UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ 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: 001-39848

Poshmark, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	27-4827617
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
203 Redwood Shores Parkway, 8th Floor Redwood City, California	94065
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 262-4771

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock of $0.0001 par value per share	POSH	The Nasdaq Global Select 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

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. ☐

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

As of August 1, 2022, the number of outstanding shares of the registrant’s Class A common stock, par value $0.0001 per share, was 53,890,216, and the number of outstanding shares of the registrant’s Class B common stock, par value $0.0001 per share, was 24,665,454.

Poshmark, Inc.

Table of Contents

		Page
	Note Regarding Forward-Looking Statements	3
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets (unaudited)	4
	Condensed Consolidated Statements of Operations (unaudited)	5
	Condensed Consolidated Statements of Comprehensive Loss (unaudited)	6
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity (unaudited)	7
	Condensed Consolidated Statements of Cash Flows (unaudited)	9
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42

2

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain 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. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our expectations regarding our revenue, expenses, profitability, and other operating results;

•the growth rates of the markets in which we compete;

•our ability to acquire new users and successfully engage new and existing users and convert them into Active Users, Active Buyers, and sellers;

•the costs and effectiveness of our marketing efforts through paid advertising channels and otherwise, as well as our ability to promote our brand;

•our ability to continue to collect meaningful data, improve our algorithms, and provide recommendations for our users;

•our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;

•our ability to effectively manage our growth, including offering new categories and any international expansion;

•our ability to maintain our profitability;

•our ability to maintain the security and availability of our software;

•our ability to protect our intellectual property rights and avoid disputes in connection with the use of intellectual property rights of others;

•our ability to protect our users’ information and comply with growing and evolving data privacy laws and regulations;

•impact of the COVID-19 pandemic on our business and consumers;

•future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;

•our ability to compete effectively with existing competitors and new market entrants; and

•our ability to remediate our material weakness in our internal control over financial reporting.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, as well as in our other filings with the Securities and Exchange Commission (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 have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

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

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Poshmark, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except shares data)

(unaudited)

	June 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	581,153		$	581,538
Prepaid expenses and other current assets		9,972			9,737
Total current assets		591,125			591,275
Property and equipment, net		6,490			7,376
Operating lease right-of-use assets		7,663			—
Intangible assets, net		1,044			1,360
Goodwill		7,012			7,012
Other assets		1,654			1,650
Total assets	$	614,988		$	608,673
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	11,137		$	1,595
Funds payable to customers		145,148			145,290
Operating lease liabilities, current		5,403			—
Accrued expenses and other current liabilities		42,521			40,922
Total current liabilities		204,209			187,807
Operating lease liabilities, non-current		6,056			—
Long-term portion of deferred rent and other liabilities		—			3,247
Total liabilities		210,265			191,054
Commitments and Contingencies (Note 6)
Stockholders’ equity
Preferred Stock, $0.0001 par value, 100,000,000 shares authorized as   of June 30, 2022 and December 31, 2021, respectively; zero shares issued   and outstanding as of June 30, 2022 and December 31, 2021		—			—
Class A and Class B common stock, $0.0001 par value; 5,000,000,000 Class A shares   authorized as of June 30, 2022 and December 31, 2021; 53,765,935 and 52,503,819   Class A shares issued and outstanding as of June 30, 2022 and December 31, 2021,   respectively; 700,000,000 Class B shares authorized as of June 30, 2022 and   December 31, 2021; 24,665,454 and 24,777,228 Class B shares   issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		8			8
Additional paid-in capital		665,595			641,974
Treasury stock, at cost (50,595 shares at June 30, 2022 and December 31, 2021)		(2,651	)		(2,651	)
Accumulated deficit		(258,736	)		(221,835	)
Accumulated other comprehensive income		507			123
Total stockholders’ equity		404,723			417,619
Total liabilities and stockholders’ equity	$	614,988		$	608,673

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

Poshmark, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net revenue	$	89,103		$	81,616		$	180,002		$	162,343
Costs and expenses:
Cost of net revenue, exclusive of depreciation and amortization		14,969			12,746			30,000			25,716
Operations and support		15,904			12,969			31,257			27,863
Research and development		18,212			12,449			34,268			31,249
Marketing		44,146			32,574			86,993			67,823
General and administrative		17,772			12,436			32,808			30,588
Depreciation and amortization		1,013			846			2,033			1,636
Total costs and expenses		112,016			84,020			217,359			184,875
Loss from operations		(22,913	)		(2,404	)		(37,357	)		(22,532	)
Interest income		508			38			559			124
Other (expense) income, net
Change in fair value of redeemable convertible preferred stock   warrant liability		—			—			—			(2,816	)
Change in fair value of the convertible notes		—			—			—			(49,481	)
Loss on extinguishment of the convertible notes		—			—			—			(1,620	)
Change in fair value of contingent consideration		(4	)		—			433			—
Other, net		(341	)		(142	)		(275	)		(184	)
		(345	)		(142	)		158			(54,101	)
Loss before provision for income taxes		(22,750	)		(2,508	)		(36,640	)		(76,509	)
Provision for income taxes		129			40			261			180
Net loss	$	(22,879	)	$	(2,548	)	$	(36,901	)	$	(76,689	)
Net loss per share attributable to common stockholders,   basic and diluted	$	(0.29	)	$	(0.03	)	$	(0.47	)	$	(1.11	)
Weighted-average shares used to compute net loss per share   attributable to common stockholders, basic and diluted		78,210			75,709			77,895			69,219

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

Poshmark, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss	$	(22,879	)	$	(2,548	)	$	(36,901	)	$	(76,689	)
Other comprehensive income:
Reclassification upon extinguishment of the fair value of the   convertible notes related to instrument-specific credit risk   to statement of operations		—			—			—			1,620
Change in foreign currency translation adjustment		476			19			384			25
Change in unrealized gains on marketable securities,   net of tax		—			(1	)		—			—
Total other comprehensive income		476			18			384			1,645
Comprehensive loss	$	(22,403	)	$	(2,530	)	$	(36,517	)	$	(75,044	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

Poshmark, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity

(in thousands, except share data)

(unaudited)

	For the Three Months Ended June 30, 2021
	Class A and Class B Common Stock					Additional Paid-in Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares			Amount
Balance as of March 31, 2021		75,339,093		$	8	$	614,247		$	(2,608	)	$	(197,647	)	$	53	$	414,053
Offering costs associated with initial public offering		—			—		(25	)		—			—			—		(25	)
Issuance of common stock upon vesting of restricted stock units		425,659			—		—			—			—			—		—
Tax withholding related to vesting of restricted stock units		(910	)		—		—			(43	)		—			—		(43	)
Issuance of common stock upon exercise of stock options		154,025			—		282			—			—			—		282
Stock-based compensation		—			—		8,169			—			—			—		8,169
Other comprehensive income		—			—		—			—			—			18		18
Net loss		—			—		—			—			(2,548	)		—		(2,548	)
Balance as of June 30, 2021		75,917,867		$	8	$	622,673		$	(2,651	)	$	(200,195	)	$	71	$	419,906
	For the Three Months Ended June 30, 2022
	Class A and Class B Common Stock					Additional Paid-in Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares			Amount
Balance as of March 31, 2022		77,992,695		$	8	$	652,062		$	(2,651	)	$	(235,857	)	$	31	$	413,593
Issuance of common stock upon vesting of restricted stock units		200,916			—		—			—			—			—		—
Issuance of common stock upon exercise of stock options and   employee stock purchase plan		237,778			—		1,426			—			—			—		1,426
Stock-based compensation		—			—		12,107			—			—			—		12,107
Other comprehensive income		—			—		—			—			—			476		476
Net loss		—			—		—			—			(22,879	)		—		(22,879	)
Balance as of June 30, 2022		78,431,389		$	8	$	665,595		$	(2,651	)	$	(258,736	)	$	507	$	404,723

The accompanying notes are an integral part of the condensed consolidated financial statements

7

Poshmark, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity

(in thousands, except share data)

(unaudited)

	For the Six Months Ended June 30, 2021
	Redeemable Convertible Preferred Stock						Class A and Class B Common Stock				Additional Paid-in Capital		Treasury Stock		Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Total Stockholders’ (Deficit) Equity
	Shares			Amount			Shares		Amount
Balance as of December 31, 2020		52,286,631		$	156,175			13,093,065	$	1	$	28,300	$	—	$	(123,506	)	$	(1,574	)	$	(96,779	)
Conversion of redeemable convertible preferred stock to common   stock upon initial public offering		(52,286,631	)		(156,175	)		52,286,631		6		156,169		—		—			—			156,175
Issuance of common stock upon initial public offering, net of   underwriting discounts and commissions and offering costs		—			—			7,590,000		1		292,234		—		—			—			292,235
Conversion of convertible notes to common stock upon initial   public offering		—			—			1,400,560		—		104,902		—		—			—			104,902
Exercise of common stock warrants		—			—			85,583		—		100		—		—			—			100
Reclassification of warrant liability to additional paid-in capital   upon initial public offering		—			—