1stDibs makes strides with revenue, order growth in Q3
During a quarter that saw net revenue and orders rise, 1stDibs eliminated auctions and retired its essential seller program.
NEW YORK — Online luxury marketplace 1stDibs marked its second consecutive quarter of growth in the third quarter, booking a 3% year-over-year increase with net revenue of $21.2 million.
The company also achieved growth in number of orders for the quarter ended Sept. 30, with orders up 7% to 33,000.
Gross profit, at $15 million, was down 1% year-over-year, and gross margin fell as well, ending the period at 71% vs. 73.3% in the third quarter of 2023. Non-GAAP adjusted EBITDA and adjusted EBITDA margin was a loss of $3 million, down 14.1% vs. a $1.8 million loss, down 8.7% in the same quarter a year ago.
“Our third quarter results reflect the progress we are making across key operational metrics, including two consecutive quarters of growth in both revenue and orders and sequential improvement in active buyers,” said David Rosenblatt, CEO. “Despite ongoing challenges in the luxury housing market, our focus on conversion is proving effective and we remain on track to return to GMV growth in the fourth quarter.”
GMV for the third quarter was $84.6 million, down 5% year over year, while active buyers decreased by 1% to about 63,000.
“We are making strategic decisions to align our resources with what matters most: sustainable growth and profitability,” said Tom Etergino, chief financial officer. “Looking forward, we will continue to review the business to identify opportunities to improve efficiency and drive operating leverage.”
During the company’s earnings call, Rosenblatt noted 1stDibs took two steps during Q3 — discontinuing auctions and retiring its essential buyers program — to redeploy resources.
Auctions accounted for about 5% to 6% of orders and just 2% of revenue, he said. “It’s a positive reallocation of capital,” said Rosenblatt.
Regarding the essential buyer program, participants — who had a zero-fee subscription option — were less engaged than subscription fee sellers, said Rosenblatt, so the decision was made to terminate the essential buyer program and convert its members to fee-paying sellers.
Fourth quarter guidance for 1stDibs puts GMV in the $86 million to $93 million range and net revenue between $21.4 million and $22.7 million. Non-GAAP adjusted EBITDA margin is forecast to be down 13% to 17%.
Etergino said he expects soft demand to continue and be reflected in the fourth quarter, which has the one-time impacts of the election cycle and a shortened holiday buying season.
Asked about the impact of the slow housing market, Rosenblatt said while 1stDibs follows luxury housing and credit card data on luxury furnishings, which are down about 8%, the company’s numbers have been stronger.
“Our goal is to try to grow faster than the market and take share,” he said. “If we get a market recovery that is a plus, but we don’t expect one.”
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