ThredUp Inc.TDUP

ThredUp Inc. Leases Disclosure

10-KFiled Mar 3, 20252 min read
Leases
The Company leases certain office space and distribution centers with lease terms ranging from one to twelve years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional one to ten years. For certain leases, these optional periods have been considered in the determination of the right-of-use assets and lease liabilities associated with these leases as the Company has determined it is reasonably certain it will exercise the renewal options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
As of December 31, 2024, future minimum undiscounted lease payments were as follows:
Amount1
(in thousands)
2025$6,480 
20266,952 
20276,306 
20286,262 
20296,014 
Thereafter13,497 
Total lease payments45,511 
Less: imputed interest(8,677)
Present value of lease liabilities36,834 
Less: current lease liabilities(4,345)
Non-current lease liabilities$32,489 
Security deposits and letters of credits used to secure the leases were $0.2 million and $5.0 million, respectively, as of December 31, 2024 and $0.3 million and $5.4 million, respectively, as of December 31, 2023.
The components of lease cost are as follows:
Year Ended December 31,
20242023
(in thousands)
Lease cost:
Fixed operating lease cost$6,864 $7,691 
Short-term lease cost438 584 
Variable lease cost(1)
2,580 2,183 
Total lease cost$9,882 $10,458 
(1)Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred.
The weighted-average remaining lease term and weighted-average discount rate used to calculate the present value of lease liabilities are as follows:
December 31,
20242023
Weighted-average remaining lease term6.9 years7.8 years
Weighted-average discount rate6.2 %6.2 %
Supplemental cash flow information related to leases is as follows:
Year Ended December 31,
20242023
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$7,206 $8,560 

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesEarnings Per ShareFair ValuePP&EDebtCommitmentsStock CompensationNew Standards