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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Poshmark, Inc. Reports Third Quarter 2021 Financial Results

November 9, 2021 GMT

Q3 Gross Merchandise Value Increased 18% Year over Year to $442.5 million
Q3 Total Revenue Grew 16% Year over Year to $79.7 million
Q3 Adjusted EBITDA was $0.3 million with margins of 0.3%

REDWOOD CITY, Calif., Nov. 09, 2021 (GLOBE NEWSWIRE) -- Poshmark, Inc. (NASDAQ: POSH), a leading social marketplace for new and secondhand style, today announced financial results for the third quarter ended September 30, 2021. The Company posted net revenues of $79.7 million, which is a 16% year-over-year increase from the third quarter of 2020. Gross Merchandise Value (“GMV”) grew 18% year-over-year to $442.5 million, up from $375.4 million in the same period last year.

“Next month marks a decade since Poshmark’s founding, sparking a new era that puts social engagement and sustainability at the forefront of the shopping experience. Our asset-light model, which is both adaptable and responsive to changing consumer demands and insulated from supply chain disruption, is uniquely positioned to thrive in the current environment,” said Manish Chandra, Founder and Chief Executive Officer of Poshmark. “We delivered a solid quarter and our sixth consecutive quarter of operating profitability, despite difficult comparisons and the headwinds of Apple privacy changes, and our investments in marketing accelerated Trailing-Twelve-Months Active Buyer growth. We have a long runway of growth ahead, driven by strategic investments in product innovation, opening our platform to larger brands with Brand Closets, and expanding authentication services to cement our marketplace as the trusted choice for buyers, all of which will help fuel long-term growth of our business.”  

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Third Quarter 2021 Key Metrics and Financial Highlights:

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  • GMV was $442.5 million, an increase of 18% year-over-year from $375.4 million in the third quarter of 2020. Quarterly GMV has increased year-over-year for the past 15 quarters.
  • Trailing 12 months Active Buyers reached 7.3 million in the third quarter of 2021, a 17% year-over-year increase from 6.2 million from the third quarter of 2020.
  • Net revenue was $79.7 million, a 16% increase year-over-year from $68.8 million in the third quarter of 2020.
  • Adjusted EBITDA for the third quarter of 2021 was $0.3 million which decreased from $15.0 million in the third quarter of 2020. Adjusted EBITDA margin was 0.3% in the third quarter of 2021.
  • GAAP results from operations was a ($7.2) million loss in the third quarter of 2021, compared to income of $11.7 million in the third quarter of 2020 and includes $6.7 million and $2.6 million in stock-based compensation, respectively.
  • Non-GAAP results from operations (excluding stock-based compensation) was ($0.6) million loss, compared to income of $14.3 million in the third quarter of 2020.
  • GAAP diluted net (loss) income per share attributable to common stockholders was ($0.09) compared to $0.44 in the third quarter of 2020.
  • Cash, cash equivalents, and marketable securities were $589.0 million as of September 30, 2021.

Business Highlights:

  • At the end of July, we expanded our partnership with Affirm to broaden their Split Pay Products to include items between $50 to $200, up from $200 previously.
  • In September, we entered India, our third international market, bringing our community and marketplace to Asia for the first time.
  • In October we acquired Suede One, a platform that combines machine learning, computer vision, and expert human review to virtually authenticate sneakers.
  • At the end of October, we launched our Brand Closets program, which enables large-scale brands to open a closet on Poshmark to directly connect, converse with, and sell to our highly engaged community of over 80 million users, accessing a new sales channel that is the future of shopping.

Fourth Quarter 2021 Guidance:

  • Expected Revenue range:                $80.0 to $82.0 million
  • Adjusted EBITDA range:                  ($7.0) to ($8.0) million

Webcast and Conference Call Information:
Poshmark, Inc. will host a conference call to review these results at 1:45 p.m. Pacific Time today, November 9, 2021. Interested parties may listen to the conference call via live webcast by accessing the Company’s Investor Relations website (investors.poshmark.com) under the events section. A webcast replay of the earnings conference call will also be available on the Poshmark website through the same link following the conference call this evening, for at least three months thereafter.

About Poshmark, Inc.:
Poshmark is a leading social marketplace for new and secondhand style for women, men, kids, pets, home, and more. By combining the human connection of physical shopping with the scale, ease, and selection benefits of ecommerce, Poshmark makes buying and selling simple, social, and sustainable. Its community of more than 80 million registered users across the U.S., Canada, Australia, and India is driving the future of commerce while promoting more sustainable consumption. For more information, please visit www.poshmark.com, and for company news and announcements, please visit investors.poshmark.com. You can also find Poshmark on Instagram, Facebook, Twitter, TikTok, Pinterest, and YouTube.

Poshmark intends to use its Investor Relations website and blog (blog.poshmark.com) to disclose material, non-public information and to comply with its disclosure obligations under Regulation FD. From time to time, we will also disclose this information through our press releases, SEC filings, or public conference calls and webcasts.

SOURCE: Poshmark, Inc.

Investor Relations Contact:
ir@poshmark.com  

Media Relations Contact:
pr@poshmark.com  

Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, forward-looking statements can be identified by words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. These statements include, but are not limited to, statements that we make relating to our future financial performance, including our guidance on financial results for the fourth quarter of 2021.

Forward-looking statements are neither historical facts nor assurances of future performance. Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include, but are not limited to: our ability to attract new users and convert users into active buyers and active sellers; our ability to maintain profitability; the impact of COVID-19 on our business and our consumers; the growth rates in the markets in which we compete; our ability to manage growth effectively; our ability to maintain the vibrancy of our community and trustworthiness of our marketplace; our dependence on sellers to provide a fulfilling experience to buyers; and our reliance on third-party shipping partners such as the United States Postal Service. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission (SEC), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q. Additional information will be provided in our Quarterly Report on Form 10-Q for the three months ended September 30, 2021 and other filings we make from time to time with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements.

The forward-looking statements made in this press release relate only to management’s beliefs and assumptions as of this date. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Non-GAAP Financial Measures:
To supplement our consolidated financial statements, which are prepared and presented in accordance with United States generally accepted accounting principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Non-GAAP results from operations (excluding stock-based compensation) and Free Cash Flow. Our management uses non-GAAP financial measures internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not recognized measures for financial statement presentation under GAAP and do not have standardized meanings, and may not be comparable to similar measures presented by other public companies. Non-GAAP financial measures also have certain limitations. For example, Adjusted EBITDA and Adjusted EBITDA Margin have certain limitations in that it does not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. As such, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or in isolation from, the corresponding measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view the non-GAAP financial measures in conjunction with their respective related GAAP financial measures. Please see the financial tables below for a reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures.

Adjusted EBITDA is a non-GAAP financial measure we define as net income (loss) attributable to common stockholders, excluding depreciation and amortization, stock-based compensation expense, interest income, other expense, net, and provision (benefit) for income taxes. Adjusted EBITDA margin is a non-GAAP financial measure calculated by dividing Adjusted EBITDA for a period by revenue for the same period. We believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating our operating results, 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 its financial and operational decision-making. We also believe that the exclusion of certain expenses in calculating Adjusted EBITDA and Adjusted EBITDA Margin facilitates operating performance comparisons on a period-to-period basis and, in the case of exclusion of the impact of equity-based compensation and related taxes, excludes an item that we do not consider to be indicative of our core operating performance.

Non-GAAP results from operations (excluding stock-based compensation) is a non-GAAP financial measure that is calculated as GAAP results from operations plus stock-based compensation. We believe that adding back stock-based compensation, as adjustments to our GAAP results from operations for all periods presented provides a more meaningful comparison between our operating results from period to period.

Free cash flow is a non-GAAP financial measure that is calculated as net cash (used in) provided by operating activities less net cash used to purchase property and equipment. We believe free cash flow is an important indicator of our business performance, as it measures the amount of cash we generate. Accordingly, we believe that free cash flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

Operating Metrics:

GMV (gross merchandise value) is the total dollar value of transactions on our platform in a given period, prior to returns and cancellations, and excluding shipping and sales taxes. GMV is a measure of the total economic activity generated by our marketplace, and an indicator of the scale and growth of our marketplace and the health of our marketplace ecosystem.

Active buyers are unique users who have purchased at least one item on our platform in the trailing 12 months preceding the measurement date, regardless of returns and cancellations.

Poshmark, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

  Three Months Ended September 30,  Nine Months Ended September 30, 
  2020  2021  2020  2021 
Net revenue $68,782  $79,650  $192,760  $242,363 
Costs and expenses(1):                
Cost of net revenue, exclusive of
depreciation and amortization
  11,359   12,082   31,924   37,798 
Operations and support  10,135   13,199   27,871   41,062 
Research and development  8,083   12,325   22,226   43,574 
Marketing  19,173   36,385   65,449   104,578 
General and administrative  7,620   12,070   21,321   43,706 
Depreciation and amortization  752   827   2,130   2,463 
Total costs and expenses  57,122   86,888   170,921   273,181 
Income (loss) from operations  11,660   (7,238)  21,839   (30,818)
Interest income  63   77   540   201 
Other expense, net                
Change in fair value of redeemable
convertible preferred stock warrant liability
  (125)     (500)  (2,816)
Change in fair value of the convertible notes  (516)     (516)  (49,481)
Loss on extinguishment of the convertible
notes
           (1,620)
Other, net  (204)  (36)  (232)  (220)
   (845)  (36)  (1,248)  (54,137)
Income (loss) before provision (benefit) for
income taxes
  10,878   (7,197)  21,131   (84,754)
Provision (benefit) for income taxes  105      225   (30)
Net income (loss) $10,773  $(7,197) $20,906  $(84,724)
Undistributed earnings attributable to
participating securities
  (2,643)     (12,776)   
Net income (loss) attributable to common
stockholders
 $8,130  $(7,197) $8,130  $(84,724)
Net income (loss) per share attributable to
common stockholders, basic
 $0.65  $(0.09) $0.65  $(1.18)
Net income (loss) per share attributable to
common stockholders, diluted
 $0.44  $(0.09) $0.45  $(1.18)
Weighted-average shares used to compute net
income (loss) per share attributable to
common stockholders, basic
  12,595   76,479   12,433   71,639 
Weighted-average shares used to compute net
income (loss) per share attributable to
common stockholders, diluted
  18,390   76,479   17,924   71,639 
(1) Includes stock-based compensation expense as follows:             
Operations and support $192  $758  $521  $3,810 
Research and development  952   3,145   2,028   16,882 
Marketing  397   969   1,012   5,297 
General and administrative  1,080   1,796   2,522   12,923 
Total $2,621  $6,668  $6,083  $38,912 


Poshmark, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)

  December 31,  September 30, 
  2020  2021 
Assets        
Current assets        
Cash and cash equivalents $235,834  $589,028 
Marketable securities  26,238    
Prepaid expenses and other current assets  7,905   9,340 
Total current assets  269,977   598,368 
Property and equipment, net  8,447   7,899 
Other assets  7,010   1,816 
Total assets $285,434  $608,083 
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’
(Deficit) Equity
        
Current liabilities        
Accounts payable $12,317  $10,620 
Funds payable to customers  117,127   136,358 
Accrued expenses and other current liabilities  35,859   39,067 
Total current liabilities  165,303   186,045 
Redeemable convertible preferred stock warrant liability  3,494    
Long-term portion of deferred rent and other liabilities  4,823   3,803 
Convertible notes  55,421    
Total liabilities  229,041   189,848 
Commitments and contingencies        
Redeemable convertible preferred stock  156,175    
Stockholders’ (deficit) equity        
Preferred Stock      
Common stock  1    
Class A and Class B common stock     8 
Additional paid-in capital  28,300   631,971 
Treasury stock, at cost     (2,651)
Accumulated deficit  (126,509)  (211,233)
Accumulated other comprehensive (loss) income  (1,574)  140 
Total stockholders’ (deficit) equity  (99,782)  418,235 
Total liabilities, redeemable convertible preferred stock and
stockholders’ equity
 $285,434  $608,083 


Poshmark, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

  Nine Months Ended September 30, 
  2020  2021 
Cash flows from operating activities        
Net income (loss) $20,906  $(84,724)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
        
Depreciation and amortization  2,130   2,463 
Stock-based compensation  6,083   38,912 
Change in fair value of redeemable convertible preferred stock warrant
liability
  500   2,816 
Change in fair value of the convertible notes  516   49,481 
Loss on extinguishment of the convertible notes     1,620 
Accretion of discounts and amortization of premiums on marketable
securities, net
  (125)  237 
Other  3   4 
Changes in operating assets and liabilities:        
Prepaid expenses and other assets  (4,551)  2,302 
Accounts payable  10,827   (1,697)
Funds payable to customers  31,660   19,231 
Accrued expenses and other liabilities  240   2,188 
Net cash provided by operating activities  68,189   32,833 
Cash flows from investing activities        
Purchases of property and equipment  (1,102)  (1,580)
Purchases of marketable securities  (67,929)   
Maturities of marketable securities  75,957   26,000 
Sales of marketable securities  27,208    
Net cash provided by investing activities  34,134   24,420 
Cash flows from financing activities        
Proceeds from initial public offering, net of underwriting discounts and
commissions and offering costs
     293,692 
Proceeds from issuance of common stock warrants     100 
Tax withholding related to vesting of restricted stock units     (2,651)
Proceeds from exercise of stock options  883   4,705 
Proceeds from borrowing on convertible notes  50,000    
Net cash provided by financing activities  50,883   295,846 
Effect of foreign exchange rate changes on cash and cash equivalents  34   95 
Net increase in cash and cash equivalents  153,240   353,194 
Cash and cash equivalents        
Beginning of year  63,318   235,834 
End of year $216,558  $589,028 

The following table reflects the reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated (in thousands; unaudited):

  Three Months Ended September 30,  Nine Months Ended September 30, 
  2020  2021  2020  2021 
Net income (loss) attributable to common
stockholders
 $8,130  $(7,197) $8,130  $(84,724)
Adjusted to exclude the following:                
Depreciation and amortization  752   827   2,130   2,463 
Stock-based compensation  2,621   6,668   6,083   38,912 
Interest income  (63)  (77)  (540)  (201)
Other expense, net  845   36   1,248   54,137 
Provision (benefit) for income taxes  105      225   (30)
Undistributed earnings attributable to
participating securities
  2,643      12,776    
Adjusted EBITDA $15,033  $257  $30,052  $10,557 

The following table reflects the reconciliation of GAAP income (loss) from operations to non-GAAP income (loss) from operations for each of the periods indicated (in thousands; unaudited):

  Three Months Ended September 30,  Nine Months Ended September 30, 
  2020  2021  2020  2021 
GAAP income (loss) from operations $11,660  $(7,238) $21,839  $(30,818)
Adjusted to exclude the following:                
Stock-based compensation  2,621   6,668   6,083   38,912 
Non-GAAP income (loss) from operations $14,281  $(570) $27,922  $8,094 

The following table presents a reconciliation of net cash provided by operating activities to free cash flow for each of the periods indicated (in thousands; unaudited):

  Nine Months Ended September 30, 
  2020  2021 
GAAP net cash provided by operating activities $68,189  $32,833 
Less: purchases of property and equipment  (1,102)  (1,580)
Non-GAAP free cash flow $67,087  $31,253