.C. § 1125, and unfair competition under New York common law. On May 29, 2020, the Company filed its Answer to the Amended Complaint. On November 3, 2020, the Company sought leave to amend its Answer to assert counterclaims against Chanel, Inc. for violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, the Donnelly Act, N.Y. Gen. Bus. Law. § 340, and New York common law. The motion for leave to amend was granted on February 24, 2021. On February 25, 2021, the Company filed its First Amended Answer, Affirmative Defenses and Counterclaims against Chanel. The Company’s Counterclaims allege violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, the Donnelly Act, N.Y. Gen. Bus. Law. § 340, and New York common law. On March 18, 2021, Chanel moved to dismiss the Company’s Counterclaims and moved to strike the Company’s unclean hands affirmative defense. Decisions on Chanel’s motion to dismiss and motion strike are pending. The parties agreed to a stay in April 2021 to engage in settlement discussions. After several mediation sessions, the parties were unable to reach a resolution, and the stay was lifted in November 2021. Chanel then sought a partial stay of discovery on the Company's counterclaims and unclean hands defense while Chanel's motion to dismiss and strike those claims are pending, and on March 10, 2022, the Court granted Chanel's request. Since then, the parties have continued to engage in fact discovery regarding Chanel's counterfeiting and false advertising claims against the Company. Fact discovery was scheduled to be completed by August 15, 2023, however, on July 19, 2023, the Court ordered a stay of the case at the parties’ request to enable the parties to attempt mediation again. The mediation scheduled to begin on October 24, 2023 was postponed, and the parties are working to reschedule it in 2024. The final outcome of this litigation, including our liability, if any, with respect to Chanel’s claims, is uncertain. An unfavorable outcome in this or similar litigation could adversely affect the Company’s business and could lead to other similar lawsuits. The Company is not able to predict or reasonably estimate the ultimate outcome or possible losses relating to this claim. Beginning on September 10, 2019, purported shareholder class action complaints were filed against the Company, its officers and directors and the underwriters of its IPO in the San Mateo Superior Court, Marin County Superior Court, and the United States District Court for the Northern District of California. On July 27, 2021, the Company reached an agreement in principle to settle the shareholder class action. On November 5, 2021, plaintiff filed the executed stipulation of settlement and motion for preliminary approval of the settlement with the federal court. On March 24, 2022, the court entered an order preliminarily approving the settlement. On July 28, 2022, the court entered an order finally approving the settlement and dismissing the case. The financial terms of the stipulation of settlement provide that the Company will pay $11.0 million within thirty (30) days of the later of preliminary approval of the settlement or plaintiff’s counsel providing payment instructions. The Company paid the settlement amount on March 29, 2022 with available resources and recorded approximately $11.0 million for the year ended December 31, 2021 under our Operating expenses as a Legal settlement. One of the plaintiffs in the Marin County case opted out of the federal settlement and is pursuing the claim in Marin County Superior Court. The stay of the state court case has been lifted, and the opt out plaintiff filed an amended complaint on October 31, 2022 alleging putative class claims under the Securities Act of 1933 (the “Securities Act”) on behalf of the two shareholders who opted out of the settlement and those who purchased stock from November 21, 2019 through March 9, 2020, based on purported new revelations. The claims are for alleged violations of Sections 11 and 15 of the Securities Act. On February 23, 2024, plaintiff filed a motion for class certification, which has been set for hearing on July 30, 2024. While the Company intends to defend vigorously against this litigation, there can be no assurance that the Company will be successful in its defense. For this reason, the Company cannot currently estimate the loss or range of possible losses it may experience in connection with this litigation. Indemnifications In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties and other liabilities relating to or arising from the Company's various services, or its acts or omissions. The Company has not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in its financial statements.

Cash and Cash Equivalents - Summary of Estimated Value of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	$ 165,996	$ 175,709	$ 247,145
Money market funds	165,996	175,709
Cash
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	23,029	50,947
Money market funds	23,029	50,947
Money market funds
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	142,967	124,762
Money market funds	$ 142,967	$ 124,762

Convertible Senior Notes, Net

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Convertible Senior Notes, Net

In June 2020, the Company issued an aggregate principal of $172.5 million of its 2025 Notes, pursuant to an indenture, in a private offering to qualified institutional buyers. The 2025 Notes will mature on June 15, 2025, unless earlier redeemed or repurchased by the Company or converted. In February 2024, certain of the 2025 Notes were extinguished in connection with the Note Exchange (see Note 6 — Non-convertible Notes, Net).

At issuance, the Company received net proceeds from the 2025 Notes offering of approximately $165.8 million, after deducting the initial purchasers’ discount and commission and offering expenses. The Company used approximately $22.5 million of the net proceeds from the 2025 Notes offering to fund the net cost of entering into the capped call transactions described below. The Company intends to use the remainder of the net proceeds for general corporate purposes.

In March 2021, the Company issued an aggregate principal of $287.5 million of its 2028 Notes, pursuant to an indenture, in a private offering to qualified institutional buyers. The 2028 Notes will mature on March 1, 2028, unless earlier redeemed or repurchased by the Company or converted. In February 2024, certain of the 2028 Notes were extinguished in connection with the Note Exchange (see Note 6 — Non-convertible Notes, Net).

At issuance, the Company received net proceeds from the 2028 Notes offering of approximately $278.1 million, after deducting the initial purchasers’ discount and commission and offering expenses. The Company used approximately $33.7 million of the net proceeds from the 2028 Notes offering to fund the net cost of entering into the capped call transactions described below. The Company intends to use the remainder of the net proceeds for general corporate purposes.

The 2025 Notes accrue interest at a rate of 3.00% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The initial conversion rate applicable to the 2025 Notes is 56.2635 shares of common stock per $1,000 principal amount of 2025 Notes (which is equivalent to an initial conversion price of approximately $17.77 per share of the Company’s common stock). The 2028 Notes accrue interest at a rate of 1.00% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021. The initial conversion rate applicable to the 2028 Notes is 31.4465 shares of common stock per $1,000 principal amount of 2028 Notes (which is equivalent to an initial conversion price of approximately $31.80 per share of the Company’s common stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a corporate event, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Senior Notes in connection with such corporate event.

The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after June 20, 2023, and the 2028 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 5, 2025, in each case if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the

related redemption notice. In addition, calling any Note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.

Prior to March 15, 2025, in the case of the 2025 Notes, and December 1, 2027, in the case of the 2028 Notes, the applicable Convertible Senior Notes will be convertible only under the following circumstances:

•During any calendar quarter (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds 130% of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

•During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of Convertible Senior Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day;

•Upon the occurrence of specified corporate transactions; or

•If the Company calls any Convertible Senior Notes for redemption.

On and after March 15, 2025, in the case of the 2025 Notes, and December 1, 2027, in the case of the 2028 Notes, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their Convertible Senior Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the Convertible Senior Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. It is the Company’s current intent to settle conversions of the 2025 Notes and the 2028 Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. The conditions allowing holders of either the 2025 Notes or the 2028 Notes to convert were not met as of March 31, 2024.

The Convertible Senior Notes are unsecured and unsubordinated obligations of the Company and will rank senior in right of payment to any of future indebtedness of the Company that is expressly subordinated in right of payment to the Convertible Senior Notes; rank equal in right of payment to any existing and future unsecured indebtedness of the Company that is not so subordinated; be effectively subordinated in right of payment to any secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness; and be structurally subordinated to all existing and future indebtedness and other liabilities and obligations incurred by future subsidiaries of the Company.

If bankruptcy, insolvency, or reorganization occurs with respect to the Company (and not solely with respect to a significant subsidiary of the Company), then the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes and 2028 Notes then outstanding will immediately become due and payable without any further action or notice by any person. If an event of default (other than bankruptcy, insolvency, or reorganization with respect to the Company and not solely with respect to a significant subsidiary of the Company) occurs and is continuing, then, with the exception of certain reporting events of default, the trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of 2025 Notes or 2028 Notes, as applicable, then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes or 2028 Notes, as applicable, the outstanding to become due and payable immediately.

The carrying amount of the 2025 Notes is $26.5 million as of March 31, 2024, with principal of $26.7 million, net of unamortized issuance costs of $0.3 million. The 2025 Notes were classified as long term liabilities as of March 31, 2024. The issuance costs related to the 2025 Notes are being amortized to interest expense over the expected life of the 2025 Notes or approximately its five-year term at an effective interest rate of 3.74%. The carrying amount of the 2028 Notes is $275.8 million as of March 31, 2024, with principal of $281.0 million, net of unamortized issuance costs of $5.2 million. The 2028 Notes were classified as long term liabilities as of March 31, 2024. The issuance costs related to the 2028 Notes are being amortized to interest expense over the expected life of the 2028 Notes or approximately its seven-year term at an effective interest rate of 1.45%.

The following tables set forth the amounts recorded in interest expense related to the 2025 Notes as of the dates indicated (in thousands):


	Three Months Ended March 31,
	2024		2023
Contractual interest expense	$	929	$	1,294
Amortization of debt issuance costs	229		308
Total interest and amortization expense	$	1,158	$	1,602

The following tables set forth the amounts recorded in interest expense related to the 2028 Notes as of the dates indicated (in thousands):


	Three Months Ended March 31,
	2024		2023
Contractual interest expense	$	713	$	719
Amortization of debt issuance costs	327		325
Total interest and amortization expense	$	1,040	$	1,044

A schedule of the Company's future maturities for the 2025 and 2028 Notes, is as follows (in thousands):


	Amount
Fiscal Year	2025 Notes		2028 Notes
2024	$	—	$	—
2025	26,749		—
2026	—		—
2027	—		—
2028	—		281,019
Total principal payments	26,749		281,019
Less unamortized debt issuance costs	(251)		(5,193)
Net carrying amount	$	26,498	$	275,826

Capped Call Transactions with Respect to the 2025 Notes and 2028 Notes

In connection with the issuance of the 2025 Notes and 2028 Notes, including the initial purchasers’ exercise of the option to purchase additional 2025 Notes and 2028 Notes, the Company entered into capped call transactions with respect to its common stock with certain financial institutions (collectively, the “Counterparties”). The Company paid an aggregate amount of approximately $22.5 million to the Counterparties in connection with the 2025 capped call transactions (the "2025 Capped Calls") and $33.7 million to the Counterparties in connection with the 2028 capped call transactions and (the "2028 Capped Calls" and, together with the 2025 Capped Calls, the "Capped Calls"). The 2025 Capped Calls and 2028 Capped Calls initially covered approximately 9,705,454 shares and 9,040,869 shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the 2025 Notes and the 2028 Notes, respectively. The 2025 Capped Calls and the 2028 Capped Calls are subject to anti-dilution adjustments that are intended to be substantially identical to those in the 2025 Notes and the 2028 Notes, as applicable, and are exercisable upon conversion of the 2025 Notes or the 2028 Notes, as applicable. The Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offer and announcement events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. The 2025 Capped Calls settle in components commencing on April 16, 2025 with the last component scheduled to expire on June 12, 2025. The 2028 Capped Calls settle in components commencing on December 31, 2027 with the last component scheduled to expire on February 28, 2028.

The cap price of the 2025 Capped Call is initially $27.88 per share, which represents a premium of 100.0% over the closing price of the Company’s common stock of $13.94 per share on June 10, 2020, and is subject to certain adjustments under the terms of the capped call transactions. The cap price of the 2028 Capped Call is initially $48.00 per share, which represents a premium of 100.0% over the closing price of the Company’s common stock of $24.00 per share on March 3, 2021, and is subject to certain adjustments under the terms of the capped call transactions. The Company expects to receive from the Counterparties a number of shares of the Company’s common stock or, at the Company’s election (subject to certain

conditions), cash, with an aggregate market value (or, in the case of cash settlement, in an amount) approximately equal to the product of such excess times the number of shares of the Company’s common stock relating to the 2025 and 2028 Capped Calls being exercised.

These Capped Call instruments meet the conditions outlined in ASC 815-40 to be classified in stockholders’ equity, are not accounted for as derivatives, and are not subsequently remeasured as long as the conditions for equity classification continue to be met. The Company recorded a reduction to additional paid-in capital of approximately $22.5 million and $33.7 million related to the premium payments for the 2025 Capped Call and 2028 Capped Call transactions.

In connection with the Note Exchange, the Company received $0.4 million in cash in connection with settling certain Capped Calls. After giving effect to such settlements, the 2025 Capped Calls and 2028 Capped Calls outstanding cover approximately 1,504,992 and 8,837,095 shares of the Company's common stock, respectively. As the Capped Calls were equity classified, the proceeds from settlement of these Capped Calls were recorded to additional paid in capital.

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 01, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-38953
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-1234222
Entity Address, Address Line One	55 Francisco Street
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94133
City Area Code	855
Local Phone Number	435-5893
Title of 12(b) Security	Common stock, $0.00001 par value
Trading Symbol	REAL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		105,969,185
Entity Registrant Name	TheRealReal, Inc.
Entity central index key	0001573221
Current fiscal year end date	--12-31
Document fiscal year focus	2024
Document fiscal period focus	Q1
Amendment flag	false

Restructuring (Details) - USD ($) $ in Thousands	3 Months Ended
Restructuring (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 196	$ 36,388
Right-of-use asset impairment charge	25,700	25,700
Leasehold improvements impairment charge	$ 0	7,200
Employee severance		1,700
Other related charges		$ 1,800