1stDibs Reports Fourth Quarter and Full Year 2021 Financial Results

Q4 Gross Merchandise Value Increased 11% Year-Over-Year to $117 million
Q4 Net Revenue Increased 13% Year-Over-Year to $26.9 million

NEW YORK, March 01, 2022 (GLOBE NEWSWIRE) -- 1stdibs.com, Inc. (NASDAQ: DIBS), a leading online marketplace for luxury design products, today reported financial results for its fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights

• Net revenue was $26.9 million, an increase of 13% year-over-year.
• Gross profit was $16.6 million, a decrease of 3% year-over-year.
• Gross margin was 61.7%, compared to 72.0% in the fourth quarter 2020.
• GAAP net loss was $8.1 million, compared to $1.6 million in the fourth quarter 2020.
• Non-GAAP Adjusted EBITDA and Adjusted EBITDA Margin was $(6.7) million and (25.0)%, respectively, compared to $(0.9) million and (3.7)%, respectively, in the fourth quarter 2020.
• Cash and cash equivalents totaled $168.2 million as of December 31, 2021.
  

Full Year 2021 Financial Highlights

• Net revenue was $102.7 million, an increase of 25% year-over-year.
• Gross profit was $70.6 million, an increase of 26% year-over-year.
• Gross margin was 68.7%, compared to 68.3% in the year ended December 31, 2020.
• GAAP net loss was $21.0 million, compared to $12.5 million in the year ended December 31, 2020.
• Non-GAAP Adjusted EBITDA and Adjusted EBITDA Margin was $(16.5) million and (16.1)%, respectively, compared to $(6.6) million and (8.1)%, respectively, in the year ended December 31, 2020.

“2021 was a strong year for 1stDibs. We became a public company, launched two new offerings which represent meaningful long-term growth opportunities, and delivered strong financial results,” said David Rosenblatt, 1stDibs Chief Executive Officer. “Strong marketplace fundamentals and progress with past initiatives give us the confidence to invest in growth. There’s no other online marketplace with our breadth of unique, one-of-a-kind luxury design. Looking ahead, we’re well positioned to benefit from the continued shift to digital, the extensibility of our platform, and the buyer and seller trust we’ve built over the past two decades.”

Tu Nguyen, Chief Financial Officer of 1stDibs said, "In 2021 we grew the marketplace and delivered strong results with GMV growing 31% year-over-year. We enter 2022 on solid footing and with a strong roadmap. Given the opportunity ahead of us, we will prioritize thoughtful investments in growth while continuing to nurture trust and enhance our core buyer and seller experience."

Other Recent Business Highlights and Fourth Quarter Key Operating Metrics

• Gross Merchandise Value ("GMV") was $117 million, an increase of 11% year-over-year.
• Number of Orders was approximately 40K, an increase of 3% year-over-year.
• Active Buyers was approximately 72K, an increase of 25% year-over-year.
  

Financial Guidance and Outlook

The company’s first quarter 2022 guidance is based upon our best view today.

	Q1 2022 Guidance
GMV	$113.5 million - $117.5 million
Net revenue	$26.4 million - $27.0 million
Adjusted EBITDA margin (non-GAAP)	(23%) - (21%)

Actual results may differ materially from our Financial Guidance and Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.

A reconciliation of our non-GAAP guidance measure (adjusted EBITDA) to a corresponding GAAP guidance measure is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation expense is impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this press release.

Webcast Information

1stDibs will host a webcast to discuss its fourth quarter and full year 2021 financial results today at 5:00 p.m. Eastern Time. Investors and participants can access the webcast at the 1stDibs Investor Relations website (investors.1stdibs.com). A replay of the webcast will be available through the same link following the webcast, for one year thereafter.

Disclosure Information

In compliance with disclosure obligations under Regulation FD, 1stDibs announces material information to the public through a variety of means, including filings with the Securities and Exchange Commission, press releases, company blog posts, public conference calls and webcasts, as well as the investor relations website.

About 1stDibs

1stDibs is a leading online marketplace for connecting design lovers with highly coveted sellers and makers of vintage, antique, and contemporary furniture, home décor, art, jewelry, watches and fashion.

Media Contact:

Jennifer Miller

jennifer.miller@1stdibs.com

Investor Relations Contact:

Kevin LaBuz

investors@1stdibs.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal and state securities laws. All statements other than statements of historical fact contained in this press release, including, but not limited to, statements regarding our product roadmap, opportunities to grow our new verticals, expand geographically, and enhance our marketplace for buyers and sellers, our intent to continue to invest for sustainable growth in a disciplined manner and anticipated returns on those investments; our future results of operations and financial position, including our financial guidance and outlook, and the impact of the coronavirus (COVID-19) pandemic and our response to it, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue," or “opportunity” or the negative of these terms or other similar expressions.

Forward-looking statements are based on current expectations of future events. We cannot guarantee that any forward-looking statement will be accurate, although we believe that we have been reasonable in our expectations and assumptions. Investors should realize that if underlying assumptions prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

A list and description of risks, uncertainties and other factors that could cause or contribute to differences in our results can be found in our filings with the Securities and Exchange Commission, including the final prospectus relating to our initial public offering and our periodic reports. We qualify all of our forward-looking statements by these cautionary statements.

Key Operating Metrics Definitions

Gross Merchandise Value

We define GMV as the total dollar value from items sold by our sellers through 1stDibs in a given month, minus cancellations within that month, and excluding shipping and sales taxes. GMV includes all sales reported to us by our sellers, whether transacted through the 1stDibs marketplace or reported as an offline sale. We view GMV as a measure of the total economic activity generated by our online marketplace, and as an indicator of the scale and growth of our online marketplace and the health of our ecosystem. Our historical growth rates for GMV may not be indicative of future growth rates in GMV.

Number of Orders

We define Number of Orders as the total number of orders placed or reported through the 1stDibs marketplace in a given month, minus cancellations within that month. Our historical growth rates for Number of Orders may not be indicative of future growth rates in Number of Orders.

Active Buyers

We define Active Buyers as buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations. A buyer is identified by a unique email address; thus an Active Buyer could have more than one account if they were to use a separate unique email address to set up each account. We believe this metric reflects scale, engagement and brand awareness, and our ability to convert user activity on our online marketplace into transactions. Our historical growth rates for Active Buyers may not be indicative of future growth rates in new Active Buyers.

1STDIBS.COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
(Unaudited)

	December 31, 2021				December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	168,226			$	54,862
Accounts receivable, net of allowance for doubtful accounts of $29 and $51 at December 31, 2021 and 2020, respectively		701				887
Prepaid expenses		3,951				1,603
Receivables from payment processors		2,142				3,052
Other current assets		867				3,665
Total current assets		175,887				64,069
Property and equipment, net		4,459				5,136
Goodwill		7,202				7,212
Intangible assets, net		1,164				1,352
Other assets		3,542				3,573
Total assets	$	192,254			$	81,342
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	4,729			$	4,548
Payables due to sellers		10,225				4,493
Accrued expenses		13,745				9,452
Other current liabilities		3,512				4,918
Total current liabilities		32,211				23,411
Other liabilities		2,605				3,352
Total liabilities		34,816				26,763
Commitments and contingencies
Redeemable convertible preferred stock (Series A, B, C, C-1, and D), $0.01 par value; zero and 57,771,864 shares authorized as of December 31, 2021 and 2020, respectively; zero and 19,243,795 shares issued and outstanding as of December 31, 2021 and 2020, respectively; and aggregate liquidation preference of zero and $301,300 as of December 31, 2021 and 2020, respectively		—				298,525
Stockholders’ equity (deficit):
Preferred stock, $0.01 par value; 10,000,000 and zero shares authorized as of December 31, 2021 and 2020, respectively; zero shares issued and outstanding as of December 31, 2021 and 2020		—				—
Common stock, $0.01 par value; 400,000,000 and 105,767,092 shares authorized as of December 31, 2021 and 2020, respectively; 38,000,086 and 11,376,048 shares issued as of December 31, 2021 and 2020, respectively; and 37,991,529 and 11,376,048 shares outstanding as of December 31, 2021 and 2020, respectively		380				114
Additional paid-in capital		425,769				—
Accumulated deficit		(268,482	)			(243,858	)
Accumulated other comprehensive loss		(229	)			(202	)
Total stockholders’ equity (deficit)		157,438				(243,946	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	192,254			$	81,342

1STDIBS.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
(Unaudited)

	Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
Net revenue	$	26,930			$	23,874			$	102,731			$	81,863
Cost of revenue		10,306				6,685				32,167				25,948
Gross profit		16,624				17,189				70,564				55,915
Operating expenses:
Sales and marketing		11,762				10,489				47,414				36,526
Technology development		5,849				4,126				19,110				16,510
General and administrative		6,064				3,456				21,293				12,565
Provision for transaction losses		1,405				1,164				5,191				3,820
Total operating expenses		25,080				19,235				93,008				69,421
Loss from operations		(8,456	)			(2,046	)			(22,444	)			(13,506	)
Other income (expense), net:
Interest income		54				16				146				194
Interest expense		(4	)			(4	)			(16	)			(14	)
Other, net		340				452				1,372				809
Total other income (expense), net		390				464				1,502				989
Net loss before income taxes		(8,066	)			(1,582	)			(20,942	)			(12,517	)
Provision for income taxes		(21	)			(8	)			(21	)			(11	)
Net loss		(8,087	)			(1,590	)			(20,963	)			(12,528	)
Accretion of redeemable convertible preferred stock to redemption value		—				(3,863	)			(7,061	)			(15,095	)
Net loss attributable to common stockholders	$	(8,087	)		$	(5,453	)		$	(28,024	)		$	(27,623	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.21	)		$	(0.49	)		$	(1.08	)		$	(2.50	)
Weighted average common shares outstanding—basic and diluted		37,908,878				11,086,794				26,059,744				11,034,620

1STDIBS.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

	Year Ended December 31,
		2021				2020
Cash flows from operating activities:
Net loss	$	(20,963	)		$	(12,528	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,112				6,023
Stock-based compensation expense		2,839				846
Change in fair value of deferred acquisition consideration		427				134
Provision for transaction losses and eCommerce returns		428				630
Amortization of costs to obtain revenue contracts		447				487
Deferred rent		(194	)			(2,837	)
Other, net		21				(11	)
Changes in operating assets and liabilities:
Accounts receivable		52				(652	)
Prepaid and other current assets		(1,145	)			359
Receivables from payment processors		910				553
Other assets		(145	)			(163	)
Accounts payable and accrued expenses		5,055				2,219
Payables due to sellers		5,732				1,592
Other current liabilities and other liabilities		(977	)			(95	)
Net cash used in operating activities		(4,401	)			(3,443	)
Cash flows from investing activities:
Development of internal-use software		(2,110	)			(1,782	)
Proceeds from repayment of notes receivable with related party		—				3,112
Purchases of property and equipment		(129	)			(44	)
Other, net		(30	)			—
Net cash (used in) provided by investing activities		(2,269	)			1,286
Cash flows from financing activities:
Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions		122,993				—
Proceeds from exercise of stock options		2,729				2,010
Payment of deferred acquisition consideration		(640	)			—
Payment of deferred offering costs		(5,032	)			(448	)
Net cash provided by financing activities		120,050				1,562
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(16	)			(14	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		113,364				(609	)
Cash, cash equivalents, and restricted cash at beginning of the period		58,195				58,804
Cash, cash equivalents, and restricted cash at end of the period	$	171,559			$	58,195

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

In this press release, we provide Adjusted EBITDA, a non-GAAP financial measure that represents our net loss adjusted to exclude: (1) depreciation and amortization; (2) stock-based compensation expense; (3) other income (expense), net; and (4) provision for income taxes. We also provide Adjusted EBITDA Margin, a non-GAAP financial measure that presents Adjusted EBITDA divided by net revenue. Below is a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures, because they are key measures used by our management team to help us to assess our operating performance and the operating leverage in our business. We also use these measures to analyze our financial results, establish budgets and operational goals for managing our business, and make strategic decisions. We believe that Adjusted EBITDA and Adjusted EBITDA Margin help identify underlying trends in our business that could otherwise be masked by the effect of the income and expenses that we exclude from Adjusted EBITDA and Adjusted EBITDA Margin. Accordingly, we believe that these metrics provide useful information to investors and others in understanding and evaluating our results of operations, enhances the overall understanding of our past performance and future prospects, and allows for greater transparency with respect to key financial metrics used by our management in their financial and operational decision-making. We also believe that the presentation of these non-GAAP financial measures provides an additional tool for investors to use in comparing our core business and results of operations over multiple periods with other companies in our industry, many of which present similar non-GAAP financial measures to investors, and to analyze our cash performance.

The non-GAAP financial measures presented may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. The non-GAAP financial measures presented should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with GAAP. Further, these non-GAAP financial measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. Accordingly, these non-GAAP financial measures should be considered as supplemental in nature, and are not intended, and should not be construed, as a substitute for the related financial information calculated in accordance with GAAP. These limitations of Adjusted EBITDA and Adjusted EBITDA Margin include the following:

• The exclusion of certain recurring, non-cash charges, such as depreciation of property and equipment and amortization of intangible assets. While these are non-cash charges, we may need to replace the assets being depreciated and amortized in the future and Adjusted EBITDA does not reflect cash requirements for these replacements or new capital expenditure requirements;
• The exclusion of other income (expense), net, which includes interest income related to our cash equivalents and our notes receivable from related party, which were paid in full in December 2020, interest expense, and realized and unrealized gains and losses on foreign currency exchange; and
• The exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be an important component of our compensation strategy.
  

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, including net loss and our other GAAP results. The information in the tables below sets forth the non-GAAP financial measures along with the most directly comparable GAAP financial measures.

1STDIBS.COM, INC.
Reconciliation of Net Loss to Adjusted EBITDA
(Amounts in thousands)
(Unaudited)

	Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
Net loss	$	(8,087	)		$	(1,590	)		$	(20,963	)		$	(12,528	)
Excluding:
Depreciation and amortization		713				941				3,112				6,023
Stock-based compensation expense		1,008				214				2,839				846
Other (income) expense, net		(390	)			(464	)			(1,502	)			(989	)
Provision for (benefit from) income taxes		21				8				21				11
Adjusted EBITDA (non-GAAP)	$	(6,735	)		$	(891	)		$	(16,493	)		$	(6,637	)
Divided by:
Net revenue	$	26,930			$	23,874			$	102,731			$	81,863
Adjusted EBITDA Margin (non-GAAP)	(25.0		)%		(3.7		)%		(16.1		)%		(8.1		)%