dibs-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended June 30, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from _________ to __________

Commission file number 333-256188

1STDIBS.COM, INC.

(Exact name of registrant as specified in its charter)


Delaware						94-3389618
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

51 Astor Place, 3rd Floor New York, New York						10003
(Address of Principal Executive Offices)						(Zip Code)

(212) 627-3927

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	DIBS	The Nasdaq Stock Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of July 28, 2023, the registrant had 38,780,744 shares of common stock, $0.01 par value per share outstanding.

TABLE OF CONTENTS


		Pages
Part I - Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited):	7
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Operations	8
	Condensed Consolidated Statements of Comprehensive Loss	9
	Condensed Consolidated Statements of Stockholders’ Equity	10
	Condensed Consolidated Statements of Cash Flows	11
	Notes to Unaudited Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

Part II - Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 6.	Exhibits Index	67
Signatures		68

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “can,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “target,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•our future financial performance, including our expectations regarding our net revenue, cost of revenue, operating expenses, and our ability to achieve and maintain future profitability;

•our ability to effectively manage or sustain our growth and to effectively expand our operations, including internationally;

•our strategies, plans, objectives and goals;

•the market demand for the products offered on our online marketplace, including vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion, new and authenticated luxury design products in general, and the online market for these products;

•our ability to compete with existing and new competitors in existing and new markets;

•our ability to attract and retain sellers and buyers;

•our ability to increase the supply of luxury design products offered through our online marketplace;

•our ability to timely and effectively scale our operations;

•our ability to enter international markets;

•our ability to successfully implement, launch, and achieve market acceptance of our 1stDibs Auctions offering and to anticipate and manage the risks associated therewith

•our ability to develop and protect our brand;

•our ability to comply with laws and regulations;

•our expectations regarding outstanding litigation;

•our expectations and management of future growth;

•our expectations concerning relationships with third parties;

•economic and industry trends, projected growth, or trend analysis;

•our estimated market opportunity;

•our ability to add capacity, capabilities, and automation to our operations;

•the increased expenses associated with being a public company;

•the effect of the COVID-19 pandemic on our business and operations;

•our ability to maintain, protect, and enhance our intellectual property rights and successfully defend against claims of infringement, misappropriation, or other violations of third-party intellectual property;

•the availability of capital to grow our business;

•our ability to successfully defend any future litigation brought against us;

•our ability to implement, maintain, and improve effective internal controls;

•potential changes in laws and regulations applicable to us or our sellers, or our sellers’ ability to comply therewith; and

•the amount of time for which we expect our cash balances and other available financial resources to be sufficient to fund our operations.

These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report on Form 10-Q and are subject to risks and uncertainties. You should refer to the section titled “Risk Factors” included under Part II, Item 1A below and elsewhere in this Quarterly Report on Form 10-Q, as well as in our other filings with the Securities and Exchange Commission (the “SEC”), for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on them.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Such forward-looking statements relate only to events as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.

You should read this Quarterly Report on Form 10-Q and the documents that we reference and have filed as exhibits with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.

RISK FACTOR SUMMARY

The following risk factor summary should be read together with the more detailed discussion of risks and uncertainties set forth in the “Risk Factors” section of this report.

•Our history of operating losses and ability to achieve or maintain profitability in the future, which could negatively impact our financial condition and our stock price;

•Fluctuations in our quarterly and annual net revenue and results of operations, which could cause our stock price to fluctuate and the value of your investment to decline;

•Our historical growth, which may not be indicative of our future growth;

•Our ability to generate a sufficient volume of listings of luxury design products on our online marketplace or to accurately vet the authenticity of these products, which could impact our business, brand, and reputation;

•Our ability to maintain the authenticity of the items listed and sold through our online marketplace, which could cause our business, brand, and reputation to suffer;

•Risks associated with claims that items listed on our online marketplace are counterfeit, infringing, hazardous, or illegal, or otherwise subject to regulation or cultural patrimony considerations;

•Risks associated with liability for fraudulent or unlawful activities of sellers who list items on our online marketplace, which could cause our business, brand, and reputation to suffer;

•Our ability to attract and maintain an active community of sellers and buyers, which could impact our growth;

•Our reliance, in part, on sellers to provide a positive experience to buyers;

•Our ability to compete effectively;

•Real or perceived inaccuracies in our metrics and market estimates used to evaluate our performance, which may harm our reputation and negatively affect our business;

•Our ability to successfully expand our business model to encompass additional categories of luxury design products in a timely and cost-effective manner;

•The COVID-19 pandemic, which has impacted, and may continue to impact, our business, key metrics, and results of operations in volatile and unpredictable ways;

•Our ability to maintain and promote our brand and reputation, which could impact our business, market position, and future growth;

•Risks related to acquisitions, which may divert management’s attention and/or prove to be unsuccessful;

•Risks related to further expansion into markets outside of the United States;

•Our ability to successfully protect our intellectual property;

•Risks associated with the disclosure of sensitive information about our sellers and buyers or other third parties with whom we transact business, or cyber-attacks against us or our third-party providers, which could result in curtailed use of our online marketplace, exposure to liability, and reputational damage;

•Risks related to regulatory matters and litigation;

•Risks related to the impact of and focus on Environmental, Social, and Governance (“ESG”) matters;

•Risks related to our operations as a public company;

•Risks related to our internal control over financial reporting and our disclosure controls and procedures; and

•Risks related to our common stock, including that an active trading market for our common stock may not develop or be sustained and that the price of our common stock may be volatile.

Part I - Financial Information

Item 1. Condensed Consolidated Financial Statements (Unaudited)

1STDIBS.COM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	45,410	$	153,209
Short-term investments	100,532		—
Restricted cash, current	—		1,500
Accounts receivable, net of allowance for doubtful accounts of $125 and $113 at June 30, 2023 and December 31, 2022, respectively	786		972
Prepaid expenses	3,585		3,506
Receivables from payment processors	2,321		2,476
Other current assets	947		800
Total current assets	153,581		162,463
Restricted cash, non-current	3,335		3,334
Property and equipment, net	3,306		3,685
Operating lease right-of-use assets	20,722		21,990
Goodwill	4,110		4,075
Other assets	245		249
Total assets	$	185,299	$	195,796
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,681	$	2,905
Payables due to sellers	6,346		7,185
Accrued expenses	11,424		10,761
Operating lease liabilities, current	2,850		2,770
Other current liabilities	2,775		2,429
Total current liabilities	27,076		26,050
Operating lease liabilities, non-current	20,232		21,678
Other liabilities	17		46
Total liabilities	47,325		47,774

SEC Form 10-Q filed by 1stdibs.com Inc.