10-Q

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 September 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 November 1, 2022, the number of outstanding shares of the registrant’s Class A common stock, par value $0.0001 per share, was 54,626,374, and the number of outstanding shares of the registrant’s Class B common stock, par value $0.0001 per share, was 24,592,080.

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	39
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	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
Signatures		43

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 proposed acquisition by NAVER Corporation, including our expectations regarding the timing and completion thereof;

•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)

	September 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	588,816		$	581,538
Prepaid expenses and other current assets		8,267			9,737
Total current assets		597,083			591,275
Property and equipment, net		6,249			7,376
Operating lease right-of-use assets		6,739			—
Intangible assets, net		885			1,360
Goodwill		7,012			7,012
Other assets		1,629			1,650
Total assets	$	619,597		$	608,673
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	12,516		$	1,595
Funds payable to customers		153,212			145,290
Operating lease liabilities, current		5,918			—
Accrued expenses and other current liabilities		47,585			40,922
Total current liabilities		219,231			187,807
Operating lease liabilities, non-current		4,518			—
Long-term portion of deferred rent and other liabilities		—			3,247
Total liabilities		223,749			191,054
Commitments and Contingencies (Note 6)
Stockholders’ equity
Preferred Stock, $0.0001 par value, 100,000,000 shares authorized as of   September 30, 2022 and December 31, 2021, respectively; zero shares issued   and outstanding as of September 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 September 30, 2022 and December 31, 2021; 54,472,825 and 52,503,819   Class A shares issued and outstanding as of September 30, 2022 and December 31, 2021,   respectively; 700,000,000 Class B shares authorized as of September 30, 2022 and   December 31, 2021; 24,623,085 and 24,777,228 Class B shares issued and outstanding   as of September 30, 2022 and December 31, 2021, respectively		8			8
Additional paid-in capital		679,710			641,974
Treasury stock, at cost (50,595 shares at September 30, 2022 and December 31, 2021)		(2,651	)		(2,651	)
Accumulated deficit		(282,276	)		(221,835	)
Accumulated other comprehensive income		1,057			123
Total stockholders’ equity		395,848			417,619
Total liabilities and stockholders’ equity	$	619,597		$	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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net revenue	$	88,428		$	79,463		$	268,430		$	241,806
Costs and expenses:
Cost of net revenue, exclusive of depreciation and amortization		14,915			12,082			44,915			37,798
Operations and support		15,513			13,199			46,770			41,062
Research and development		18,189			12,325			52,457			43,574
Marketing		42,613			36,198			129,606			104,021
General and administrative		20,473			11,729			53,281			42,317
Depreciation and amortization		1,000			827			3,033			2,463
Total costs and expenses		112,703			86,360			330,062			271,235
Loss from operations		(24,275	)		(6,897	)		(61,632	)		(29,429	)
Interest income		1,586			77			2,145			201
Other expense, 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		(37	)		—			396			—
Foreign exchange loss, net		(694	)		(36	)		(969	)		(220	)
		(731	)		(36	)		(573	)		(54,137	)
Loss before provision for income taxes		(23,420	)		(6,856	)		(60,060	)		(83,365	)
Provision for income taxes		120			—			381			180
Net loss	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
Net loss per share attributable to common stockholders,   basic and diluted	$	(0.30	)	$	(0.09	)	$	(0.77	)	$	(1.17	)
Weighted-average shares used to compute net loss per share   attributable to common stockholders, basic and diluted		78,682			76,479			78,160			71,639

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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net loss	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
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		550			70			934			95
Change in unrealized gains on marketable securities,   net of tax		—			(1	)		—			(1	)
Total other comprehensive income		550			69			934			1,714
Comprehensive loss	$	(22,990	)	$	(6,787	)	$	(59,507	)	$	(81,831	)

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 September 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 June 30, 2021		75,917,867	$	8	$	622,673	$	(2,651	)	$	(200,195	)	$	71	$	419,906
Issuance of common stock upon vesting of restricted stock units		193,724		—		—		—			—			—		—
Tax withholding related to vesting of restricted stock units		—		—		—		—			—			—		—
Issuance of common stock upon exercise of stock options		787,045		—		2,580		—			—			—		2,580
Stock-based compensation		—		—		6,718		—			—			—		6,718
Other comprehensive income		—		—		—		—			—			69		69
Net loss		—		—		—		—			(6,856	)		—		(6,856	)
Balance as of September 30, 2021		76,898,636	$	8	$	631,971	$	(2,651	)	$	(207,051	)	$	140	$	422,417
	For the Three Months Ended September 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 June 30, 2022		78,431,389	$	8	$	665,595	$	(2,651	)	$	(258,736	)	$	507	$	404,723
Issuance of common stock upon vesting of restricted stock units		479,309		—		—		—			—			—		—
Issuance of common stock upon exercise of stock options and   employee stock purchase plan		185,212		—		517		—			—			—		517
Stock-based compensation		—		—		13,598		—			—			—		13,598
Other comprehensive income		—		—		—		—			—			550		550
Net loss		—		—		—		—			(23,540	)		—		(23,540	)
Balance as of September 30, 2022		79,095,910	$	8	$	679,710	$	(2,651	)	$	(282,276	)	$	1,057	$	395,848

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 Nine Months Ended September 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		—			—			—			—		6,310		—			—			—			6,310
Issuance of common stock upon vesting of restricted stock units		—			—			760,185			—		—		—			—			—			—
Tax withholding related to vesting of restricted stock units		—			—			(50,595	)		—		—		(2,651	)		—			—			(2,651	)
Issuance of common stock upon exercise of stock options		—			—			1,733,207			—		4,705		—			—			—			4,705
Stock-based compensation		—			—			—			—		39,251		—			—			—			39,251
Other comprehensive income		—			—			—			—		—		—			—			1,714			1,714
Net loss		—			—			—			—		—		—			(83,545	)		—			(83,545	)
Balance as of September 30, 2021		—		$	—			76,898,636		$	8	$	631,971	$	(2,651	)	$	(207,051	)	$	140		$	422,417
	For the Nine Months Ended September 30, 2022
	Redeemable Convertible Preferred Stock						Common Stock					Additional Paid-in Capital		Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares			Amount			Shares			Amount
Balance as of December 31, 2021		—		$	—			77,281,047		$	8	$	641,974	$	(2,651	)	$	(221,835	)	$	123		$	417,619
Issuance of common stock upon vesting of restricted stock units		—			—			880,940			—		—		—			—			—			—
Issuance of common stock upon exercise of stock options and   employee stock purchase plan		—			—			933,923			—		3,223		—			—			—			3,223
Stock-based compensation		—			—			—			—		34,513		—			—			—			34,513
Other comprehensive income		—			—			—			—		—		—			—			934			934
Net loss		—			—			—			—		—		—			(60,441	)		—			(60,441	)
Balance as of September 30, 2022		—		$	—			79,095,910		$	8	$	679,710	$	(2,651	)	$	(282,276	)	$	1,057		$	395,848

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

8

Poshmark, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(60,441	)	$	(83,545	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		3,033			2,463
Stock-based compensation		34,285			38,912
Reduction in the carrying amount of right-of-use assets		2,756			—
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		(396	)		—
Accretion of discounts and amortization of premiums on marketable securities, net		—			237
Other		362			4
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,491			2,302
Accounts payable		10,921			(1,697	)
Funds payable to customers		7,922			19,231
Accrued expenses and other liabilities		9,119			2,142
Operating lease liabilities		(4,621	)		—
Net cash provided by operating activities		4,431			33,966
Cash flows from investing activities
Purchases of property and equipment		(1,311	)		(1,580	)
Maturities of marketable securities		—			26,000
Net cash (used in) provided by investing activities		(1,311	)		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 redeemable convertible preferred stock warrants		—			100
Tax withholding related to vesting of restricted stock units		—			(2,651	)
Proceeds from exercise of stock options and employee stock purchase plan		3,223			4,705
Net cash provided by financing activities		3,223			295,846
Effect of foreign exchange rate changes on cash and cash equivalents		935			95
Net increase in cash and cash equivalents		7,278			354,327
Cash and cash equivalents
Beginning of period		581,538			238,902
End of period	$	588,816		$	593,229
Supplemental cash flow data
Cash paid for income taxes	$	337		$	320
Stock-based compensation capitalized to internal use software		228			339
Deferred offering costs included in accounts payable and accrued expenses and other   current liabilities		—			182
Conversion of convertible notes upon initial public offering		—			104,902
Conversion of redeemable convertible preferred stock upon initial public offering		—			156,175
Reclassification of preferred stock warrant liability upon initial public offering		—			6,310

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

9

Poshmark, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Organization

Description of Business

Poshmark, Inc. (the Company) was incorporated in the state of Delaware with headquarters in Redwood City, California, and has wholly-owned subsidiaries based in Chennai, India, Vancouver, Canada, New South Wales, Australia, and London, United Kingdom. The Company is a social marketplace that combines the human connection of a physical shopping experience with the scale, reach, ease, and selection benefits of eCommerce. In doing so, the Company brings the power of community to buying and selling online. Pairing technology with the inherent human desire to socialize, the Company creates passion and personal connections among users.

The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern. Since inception, the Company has incurred cumulative net losses. The Company generated net loss of $23.5 million for the three months ended September 30, 2022. The Company had an accumulated deficit of $282.3 million as of September 30, 2022. The Company has historically financed its operations primarily through the issuance and sale of redeemable convertible preferred stock and through the issuance of convertible debt. While the Company believes that its current cash and cash equivalents are adequate to meet its needs for a one-year period from the date these condensed consolidated financial statements are issued, the Company may need to borrow funds or raise additional equity to achieve its longer-term business objectives.

Initial Public Offering

On January 19, 2021, the Company completed its initial public offering (IPO). In connection with the IPO, it authorized two new classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock and has no expiration date. The Class B common stock automatically converts to Class A common stock upon transfers or any sale. In its IPO, the Company issued and sold 6,600,000 shares of its Class A common stock at the public offering price of $42.00 per share, plus an additional 990,000 shares of common stock at the public offering price of $42.00 per share pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $292.3 million after deducting underwriting discounts and commissions and offering expenses. Upon the closing of the IPO:

•all 52,286,631 shares of the Company’s outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis;

•convertible notes with an aggregate principal amount of $50.0 million automatically converted into 1,400,560 shares of our Class A common stock at a conversion price equal to 85% of the IPO price of $42.00 per share; and

•redeemable convertible preferred stock warrants amounting to 85,583 automatically converted into Class B common stock warrants.

Upon completion of the IPO, $4.2 million of deferred offering costs were reclassified to additional paid-in capital and accounted for as a reduction of the IPO proceeds in the condensed consolidated balance sheets.

Merger Agreement

On October 3, 2022, the Company entered into an Agreement and Plan of Merger (the Merger Agreement), by and among the Company, NAVER Corporation, a public corporation organized under the laws of the Republic of Korea (Parent or Naver), Proton Parent, Inc., a Delaware corporation and wholly owned subsidiary of Parent (Proton Parent), and Proton Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Proton Parent (Merger Sub), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the merger (the Merger) as an indirect subsidiary of Naver. As a result of the Merger, each share of the Company’s Class A common stock and Class B common stock (together, the Company Common Stock) outstanding immediately prior to the effective time of the Merger (subject to certain exceptions set forth in the Merger Agreement) will, at the effective time, automatically be canceled and converted into the right to receive $17.90 in cash, without interest and subject to applicable withholding taxes. If the Merger is consummated, the Company’s Class A common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.

10

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) as well as the instructions to Form 10-Q and the rules and regulations of the U.S. SEC for interim financial information. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements as of that date but does not include all disclosures, including notes required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results of operations expected for the entire year ending December 31, 2022 or for any other future annual or interim periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K (2021 Annual Report) for the year ended December 31, 2021, filed with the SEC on March 30, 2022.

For the foreign subsidiaries where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. dollars are recorded as a separate component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses have not been material for all periods presented.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates include the fair value of financial instruments, the incremental borrowing rate (IBR) applied in lease accounting, capitalization and estimated useful life of internal-use software, allowance for expected chargeback losses, estimates related to credits, incentives and refunds issued to customers, valuation of the convertible notes preceding its IPO, valuation of the redeemable convertible preferred stock warrant liability preceding its IPO, stock-based compensation, valuation of the Company’s common stock preceding its IPO, and valuation of deferred income tax assets and the uncertain tax positions. To the extent there are material differences between these estimates, judgments or assumptions and actual results, the condensed consolidated financial statements will be affected.

Revenue Recognition

The Company recognizes revenue when it satisfies its performance obligations. The Company considers both sellers and buyers to be customers. The Company generates revenue from sellers for fees earned when sellers sell items they have listed on the Company’s platform to buyers. The Company generates revenue from buyers for fees earned when they purchase shipping labels used for delivery of the items purchased. The Company periodically reassesses its revenue recognition policies as new offerings become material, and business models evolve. The Company recognizes revenue net of estimated returns and cancellations based on its historical experience. Transactions may be cancelled by a buyer or seller in certain circumstances.

The Company enters into the Terms of Service (TOS) with buyers and sellers to use the Company’s technology platform. The TOS governs these parties’ use of the platform, including payment terms for the buyer and the seller and services to be provided by the Company. Under the TOS, upon the buyer’s purchase from the seller, the Company, buyer, and seller are committed to perform and enforceable rights and obligations are established.

Sellers

Sellers are able to list their items for sale on the Company’s platform at no charge. The Company charges a fee upon the sale of items listed on its platform. The fee is a fixed dollar amount for orders under a certain value, and a fixed percentage of the final sales price of the item for orders greater than that. The service that the Company provides to sellers includes the facilitation of the sale of their items as well as certain ancillary activities such as payment processing and authentication (for certain luxury items). These activities comprise a single performance obligation to sellers, which is to facilitate the sale of the listed items between sellers and buyers on the Company’s platform (sale facilitation).

The Company evaluates the presentation of revenue from sellers on a gross or net basis based on whether it acts as a principal or an agent in the sale of listed items between sellers and buyers. The Company does not control the listed items at any time prior to the transfer of such items to buyers. The Company acts as an agent in facilitating the sale of items from sellers to buyers by allowing them

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to connect and interact on the Company’s platform. The Company is not primarily responsible for fulfillment of purchased items, does not have inventory risk, and does not set the price for the listed item. As such, the Company reports revenue from sellers on a net basis to reflect the fees received from sellers.

Revenue is recognized at the point in time the Company satisfies its performance obligation to facilitate the sale of a listed item. This occurs when both the seller and the buyer agree to a sale and the payment is processed on the Company’s platform. For luxury items authenticated by the Company, sale facilitation revenue is recognized when the Company authenticates and arranges for shipment of the items to the buyer, as this is the point in time a sale is finalized and the Company has satisfied its performance obligation.

Buyers

When a sale is finalized, the buyer purchases a shipping label from United States Postal Service (USPS), or the relevant shipping provider for the Canada, Australia and India marketplaces, through the Poshmark platform. The Company emails the shipping label to the seller and the seller ships the item to the buyer through the shipping provider. The Company does not purchase the shipping label on behalf of the buyer until after the buyer has purchased an item and has remitted payment. As a result, the Company has one performance obligation to buyers, which is to facilitate the sale of shipping labels to buyers for delivery of items purchased on the Company’s platform (shipping facilitation).

The Company evaluates the presentation of revenue from buyers on a gross or net basis based on whether it acts as a principal or an agent in shipment of listed items between sellers and buyers. The Company does not control the shipping service, which is provided by the shipping provider. The Company is not primarily responsible for shipping and it does not assume any of the risks for the items shipped such as risk of damage or loss during shipping. The Company acts as an agent of the buyer in facilitating the shipping. As such, the Company reports revenue on a net basis which is the difference between the shipping fee paid by the buyer and the cost of shipping labels paid to the shipping provider.

Revenue from shipping facilitation is recognized upon transfer of the shipping label to the seller on behalf of the buyer.

The Company estimates chargebacks based on historical collectability rates. The Company records a reserve for chargebacks in accrued expenses and other accrued liabilities with an offset to general and administrative expenses.

Sales tax and other amounts collected on behalf of third parties are excluded from the transaction price.

Incentives

Under the referral program, an existing user (the referrer) earns an incentive (Posh Credit) when a new user (the referee) first buys an item on the Company’s platform. Posh Credits are not redeemable for cash and can only be applied for purchases on the Company’s platform. The Company records the incentive to the referrer, which is in exchange for a distinct referral service, as a liability at the time the incentive is earned by the referrer with a corresponding charge recorded to marketing expense in the condensed consolidated statements of operations. Credits and incentives issued to existing users for referring new users are contingent upon a new user completing an initial purchase on the Company’s platform and represent an incremental cost of obtaining a contract with a customer. The Company expenses such new user referral incentives as marketing expense when the referral incentives are earned because the amortization period would be one year or less.

The Company has several buyer incentive programs, which are offered to encourage buyer activity on the Company’s platform. These promotions reduce the fees for shipping facilitation charged by the Company. Accordingly, the Company records these incentives as a reduction to revenue from the buyer when the incentive is used by the buyer. Amounts in excess of cumulative shipping facilitation revenue earned are presented as marketing expense in the condensed consolidated statements of operations.

The Company participates in certain joint incentive programs with sellers that are recorded as a reduction to the fees received from the seller.

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The Company may elect to issue incentives to buyers for customer satisfaction purposes or for refunds. These incentives (which are in the form of Posh Credits) can be applied towards future orders and, thereby, result in a reduced fee earned by the Company from the buyer, or redeemable credits that can also be redeemed for cash. In cases where the seller performed as required by the Company’s TOS, the Company reduces shipping facilitation revenue earned on the transaction and any cumulative revenue earned from the same buyer for Posh Credits and redeemable credits granted. If the amount of the incentive exceeds cumulative revenues from the buyer, then the excess is presented as operations and support expense in the consolidated statements of operations. If refunds are provided in a case where the seller did not perform and the amount cannot be recovered from the seller, the refund is presented as a reduction of revenue. Referral incentives, joint incentives, refunds and buyer incentives are recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reduction to net revenue	$	2,478	$	2,491	$	8,478	$	7,152
Operations and support		1,706		1,687		5,562		5,171
Marketing		2,708		2,274		7,927		6,140
	$	6,892	$	6,452	$	21,967	$	18,463

Cost of Net Revenue

Cost of net revenue consists of costs associated with credit card processing, order transaction fees and hosting expenses associated with operating the Company’s platform. Cost of net revenue does not include depreciation and amortization.

Stock-Based Compensation

The Company measures and recognizes stock-based compensation expense for share-based awards issued to employees and consultants, consisting of stock options, restricted stock units (RSUs), and purchases under the 2021 Employee Stock Purchase Plan (ESPP), on the condensed consolidated statements of operations.

RSUs granted prior to the occurrence of a Qualified IPO vest upon the satisfaction of both time-based service and performance-based conditions. The time-based vesting condition for the majority of these awards is satisfied over four years. The performance-based vesting condition is satisfied upon the occurrence of a qualifying event, which is generally defined as a change in control transaction or the effective date of a Qualified IPO. Through December 31, 2020, no stock-based compensation expense had been recognized for RSUs with a liquidity event performance condition, as such qualifying event was not probable. Upon the completion of Company's IPO, the liquidity event performance condition was met. Accordingly, upon the effectiveness of the IPO, the Company recognized cumulative stock-based compensation expense determined using the grant-date fair values and the accelerated attribution method. The remaining stock-based compensation related to these awards will be recognized over the remaining time-based service over the remaining requisite service period using the accelerated attribution method. RSUs granted after the date of the Qualified IPO only include a time-based service condition. Accordingly, these awards will be measured using the grant date fair values and will be amortized on a straight-line basis over the requisite service period. Forfeitures for all stock-based awards are recognized as they occur.

The Company estimates the fair value of stock options granted to employees and directors and fair value of ESPP purchase rights issued under ESPP using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include:

•per share fair value of the underlying common stock;

•exercise price;

•expected term;

•risk-free interest rate;

•expected annual dividend yield; and

•expected stock price volatility over the expected term.

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For all stock options granted, the expected term is calculated using the simplified method. The Company does not have sufficient historical transactions in its own shares on which to base expected volatility and, therefore, uses the historical volatility of the stock price of similar publicly traded peer companies to estimate volatility of equity awards granted. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award.

Prior to the completion of the IPO, the fair value of the shares of common stock underlying the stock options has been determined by the board of directors as there was no public market for the common stock. The board of directors determined the fair value of the Company’s common stock by considering a number of objective and subjective factors including: contemporaneous third-party valuations of the Company’s common stock, the valuation of comparable companies, sales of redeemable convertible preferred stock to unrelated third-parties, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. After the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the Nasdaq Global Select Market.

Leases

Prior to the adoption of ASC 842

The Company leases office space under non-cancelable operating lease agreements. Certain of these arrangements have free rent, escalating rent payment provisions, and landlord funded leasehold incentives. Rent expense is recorded on a straight-line basis over the lease term. If a lease provides for fixed escalations of the minimum rental payments, the difference between the straight-line rent charged to expense and the amount payable under the lease is recorded as deferred rent in accrued expenses and other current liabilities, and other liabilities. Landlord funded leasehold incentives are recorded as deferred rent in accrued expenses and other current liabilities, and long-term portion of deferred rent and other liabilities and are recognized as an offset to rent expense using the straight-line method over the lease term.

Subsequent to the adoption of ASC 842

The Company determines if an arrangement is a lease at inception. Lease agreements generally contain lease and non-lease components. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of its lease assets and liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments for common area maintenance and utilities. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. As the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. Lease assets also include any prepaid lease payments and lease incentives. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

Operating lease assets and liabilities are recognized on the condensed consolidated balance sheet as operating lease right-of-use assets (ROU), operating lease liabilities, current and operating lease liabilities, noncurrent. Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term.

Concentrations of Risk

The Company currently uses a few carriers to handle all shipments, gateways to process payments and third-party vendors to host the Company’s information technology environment. A significant disruption in the operations of one of more of these vendors could have an adverse effect on the Company’s business, financial condition, and results of operations.

The majority of the Company’s cash and cash equivalents are held by one high-credit quality financial institution within the United States with balances maintained in excess of the FDIC insurance limits.

No customer accounted for 10% or more of the Company’s net revenue for the three and nine months ended September 30, 2022 and 2021.

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Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and since that date, has issued several ASUs to further clarify certain aspects of ASU 2016-02 and provide entities with practical expedients that may be elected upon adoption. This standard requires lessees to recognize all leases, including operating leases, on the balance sheet as a right-of-use (ROU) asset and lease liability, unless the lease is a short-term lease. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements – Leases (Topic 842). This update provides an alternative transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented. In June 2020, the FASB issued ASU 2020-05, deferring the effective date for one year for all other entities. The Company adopted this standard using the alternative transition method on January 1, 2022 and recorded $9.2 million right-of-use assets and a $14.5 million lease liability on its condensed consolidated balance sheet. As of January 1, 2022, $2.6 million of deferred rent and $2.7 million related to tenant improvement was derecognized upon adoption. As part of this adoption, the Company elected the package of transitional practical expedients to not reassess (1) whether any contracts that existed prior to adoption have or contain leases, (2) the classification of existing leases or (3) initial direct costs for existing leases. The Company also elected to continue to recognize lease payments related to short-term leases as an expense on a straight-line basis over the lease term.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For available for sale debt securities, credit losses will be presented as an allowance rather than as a write-down. In November 2019, the FASB issued ASU 2019-10, amending the effective dates. The Company adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The Company early adopted this standard on January 1, 2022 on a prospective basis. The adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

3. Revision of Prior Periods' Financial Statement

As previously disclosed in the Company’s 2021 Annual Report, during 2021, the Company identified prior period errors in its previously issued financial statements as of December 31, 2020 and for the years ended December 31, 2020 and 2019, as well as the first three quarters of 2021. These errors primarily related to the Company's calculation and recording of credit card chargebacks from one of its payment processors, which resulted in the overstatement of general and administrative expenses. The corresponding impact was an understatement of cash and cash equivalents and an overstatement of accrued expenses and other liabilities.

The Company evaluated the effect of these errors on prior periods under the guidance of Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) Topic 1.M, Materiality, codified in ASC 250, Accounting Changes and Error Corrections, and concluded that the errors were not material to the prior annual or interim periods. However, the Company determined it was appropriate to revise its previously issued financial statements. In connection with such revision, the Company also corrected other immaterial misstatements, primarily related to the recording of income taxes and misclassification of marketing expenses and net revenue.

Accordingly, in connection with the filing of this Quarterly Report on Form 10-Q, the Company has revised the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss, Changes in Stockholders’ (Deficit) Equity, and Cash Flows for the three and nine months ended September 30, 2021, and the related notes to revise for those errors.

The following table presents the effect of the correction of the misstatements and the resulting revision on the Condensed Consolidated Statements of Operations and Comprehensive Loss:

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	Three Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
	(in thousands, except per share data)
Net revenue	$	79,650		$	(187	)	$	79,463
Marketing		36,385			(187	)		36,198
General and administrative		12,070			(341	)		11,729
Total costs and expenses		86,888			(528	)		86,360
Loss from operations		(7,238	)		341			(6,897	)
Loss before provision for income taxes		(7,197	)		341			(6,856	)
Net loss		(7,197	)		341			(6,856	)
Comprehensive loss		(7,128	)		341			(6,787	)
	Nine Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
	(in thousands, except per share data)
Net revenue	$	242,363		$	(557	)	$	241,806
Marketing		104,578			(557	)		104,021
General and administrative		43,706			(1,389	)		42,317
Total costs and expenses		273,181			(1,946	)		271,235
Loss from operations		(30,818	)		1,389			(29,429	)
Loss before (benefit) provision for income taxes		(84,754	)		1,389			(83,365	)
(Benefit) provision for income taxes		(30	)		210			180
Net loss		(84,724	)		1,179			(83,545	)
Comprehensive loss		(83,010	)		1,179			(81,831	)
Net loss per share attributable to common stockholders, basic and diluted	$	(1.18	)	$	0.01		$	(1.17	)

The following table presents the effect of the correction of the misstatements on the Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity (in thousands):

	As Previously Reported			Adjustments		As Revised
As of January 1, 2021
Accumulated deficit	$	(126,509	)	$	3,003	$	(123,506	)
Total stockholders' deficit		(99,782	)		3,003		(96,779	)
As of and for the three months ended September 30, 2021
Net loss attributable to common stockholders		(7,197	)		341		(6,856	)
Accumulated deficit		(211,233	)		4,182		(207,051	)
Total stockholders' equity		418,235			4,182		422,417
As of and for the nine months ended September 30, 2021
Net loss attributable to common stockholders		(84,724	)		1,179		(83,545	)
Accumulated deficit		(211,233	)		4,182		(207,051	)
Total stockholders' equity		418,235			4,182		422,417

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The following table presents the effect of the correction of the misstatements on the Condensed Consolidated Statements of Cash Flows (in thousands):

	Nine Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
Net loss	$	(84,724	)	$	1,179		$	(83,545	)
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,188			(46	)		2,142
Net cash provided by operating activities		32,833			1,133			33,966
Cash and cash equivalents:
Beginning of year		235,834			3,068			238,902
End of year		589,028			4,201			593,229

4. Supplemental Financial Statement Information

Cash Equivalents

The following tables summarize the cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value of the cash equivalents as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022
	Cost or Amortized		Unrealized				Estimated Fair
	Cost		Gains		Losses		Value
Cash equivalents(1)
Money market funds	$	311,342	$	—	$	—	$	311,342
Total	$	311,342	$	—	$	—	$	311,342

(1)Included in cash and cash equivalents on the consolidated balance sheet as of September 30, 2022.

	December 31, 2021
	Cost or Amortized		Unrealized				Estimated Fair
	Cost		Gains		Losses		Value
Cash equivalents(1)
Money market funds	$	309,283	$	—	$	—	$	309,283
Total	$	309,283	$	—	$	—	$	309,283

(1)Included in cash and cash equivalents on the consolidated balance sheet as of December 31, 2021.

Property and Equipment, Net

Property and equipment, net consisted of the following as of the dates indicated (in thousands):

	September 30, 2022			December 31, 2021
Computer equipment and software	$	2,332		$	1,937
Developed website and software		6,856			5,876
Furniture and fixtures		1,438			1,433
Leasehold improvements and incentives		7,287			7,287
Total property and equipment, gross		17,913			16,533
Less accumulated depreciation and amortization		(11,664	)		(9,157	)
Property and equipment, net	$	6,249		$	7,376

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Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of the dates indicated (in thousands):

	September 30, 2022		December 31, 2021
Accrued advertising	$	9,966	$	10,176
Accrued sales tax		9,679		8,090
Accrued compensation and benefits		10,785		8,369
Accrued shipping		3,300		2,125
Accrued professional services		2,770		1,321
Contingent consideration		1,223		1,619
Other accrued and other current liabilities		9,862		9,222
Accrued expenses and other current liabilities	$	47,585	$	40,922

5. Fair Value Measurements

The following tables set forth the financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(1)
Money market funds	$	311,342	$	—	$	—	$	311,342
Total	$	311,342	$	—	$	—	$	311,342
Liabilities
Contingent consideration(2)	$	—	$	—	$	1,223	$	1,223
Total	$	—	$	—	$	1,223	$	1,223

(1)Included in cash and cash equivalents on the condensed consolidated balance sheet as of September 30, 2022.

(2)The fair value of contingent consideration was estimated using a Monte Carlo simulation and was based on significant inputs not observable in the market, thus classified as a Level 3 instrument. The inputs include the projected financial results of Suede One, Inc., historical volatility of the Company's and similar publicly traded peer companies' stock price and risk-free interest rate. See Note 7 (Business Combination).

	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(1)
Money market funds	$	309,283	$	—	$	—	$	309,283
Total	$	309,283	$	—	$	—	$	309,283
Liabilities
Contingent consideration(2)	$	—	$	—	$	1,619	$	1,619
Total	$	—	$	—	$	1,619	$	1,619

(1)Included in cash and cash equivalents on the condensed consolidated balance sheet as of December 31, 2021.

(2)The fair value of contingent consideration was estimated using a Monte Carlo simulation and was based on significant inputs not observable in the market, thus classified as a Level 3 instrument. The inputs include the projected financial results of Suede One, Inc., historical volatility of the Company's and similar publicly traded peer companies' stock price and risk-free interest rate. See Note 7 (Business Combination).

The following table represents the change in the contingent consideration (in thousands):

	Level 3
Balance as of December 31, 2021	$	1,619
Change in fair value		(396	)
Balance as of September 30, 2022	$	1,223

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There were no transfers of financial assets or liabilities into or out of Level 1, Level 2 or Level 3 for any of the periods presented.

6. Commitments and Contingencies

Litigation and Loss Contingencies

The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. From time to time, the Company is subject to legal proceedings incident to the ordinary course of business, such as intellectual property claims, labor and employment claims, and threatened claims, breach of contract claims, tax and other matters. As of September 30, 2022 and December 31, 2021, the Company is not a party to any legal proceeding that it believes is likely to have a material impact on its business, results of operations, or financial condition.

Indemnifications

The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including business partners, investors, contractors and the Company’s officers, directors and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claim because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the condensed consolidated statements of operations in connection with the indemnification provisions have not been material.

7. Business Combination

On October 12, 2021, the Company completed the acquisition of Suede One, Inc., a New York City-based sneaker authentication platform that combines machine learning, computer vision, and human review to conduct virtual authentication. Total cash consideration related to the acquisition was $6.6 million. The Company also agreed to pay up to an additional $2.5 million in cash upon certain earnout conditions being met by October 31, 2022. The estimated fair value of these earnout payments was determined based on management’s estimate of fair value using a Monte Carlo simulation model, which uses Level 3 inputs for fair value measurements. The acquisition date fair value of this contingent consideration liability was $1.6 million and is included as a component of the purchase price. Pro forma and revenue and earnings post-acquisition are not presented because the impacts are not material to the Company’s consolidated financial statements.

The acquisition was accounted for under the acquisition method of accounting. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. The Company recognized intangible assets of $1.3 million for developed technology and $0.2 million for customer relationships, which will be amortized over three years and one year, respectively. Goodwill arising from the acquisition is not deductible for tax purposes.

Subsequent to the acquisition, the Company recorded a $0.4 million tax benefit related to the release of the valuation allowance on its net deferred tax assets.

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed of Suede One, Inc. (in thousands):

Acquiree	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
Suede One, Inc.	$	8,116	$	(396	)	$	1,500	$	7,012

8. Goodwill and Intangible Assets

Goodwill, which is not subject to amortization, totaled $7.0 million as of September 30, 2022 and December 31, 2021. The Company completed a qualitative analysis during the fourth quarter of 2021. Based on the qualitative analyses performed, the Company determined that it was not more likely than not that goodwill was impaired and therefore determined that a quantitative analysis was not required. The Company did not recognize any goodwill impairment during the three and nine months ended September 30, 2022.

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Intangible assets consist of developed technology and customer relationships. Acquired intangibles are amortized on a straight-line basis over the respective estimated useful lives of the assets.

As of September 30, 2022 and December 31, 2021, the carrying values of intangible assets are as follows (in thousands):

	September 30, 2022
	Gross Book Value		Accumulated Amortization			Net Book Value
Developed technology	$	1,300	$	(421	)	$	879
Customer relationships		200		(194	)		6
Intangible assets, net	$	1,500	$	(615	)	$	885

	December 31, 2021
	Gross Book Value		Accumulated Amortization			Net Book Value
Developed technology	$	1,300	$	(96	)	$	1,204
Customer relationships		200		(44	)		156
Intangible assets, net	$	1,500	$	(140	)	$	1,360

As of September 30, 2022, developed technology and customer relationships have remaining useful lives of 2.0 years and less than a month, respectively. Amortization expense of intangible assets for the three and nine months ended September 30, 2022 was $0.2 million and $0.5 million, respectively. The Company did not recognize any intangible asset impairment losses during the three and nine months ended September 30, 2022.

As of September 30, 2022, the Company estimates future amortization expense of intangible assets as follows (in thousands):

2022 (remaining three months)	$	114
2023		433
2024		338
Total amortization expense	$	885

9. Leases

The Company leases its facilities for office space under non-cancelable operating leases with contractual lease periods expiring between 2022 and 2025. The Company has no finance leases as of September 30, 2022.

The components of operating lease expense were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Operating lease cost	$	1,005	$	3,019
Variable lease cost		102		266
Short-term lease cost		3		8
Total operating lease cost	$	1,110	$	3,293

Rent expense was $1.0 million and $3.0 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, operating leases had a weighted average remaining lease term of 1.7 years and a weighted average discount rate of 2.9%.

Supplemental cash flow information related to leases was as follows (in thousands):

	Nine Months Ended
	September 30, 2022
Cash paid for operating leases	$	4,621
New operating lease assets obtained in exchange for operating lease liabilities	$	307

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Future maturities of lease liabilities as of September 30, 2022 were as follows (in thousands):

	Operating Leases
2022 (remaining three months)	$	1,494
2023		6,193
2024		2,922
2025		90
Total undiscounted lease payments		10,699
Less: imputed interest		(263	)
Total lease liabilities		10,436
Less: current lease liabilities		5,918
Total non-current lease liabilities	$	4,518

Prior to the adoption of ASC 842, future minimum payments for noncancellable operating leases as of December 31, 2021 were as follows (in thousands):

2022	$	6,045
2023		6,105
2024		2,830
2025		41
Total minimum lease payments	$	15,021

10. Common Stock

Common stock reserved for future issuance was as follows as of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
2011 Stock Option and Grant Plan:
Options issued and outstanding		4,978,618		5,866,190
RSUs issued and outstanding		788,390		1,259,734
2021 Stock Option and Grant Plan:
Options issued and outstanding		37,027		35,571
RSUs issued and outstanding		7,613,272		3,176,885
Shares available for future grants		6,033,131		6,967,044
2021 Employee Stock Purchase Plan		2,680,017		2,000,000
Total shares of common stock reserved for    future issuance		22,130,455		19,305,424

11. Stock-Based Compensation Plan

2011 Stock Option and Grant Plan

In 2011, the Company adopted the 2011 Stock Option and Grant Plan, or the 2011 Plan. The 2011 Plan provides for the granting of stock options and restricted stock units to employees and non-employees of the Company. Options granted under the 2011 Plan may be either incentive stock options or non-qualified stock options. Incentive stock options (ISO) may be granted only to the Company’s employees (including officers and directors who are also employees). Non-qualified stock options (NSO) may be granted to the Company’s employees and non-employees.

Options issued under the 2011 Plan are granted at an exercise price of not less than 100% of the fair market value per share of the common stock on the grant date as determined by the board of directors. Options generally vest with respect to 25% of the shares one year after the options’ vesting commencement date, and the remainder vest in equal monthly installments over the following 36 months. Options have a maximum term of ten years. RSUs issued under the 2011 Plan are subject to terms and conditions as determined by the Company’s board of directors, which may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period.

The 2011 Plan has been replaced by the 2021 Plan as defined below.

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2021 Stock Option and Incentive Plan

In connection with the Company’s IPO, the Company adopted the 2021 Stock Option and Incentive Plan, or the 2021 Plan, in January 2021. The 2021 Plan replaced the 2011 Plan, as the Company’s board of directors determined not to make additional awards under the 2011 Plan following the completion of the Company’s IPO. The Company initially reserved 10,000,000 shares of Class A common stock for the issuance of awards under the 2021 Plan. The 2021 Plan provides that the number of shares reserved and available for issuance under the 2021 Plan will automatically increase each January 1, beginning on January 1, 2022, by 5% of the number of outstanding shares of Class A and Class B common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee.

Options issued under the 2021 Plan are granted at an exercise price of not less than 100% of the fair market value per share of the common stock on the grant date as determined by the board of directors. Options granted to new hired employees typically vest with respect to 25% of the shares on the first Company established vest date after the first anniversary of the employee’s date of hire, and ratably each quarter over the ensuing 12-quarter period. Options have a maximum term of ten years. RSUs granted under the 2021 Plan are subject to terms and conditions as determined by the Company’s compensation committee, which may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. RSUs granted to newly hired employees typically vest 25% on the first Company established vest date after the first anniversary of the employee’s date of hire and ratably each quarter over the ensuing 12-quarter period. The maximum term for RSUs granted under the Plan will not exceed seven years from the date of grant.

Employee Stock Purchase Plan

In connection with the Company’s IPO, the Company adopted the 2021 Employee Stock Purchase Plan (ESPP) in January 2021. Under the ESPP, the Company will make offerings to its employees to purchase shares under the ESPP. The Company initially reserved 2,000,000 shares of Class A common stock for issuance under the ESPP. The reserve will automatically increase on January 1st of each calendar year for a period of up to ten years, commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (1) 1% of the total number of shares of Class A and Class B common stock outstanding on December 31st of the preceding fiscal year, (2) 3,000,000 shares of Class A common stock, and (3) a number of shares determined by the Company's compensation committee. Offering periods are generally six months long and begin on June 4th and December 4th of each year, except for the initial offering period. The Company's initial offering period under the ESPP began on January 1, 2022 and ended on June 3, 2022. At the end of each offering period, eligible employees are able to purchase shares at 85% of the lower of the fair market value of the Company's Class A common stock on the first trading day of the offering period or on the date of purchase. Pursuant to the terms of the Merger Agreement, the purchase date for the current offering under the ESPP will be the earlier of (i) December 2, 2022 or (ii) no later than three business days immediately preceding the closing date of the Merger (such date, the “ESPP Termination Date”). There will be no new offering periods after the end of the current offering period and the Company’s ESPP will terminate as of the ESPP Termination Date.

As of September 30, 2022, the total unrecognized stock-based compensation cost related to ESPP outstanding was $0.2 million, to be recognized in the fourth quarter of 2022.

Option to Purchase Common Stock

The following table summarizes option activity for the nine months ended September 30, 2022:

	Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (In Thousands)
Balances at December 31, 2021		5,901,761		$	5.82		5.6	$	67,787
Granted		1,456			35.01
Exercised		(840,625	)		2.79
Forfeited and cancelled		(46,947	)		11.17
Balances at September 30, 2022		5,015,645		$	6.28		5.3	$	49,027
Vested and expected to vest as of September 30, 2022		5,015,645		$	6.28		5.3	$	49,027
Vested and exercisable as of September 30, 2022		4,706,192		$	5.77		5.1	$	47,935

The stock price per share that was used to determine the aggregate intrinsic value of outstanding stock options as of September 30, 2022 and December 31, 2021 was $15.67 and $17.03, respectively. As of September 30, 2022, the stock price per share that was used to determine both the vested and expected to vest options and vested and exercisable options was $15.67.

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There were no stock options granted during the three months ended September 30, 2022. The fair value of stock options granted during the nine months ended September 30, 2022 was $17.16 each. The total intrinsic value of options exercised during the three and nine months ended September 30, 2022 was $1.8 million and $8.9 million, respectively.

As of September 30, 2022, the total unrecognized stock-based compensation cost related to unvested options outstanding was $1.9 million, to be recognized over a weighted-average period of 0.9 year.

Restricted Stock Units

RSUs granted prior to the IPO under the 2011 Plan had both time-based service and performance-based vesting conditions. Upon the effectiveness of the IPO, the performance-based vesting condition was satisfied, and therefore, the Company recognized a one-time cumulative stock-based compensation expense of $15.6 million using the accelerated attribution method for the portion of the awards for which the service-based vesting condition has been fully or partially satisfied. Upon the IPO, shares were issued to satisfy the vesting of RSUs with a performance condition. RSUs granted after the IPO under the 2021 Plan generally vest upon the satisfaction of a time-based service condition.

The following table summarizes RSU activity for the nine months ended September 30, 2022:

	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2021		4,436,619		$	26.80
Granted		5,606,406			12.37
Vested		(880,940	)		23.48
Forfeited and cancelled		(760,423	)		23.25
Nonvested as of September 30, 2022		8,401,662		$	17.83

As of September 30, 2022, the total unrecognized stock-based compensation expense related to unvested RSUs was $119.6 million, which will be recognized over a weighted-average period of 2.9 years.

Stock-Based Compensation

The assumptions used to determine the fair value of the stock options and ESPP purchase rights granted for the periods indicated were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Expected dividend yield	—	—	—	—
Expected volatility	—	51.7%	51.7% - 84.1%	52.0%
Risk-free rate	—	1.1%	0.2% - 1.7%	0.6%
Expected term (in years)	—	6.0	0.4 - 6.0	5.6

Stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operations and support	$	1,558	$	758	$	3,906	$	3,810
Research and development		5,732		3,145		15,665		16,882
Marketing		1,942		969		4,866		5,297
General and administrative		4,242		1,796		9,848		12,923
Total	$	13,474	$	6,668	$	34,285	$	38,912

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12. Net Loss Per Share Attributable to Common Stockholders

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. In connection with the IPO, the Company established two classes of authorized common stock: Class A common stock and Class B common stock. As a result, all then-outstanding shares of common stock were converted into shares of Class B common stock. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock.

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock were identical, except with respect to voting. As the liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis and the resulting net loss per share attributable to common stockholders were, therefore, the same for both Class A and Class B common stock on an individual or combined basis.

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods indicated (in thousands, except share and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Numerator:
Net loss attributable to common stockholders, basic and diluted	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
Denominator:
Weighted-average shares used to compute net loss per share    attributable to common stockholders, basic and diluted		78,682			76,479			78,160			71,639
Net loss per share attributable to common stockholders,   basic and diluted	$	(0.30	)	$	(0.09	)	$	(0.77	)	$	(1.17	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the dates indicated because including them would have had an anti-dilutive effect (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
RSUs		8,402		2,444		8,402		2,444
Stock options		5,016		6,105		5,016		6,105
ESPP		60		—		60		—
Total		13,478		8,549		13,478		8,549

13. Income Taxes

The following table summarizes the Company’s effective tax rate for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Loss before income taxes	$	(23,420	)	$	(6,856	)	$	(60,060	)	$	(83,365	)
Provision for income taxes		120			—			381			180
Effective tax rate		(0.51	)%		0.00	%		(0.63	)%		(0.22	)%

The tax expense for the three and nine months ended September 30, 2022 was primarily attributable to pre-tax foreign earnings. The tax expense for the three and nine months ended September 30, 2021 was primarily attributable to pre-tax foreign earnings.

The Company’s effective tax rate for all periods presented differs from the U.S. statutory tax rate primarily due to valuation allowance recorded against domestic losses and the tax rate differences between the United States and foreign countries.

The Company has a full valuation allowance on its U.S. federal and state deferred tax assets. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized through future operations. As a result of the Company’s analysis of all available objective evidence, both positive and negative, as of September 30, 2022 and December 31, 2021, management believes it is more likely than not that the deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its deferred tax assets.

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14. Subsequent Events

On October 3, 2022, the Company entered into the Merger Agreement by and among the Company, Naver, Proton Parent and Merger Sub, pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the Merger as an indirect subsidiary of Naver. As a result of the Merger, each share of Company Common Stock outstanding immediately prior to the effective time of the Merger (subject to certain exceptions set forth in the Merger Agreement) will automatically be canceled and converted into the right to receive $17.90 in cash, without interest and subject to applicable withholding taxes. If the Merger is consummated, the Company’s Class A common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.

The Merger, expected to close in the first quarter of 2023, is conditioned upon, the approval of the Merger Agreement by the Company’s stockholders, the expiration of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

In October 2022, the Company granted 317,772 RSUs with a grant date fair value of $17.73 per share. The RSUs are subject to service-based vesting conditions, which are generally satisfied over two to four years.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read together with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes and our Annual Report on Form 10-K filed with the SEC on March 30, 2022. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. See the discussion under “Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q for more information. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and particularly 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 SEC. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full calendar year or any other period. The unaudited condensed consolidated interim financial statements for the quarter and nine months ended September 30, 2021 have been revised to correct prior period errors as discussed in Note 3 “Revision of Prior Periods' Financial Statement” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Accordingly, this Management’s Discussion and Analysis of Financial Condition and Results of Operations reflects the effects of the revisions.

Overview

We are a social marketplace that combines the human connection of a physical shopping experience with the scale, reach, ease, and selection benefits of eCommerce. In doing so, we bring the power of community to buying and selling online. We created Poshmark in 2011 to make buying and selling simple, social, and fun. Pairing technology with the inherent human desire to socialize, our marketplace creates passion and personal connections among users. We dynamically curate our marketplace into lifestyle categories that our users love, including apparel, accessories, footwear, home, beauty, and pets. Powered by our proprietary technology, our social marketplace is purpose-built to enable simple transactions, seamless logistics, and an engaging experience at scale. As of September 30, 2022, we had 8.2 million Active Buyers.

We empower people to sell a few items or to become successful entrepreneurs by providing them with end-to-end seller tools. We refer to this as “making selling a superpower.” Our comprehensive infrastructure makes it easy for sellers to build their businesses with seamless listing, merchandising, promotion, pricing, and shipping. Sellers use content, inventory selection, and social interactions to monetize their listings and drive growth. Our transparent fee structure aligns our success with the success of our sellers. Our fee is 20% of the final price for sales $15 and over, or a flat rate of $2.95 for sales under $15. We attract, engage, and retain sellers by offering the community the benefits of social connection with the ability to combine personal passion and economic empowerment. We do not own or manage inventory as products are listed, managed, sold, and shipped by our sellers, utilizing our transaction tool that makes the selling process seamless and easy. This asset-light model creates scalability and favorable working capital dynamics.

Our social features make the discovery and purchase process simple and enticing for buyers, fostering high engagement and retention. The engagement of our community has fueled strong growth in our business, supported by attractive unit economics and efficient user acquisition. We enable buyers to discover, connect, and curate their network and news feed with that of other users who share similar styles and personal preferences, creating a fun shopping experience. Our marketplace is vast, with sellers listing millions of secondhand and new items across multiple categories. We use data-driven personalization to customize each user’s feed to feature the most relevant listings and make it easy to quickly search for and find products of interest. Furthermore, sellers list a variety of items across all price points, with the added benefit of being able to negotiate offers directly with buyers seeking to optimize their budget, allowing sellers to manage their listings to achieve their individual objectives. Because our marketplace features a massive selection of secondhand items, buyers are also able to support their personal style while minimizing their environmental impact.

In the three months ended September 30, 2022 and 2021, we had revenue of $88.4 million and $79.5 million, respectively, representing a 11% growth rate. In the three months ended September 30, 2022, we generated a net loss of $23.5 million compared to a net loss of $6.9 million in the three months ended September 30, 2021.

Potential Merger with Naver

On October 3, 2022, we entered into the Merger Agreement, by and among Poshmark, Naver, Proton Parent and Merger Sub, pursuant to which Merger Sub will merge with and into Poshmark, with Poshmark surviving the Merger as an indirect subsidiary of Naver. As a result of the Merger, each share of Company Common Stock outstanding immediately prior to the effective time of the Merger (subject to certain exceptions set forth in the Merger Agreement) will, at the effective time, automatically be canceled and converted into the right to receive $17.90 in cash, without interest and subject to applicable withholding taxes. If the Merger is consummated, our Class A common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.

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The Merger is conditioned upon, among other things, the approval of the Merger Agreement by our stockholders, the expiration of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and other customary closing condition.

Key Factors Affecting Our Performance

Growth and Retention of Users. We focus on attracting new users and retaining existing users. New users and the social and transactional activities they contribute help keep existing users more active, increasing their lifetime value over time. Users engage in many ways on our social marketplace: they connect, they browse, they buy, and they sell. The positive relationship between new users and existing users illustrates the network effects of our marketplace. As of September 30, 2022, we had 8.2 million Active Buyers.

User Engagement. The engagement of our community has fueled strong growth in our business, supported by attractive unit economics and efficient user acquisition. We believe that cultivating a robust network of users over the longer-term is crucial to bolstering broader community engagement, growing social interactions, and increasing gross merchandise value (GMV). Users can engage on our marketplace in a variety of activities that range from shopping and social interactions to buying and selling. The continuous increase in users, social interactions, and listings has led to steady activations of buyers and sellers across cohorts, resulting in increasing GMV for these cohorts.

Investments in Growing Our User Community. We have invested substantially in marketing to grow our user community and drive further awareness of our brand. These investments have enabled us to grow our base of new users, buyers, and sellers while continuing to retain buyers and sellers, resulting in strong growth of our GMV and revenue. Marketing expenses represented 48% and 46% of revenue in the three months ended September 30, 2022 and 2021, respectively. We intend to manage our marketing spend to balance growth and profitability. While we have seen fluctuations and uncertainty in user acquisition costs, partially due to Apple's policy change that limits the ability of advertisers to collect user data, we will continue to invest in user acquisition and retention while the underlying user unit economics indicate the return on investment is strong.

Investments in Platform Innovation. We invest in both the people and technology behind our platform. We also intend to continue to make significant investments in the technology and infrastructure of our platform to attract and retain buyers and sellers, expand the capabilities and scope of our platform, and enhance the user experience. We expect to continue to make significant investments to attract and retain employees, particularly engineers, data scientists, designers, product management, and operations personnel. All functions are important, and we intend to invest in our people to help us drive additional efficiencies across our marketplace. In addition, we may invest in new and existing businesses that may lower our margins temporarily but may enhance our platform capabilities, deliver revenue growth, and enable us to achieve and maintain long-term profitability.

International Expansion. We began operations in Canada, the first country we expanded to after the United States, in May 2019. In February 2021, we expanded our operations to Australia. In September 2021, we launched operations in India. International expansion may impact our financial performance in the short term. As we continue our global expansion, we believe international demand for our platform will develop and increase. Accordingly, we believe there is a significant opportunity to grow our international business. We have invested, and plan to continue to invest, in the adoption of our platform and solutions internationally, including localization of our platform and the addition of critical capabilities to our platform required to serve those local markets.

Impact of the COVID-19 Pandemic. The COVID-19 pandemic has impacted our business to date and may continue to impact our business in ways that remain unpredictable. In early 2020, the COVID-19 pandemic impacted our business and operations, in which we experienced lower year-over-year GMV growth for the quarter ended March 31, 2020. We have since seen our GMV growth rebound as buyer and seller activity resumed, but such trends may not continue and could be reversed. While COVID-related restrictions have eased throughout 2021 and 2022, there remains substantial uncertainty about the pandemic’s impact on the global economy, e-commerce, and global macroeconomic conditions that impact consumer spending. In particular, as federal and state governmental aid programs initiated in connection with the pandemic are reduced or terminated, and as inflationary pressures rise, consumer discretionary spending would likely decrease, which would have a negative impact on our business.

As of September 30, 2022, we have opened our offices in accordance with local guidelines and regulations, though a remote work model remains largely in place. Future developments, such as new virus variants, actions to contain the pandemic or treat its impact, or a resurgence of offline shopping demand could adversely affect our business, results of operations, liquidity, and financial condition in future periods. The conditions caused by the pandemic are still evolving and we will continue to evaluate the potential impact of the pandemic on our business. See the section titled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 30, 2022 for further discussion of the possible impact of the COVID-19 pandemic on our business, operations and financial condition.

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Seasonality. Our business is seasonal in nature as it is affected by the cyclicality of the consumer as well as broader market conditions. Historically, we have often seen both stronger growth in the number of Active Users and Active Buyers and in engagement during the first quarter of the year. In addition, we have seen higher GMV in the fourth quarter of the year, followed by the third quarter, which we believe is due in part to the higher price points of seasonal apparel and footwear and the holiday season. We believe the recent growth in our business, as well as the recent effects of sales taxes and the COVID-19 pandemic, have partially masked these trends to date, and we expect the impact of seasonality to be more pronounced in our future quarterly results as our business matures.

Initial Public Offering

Our registration statement on Form S-1 related to our initial public offering (IPO) was declared effective on January 13, 2021, and our Class A common stock began trading on the Nasdaq Global Select Market on January 14, 2021. On January 19, 2021, we closed our IPO, in which we issued and sold 6,600,000 shares plus an additional 990,000 shares subject to the underwriters’ over-allotment option of our Class A common stock at the public offering price of $42.00 per share. We received net proceeds of $292.3 million after deducting underwriting discounts and commissions and offering expenses.

Components of Results of Operations

Net Revenue

We generate revenue from sellers for fees earned when they sell items they have listed on our social marketplace to buyers (20% of the final price for sales $15 and over, or a flat rate of $2.95 for sales under $15). The buyer also pays a shipping label fee as part of their order. On some orders, the shipping label fee exceeds our shipping label cost, which we record as revenue. For the three and nine months ended September 30, 2022, this revenue was 5% and 4% of our total net revenue, respectively. For each of the three and nine months ended September 30, 2021, this revenue was 4% of our total net revenue. Our revenue is recognized when we satisfy our performance obligations. We report both revenue from buyers and revenue from sellers based upon the net amount earned, which is reduced by certain buyer and seller incentives.

Costs and Expenses

Cost of Net Revenue. Cost of net revenue primarily consists of costs associated with credit card processing, transaction fees for order related payments, and hosting expenses associated with operating our platform. Cost of net revenue does not include depreciation and amortization.

We expect cost of net revenue to increase in absolute dollars in future periods and to vary from period to period as a percentage of net revenue for the foreseeable future as we grow our platform by increasing Active Buyers and generating higher GMV.

Operations and Support. Operations and support expense primarily consists of personnel-related compensation costs, including stock-based compensation, incurred in providing support to users of our platform including authentication services that we provide. This expense also includes postage and shipping costs that we incur primarily from order losses and cancellations, and credits and incentives issued to buyers for customer satisfaction purposes in excess of shipping facilitation revenue.

We expect that operations and support expenses will increase in absolute dollars for the foreseeable future as we continue to grow our operations and hire additional employees to support the scaling of our business. To the extent we are successful in becoming more efficient in supporting our users, we would expect operations and support expenses as a percentage of revenue to decrease over the long term.

Research and Development. Research and development expense consist primarily of compensation expenses for engineering, product development, and design employees, including stock-based compensation, expenses associated with ongoing improvements to and maintenance and testing of our platform offerings including website, mobile apps, and other products, and other research and development programs. Research and development expenses are expensed as incurred. We capitalize certain costs associated with website development and software for internal use.

We expect that research and development expenses will increase in absolute dollars and vary from period to period as a percentage of revenue for the foreseeable future as we continue to invest in research and development activities relating to ongoing improvements to and maintenance and testing of our platform offerings including website, mobile apps, and other products, and other research and development programs, including the hiring of engineering, product development, and design employees to support these efforts.

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Marketing. Marketing expense primarily consists of expenses associated with personnel-related compensation costs, including stock-based compensation, and costs related to user acquisition, public relations, marketing events such as Posh Parties, and business development. User acquisition costs primarily consist of costs associated with acquiring new users by spend on advertising channels such as television, Google, Facebook, Instagram, Snapchat, and TikTok. These marketing expenses also include promotional credits and incentives issued to buyers to encourage buyer activity on our platform in excess of shipping facilitation revenue and cost of referral incentives for new user acquisition. We plan to continue to invest in our marketing efforts, including hiring additional employees, in order to attract new users.

We expect that marketing expenses will increase in absolute dollars and vary from period to period as a percentage of revenue for the foreseeable future as we plan to continue to invest in marketing to grow the number of Active Users and Active Buyers and increase our brand awareness. The trend and timing of our brand marketing expenses will depend in part on the timing of marketing campaigns.

General and Administrative. General and administrative expense consists primarily of employee related costs including stock-based compensation for those employees associated with administrative services such as legal, human resources, information technology, accounting, and finance, and all related costs associated with our facilities, such as rent and office administration. These expenses also include certain third-party consulting services, facilities, IT services, meals and other corporate costs not allocated to other expense categories. As part of the Merger, the Company expects to incur material non-recurring expenses contingent on the deal consummation including banker fees and legal fees.

We expect that general and administrative expenses will increase in absolute dollars and vary from period to period as a percentage of revenue for the foreseeable future as we continue to invest in personnel, corporate infrastructure, and systems required to support our strategic initiatives, the growth of our business, and our compliance and reporting obligations, and controls to enable our internal support functions to scale with the growth of our business. We expect to incur additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on a national securities exchange, expenses related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and expenses for general and director and officer insurance, investor relations, and professional services. We also expect rent expense and other facilities related costs to continue to increase in the future.

Depreciation and Amortization. Depreciation and amortization expense primarily consists of depreciation of computer equipment and software, furniture and fixtures, leasehold improvements, website development and software for internal use and amortization of intangible assets.

We expect that depreciation and amortization expense will increase in absolute dollars as we continue to build out our network infrastructure, recognize amortization expense from acquired intangible assets resulting from acquisitions and establish new office locations to support our growth.

Interest Income

Interest income primarily relates to amounts earned on our cash and cash equivalents.

Other Expense, Net

Other expense, net mainly relates to changes in fair value of the convertible notes, redeemable convertible preferred stock warrants and contingent consideration relating to acquisition, and foreign exchange remeasurement gains and losses recorded from consolidating our foreign subsidiaries at each period end.

Provision for Income Taxes

Our provision for income taxes consists primarily of foreign taxes and state minimum taxes in the United States. As we expand the scale of our international business activities, any changes in the U.S. and foreign taxation of such activities may increase our overall provision for income taxes in the future. We have established a valuation allowance for our U.S. deferred tax assets, including federal and state net operating losses.

We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized by way of expected future taxable income in the United States.

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Results of Operations

The following tables set forth our condensed consolidated results of operations data and such data as a percentage of net revenue for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in thousands)
Net revenue	$	88,428		$	79,463		$	268,430		$	241,806
Costs and expenses (1):
Cost of net revenue, exclusive of depreciation and    amortization		14,915			12,082			44,915			37,798
Operations and support		15,513			13,199			46,770			41,062
Research and development		18,189			12,325			52,457			43,574
Marketing		42,613			36,198			129,606			104,021
General and administrative		20,473			11,729			53,281			42,317
Depreciation and amortization		1,000			827			3,033			2,463
Total costs and expenses		112,703			86,360			330,062			271,235
Loss from operations		(24,275	)		(6,897	)		(61,632	)		(29,429	)
Interest income		1,586			77			2,145			201
Other expense, 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		(37	)		—			396			—
Foreign exchange loss, net		(694	)		(36	)		(969	)		(220	)
		(731	)		(36	)		(573	)		(54,137	)
Loss before provision for income taxes		(23,420	)		(6,856	)		(60,060	)		(83,365	)
Provision for income taxes		120			—			381			180
Net loss attributable to common stockholders	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)

(1)Costs and expenses include stock-based compensation expense as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Operations and support	$	1,558	$	758	$	3,906	$	3,810
Research and development		5,732		3,145		15,665		16,882
Marketing		1,942		969		4,866		5,297
General and administrative		4,242		1,796		9,848		12,923
Total	$	13,474	$	6,668	$	34,285	$	38,912

Comparison of Three and Nine Months Ended September 30, 2022 and 2021

Net Revenue

	Three Months Ended September 30,				Change					Nine Months Ended September 30,				Change
	2022		2021		$		%			2022		2021		$		%
	(dollars in thousands, except percentages)
Net revenue	$	88,428	$	79,463	$	8,965		11	%	$	268,430	$	241,806	$	26,624		11	%

Net revenue increased $9.0 million for the three months ended September 30, 2022 compared to the same period in 2021, and $26.6 million for the nine months ended September 30, 2022 compared to the same period in 2021. This growth was primarily due to an increase in the volume of GMV on our marketplace to a total of $0.5 billion, an increase of 7%. The increase in GMV was substantially driven by the increase in Active Buyers on the platform to 8.2 million for the trailing 12 months ended September 30, 2022, a 13% increase compared to the same period in 2021.

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Cost of Net Revenue

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
Cost of net revenue	$	14,915		$	12,082		$	2,833		23	%	$	44,915		$	37,798		$	7,117		19	%
Percentage of revenue		17	%		15	%							17	%		16	%

Cost of net revenue increased $2.8 million for three months ended September 30, 2022 compared to the same period in 2021. The increase was driven by a $1.7 million increase in costs related to overall volume increases on our marketplace, including increased credit card processing fees and associated expense, and a $1.1 million increase in data hosting costs to support the increased usage of our platform and upgrades we made to our systems which were required to support our growth.

Cost of net revenue increased $7.1 million for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was driven by an increase in data hosting costs of $3.8 million to support the increased usage of our platform and upgrades we made to our systems which were required to support our growth, and a $3.3 million increase in costs related to overall volume increases on our marketplace, including increased credit card processing fees and associated expenses.

Operations and Support

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
Operations and support	$	15,513		$	13,199		$	2,314		18	%	$	46,770		$	41,062		$	5,708		14	%
Percentage of revenue		18	%		17	%							17	%		17	%

Operations and support expense increased $2.3 million for the three months ended September 30, 2022 compared to the same period in 2021, primarily driven by an increase in customer service and support personnel costs.

Operations and support expense increased $5.7 million for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily driven by the combined effect from a $3.7 million increase in customer service and support personnel costs, a $0.6 million increase in credits and incentives issued to users for the purposes of dispute resolution, and a $0.4 million increase in net shipping costs as a result of our growth.

Research and Development

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
Research and development	$	18,189		$	12,325		$	5,864		48	%	$	52,457		$	43,574		$	8,883		20	%
Percentage of revenue		21	%		16	%							20	%		18	%

Research and development expense increased $5.9 million for the three months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to a $5.5 million increase in engineering personnel costs to support the growth of our business as we launch new innovations and improve functionality on our platform, and a $0.3 million increase in development-related services.

Research and development expense increased $8.9 million for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to a $7.8 million increase in engineering personnel costs required to support the growth of our business as we launch new innovations and improve functionality on our platform, and a $0.8 million increase in development-related services.

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Marketing

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
Marketing	$	42,613		$	36,198		$	6,415		18	%	$	129,606		$	104,021		$	25,585		25	%
Percentage of revenue		48	%		46	%							48	%		43	%

Marketing expense increased $6.4 million for the three months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to a $3.7 million increase in spending on marketing programs, including increased spending on television ad campaigns and digital marketing, and a $2.7 million increase in marketing personnel costs to support the growth of our business.

Marketing expense increased $25.6 million for the nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily due to a $21.6 million in spending on marketing programs, including increased spending on television ad campaigns and digital marketing, and a $4.0 million increase in marketing personnel costs to support the growth of our business.

General and Administrative

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
General and administrative	$	20,473		$	11,729		$	8,744		75	%	$	53,281		$	42,317		$	10,964		26	%
Percentage of revenue		23	%		15	%							20	%		18	%

General and administrative expense increased $8.7 million for the three months ended September 30, 2022 compared to the same period in 2021. This increase was primarily driven by a $4.2 million increase in personnel costs, a $4.1 million increase in legal and consulting fees required to support our public company transition, and increased IT and facilities services fees of $0.4 million to support the growth of our business.

General and administrative expense increased $11.0 million for the nine months ended September 30, 2022 compared to the same period in 2021. This increase was primarily driven by a $6.4 million increase in legal and consulting fees required to support our public company transition, a $2.8 million increase in personnel costs, increased IT and facilities services fees of $1.1 million to support the growth of our business, and increased insurance costs of $0.2 million required as a result of becoming a public company.

Depreciation and Amortization

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
Depreciation and amortization	$	1,000		$	827		$	173		21	%	$	3,033		$	2,463		$	570		23	%
Percentage of revenue		1	%		1	%							1	%		1	%

Depreciation and amortization expense increased for the three and nine months ended September 30, 2022 compared to the same period in 2021. The increase was primarily driven by an increase in amortization of intangible assets, with no comparable activity in the same period in 2021.

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Interest Income

	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2022			2021			$		%			2022			2021			$		%
	(dollars in thousands, except percentages)
Interest income	$	1,586		$	77		$	1,509		1,960	%	$	2,145		$	201		$	1,944		967	%
Percentage of revenue		2	%		0	%							1	%		0	%

Interest income increased for the three and nine months ended September 30, 2022 compared to the same period in 2021, primarily driven by higher interest earned from our cash equivalents.

Other Expense, Net

	Three Months Ended September 30,						Change						Nine Months Ended September 30,						Change
	2022			2021			$			%			2022			2021			$		%
	(dollars in thousands, except percentages)
Other expense, net	$	(731	)	$	(36	)	$	(695	)		1,931	%	$	(573	)	$	(54,137	)	$	53,564		(99	)%
Percentage of revenue		(1	)%		(0	)%								(0	)%		(22	)%

Other expense, net increased for the three months ended September 30, 2022 compared to the same period in 2021 primarily due to fluctuation in foreign exchange rates. Other expense, net decreased $53.6 million for the nine months ended September 30, 2022 compared to the same period in 2021. The decrease was primarily due to a change in fair value of the convertible notes, and the change in fair value of the redeemable convertible preferred stock warrant liability, with no comparable activity in the same period in 2022.

Provision for Income Taxes

	Three Months Ended September 30,						Change			Nine Months Ended September 30,						Change
	2022			2021			$		%	2022			2021			$		%
	(dollars in thousands, except percentages)
Provision for income taxes	$	120		$	—		$	120	NM*	$	381		$	180		$	201		112	%
Percentage of revenue		0	%		0	%					0	%		0	%

* NM-not meaningful

The change in our provision for income taxes was primarily attributable to pre-tax foreign earnings.

Key Operating and Non-GAAP Financial Metrics

We collect and analyze operating and financial data to evaluate the health of our community, allocate our resources (such as capital, time, and technology investments), and assess the performance of our business. In addition to revenue, net (loss) income, and other results under GAAP, the key operating and financial metrics we use are GMV, Active Buyers, and Adjusted EBITDA.

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Gross Merchandise Value. Our gross merchandise value, or GMV, 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.

GMV

($ in millions)

 

Our GMV grew 7% from $442.5 million in the three months ended September 30, 2021 to $475.6 million in the three months ended September 30, 2022. Our quarterly GMV has increased year-over-year for the past nineteen quarters. We have continued to add users and enhance our social marketplace with various initiatives and product updates, including the launch of Posh Shows, our live buying and selling product, the rollout of shipping label QR codes, a printer-less shipping option, addition of Select All, a tool that facilitates the bulk sharing of listings, and release of Scale-to-Fit Photos, a feature that improves the listing experience.

Active Buyers. 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. An Active Buyer could have more than one account if they were to use a separate unique email address to set up each account. The number of Active Buyers is a key driver of GMV and revenue, as well as a measure of the scale and growth of our buyer community. We believe it is also an important indicator of our ability to convert user activity on our marketplace into transactions. The number of Active Buyers has increased steadily every quarter as we attract and retain users. Active Buyers can be new users to our marketplace who make a purchase, existing users who convert into buyers for the first time as our marketplace strengthens with more sellers and items, or repeat buyers.

Active Buyers

(in thousands)

 

5,713 6,032 6,231 5,374 4,952 4,550 4,190 3,734 3,345 2,953 2,657 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 Active Buyers measured as of the last day of the quarter presented

Active Buyers measured as of the last day of the quarter presented

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Adjusted EBITDA. We define Adjusted EBITDA as net (loss) income attributable to common stockholders, excluding depreciation and amortization, stock-based compensation expense, loss contingency accrual, interest income, other income (expense), net, change in accrued sales tax, provision (benefit) for income taxes, and undistributed earnings attributable to participating securities. Adjusted EBITDA is a key performance measure used by our management and board of directors to assess our operating performance and the operating leverage in our business. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the income and expenses that we exclude in Adjusted EBITDA. Accordingly, we believe that Adjusted EBITDA provides 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. See “Reconciliation of Non-GAAP Financial Measures” for more information and for a reconciliation of net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA.

Adjusted EBITDA

($ in millions)

 

GAAP and Non-GAAP Financial Measures

We also review the following GAAP and non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in thousands)
Net Loss	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
Net Loss Margin(1)		(27	)%		(9	)%		(23	)%		(35	)%
Adjusted EBITDA	$	(8,001	)	$	598		$	(22,514	)	$	11,946
Adjusted EBITDA Margin(2)		(9	)%		1	%		(8	)%		5	%

(1)Net Loss Margin is calculated by dividing Net Loss for a period by revenue for the same period.

(2)Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Reconciliation of Non-GAAP Financial Measures

We use Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, and to evaluate the effectiveness of our business strategies. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish similar metrics. Furthermore, this metric has certain limitations in that it does not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations that are necessary to run our business. Thus, our Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

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We compensate for these limitations by providing a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to the related GAAP financial measure, net loss attributable to common stockholders. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with their respective related GAAP financial measures.

The following table provides a reconciliation of net loss to Adjusted EBITDA:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in thousands)
Net loss attributable to common stockholders	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
Adjusted to exclude the following:
Depreciation and amortization		1,000			827			3,033			2,463
Stock-based compensation		13,474			6,668			34,285			38,912
Loss contingency accrual		1,800			—			1,800			—
Interest income		(1,586	)		(77	)		(2,145	)		(201	)
Other expense, net		731			36			573			54,137
Provision for income taxes		120			—			381			180
Adjusted EBITDA	$	(8,001	)	$	598		$	(22,514	)	$	11,946

Liquidity and Capital Resources

On October 3, 2022, we entered into the Merger Agreement with Naver, Proton Parent and Merger Sub, providing for the acquisition of Poshmark by Naver. We have agreed to various covenants and agreements, including, among others, agreements to conduct our business in the ordinary course of business between the execution of the Merger Agreement and the closing of the Merger. Outside of certain limited exceptions, we may not take certain actions without Naver’s consent, including (i) acquiring businesses and disposing of significant assets, (ii) incurring expenditures above specified thresholds, (iii) incurring debt, (iv) issuing additional securities, or (v) repurchasing shares of Company Common Stock. We do not believe these restrictions will prevent us from meeting our ongoing costs of operations, working capital needs or capital expenditure requirements.

As of September 30, 2022, our principal sources of liquidity were cash and cash equivalents of $588.8 million. Cash equivalents consisted of institutional money market funds, and cash in transit from third-party credit card providers that we receive within approximately three to five business days from the date of the underlying transaction.

As of September 30, 2022, our cash and cash equivalents held by our foreign subsidiaries were not material.

Since our inception, we have most often generated negative cash flows from operations and as of September 30, 2022, we had an accumulated deficit of $282.3 million, and we have financed our operations primarily through private sales of equity securities, payments received through our platform, and the issuance of convertible debt. Upon the closing of our IPO in January 2021, we received net proceeds of $292.3 million after deducting underwriting discounts and commissions and offering expenses. We believe our existing cash and cash equivalents will be sufficient to meet our working capital and capital expenditures needs over at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through the issuance of debt, equity, and equity-linked arrangements.

Condensed Consolidated Statements of Cash Flows Data

	Nine Months Ended September 30,
	2022			2021
	(in thousands)
Net cash provided by (used in):
Operating activities	$	4,431		$	33,966
Investing activities		(1,311	)		24,420
Financing activities		3,223			295,846
Effect of foreign exchange rate changes on cash and cash equivalents		935			95
Net increase in cash and cash equivalents	$	7,278		$	354,327

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Cash Flows from Operating Activities

For the nine months ended September 30, 2022, net cash provided by operating activities was $4.4 million which consisted of a net loss of $60.4 million, adjusted by non-cash charges of $40.0 million and net cash inflows from the change in net operating assets and liabilities of $24.8 million. The non-cash charges were primarily comprised of stock-based compensation of $34.3 million, and depreciation and amortization of $3.0 million. The net cash inflows from the change in our net operating assets and liabilities was primarily due to a $10.9 million increase in our accounts payable attributable to the timing of payments, a $9.1 million increase in accrued expenses and other liabilities, and a $7.9 million increase in funds payable as a result of our growth, partially offset by a $4.6 million decrease in operating lease liabilities.

For the nine months ended September 30, 2021, net cash provided by operating activities was $34.0 million, which consisted of a net loss of $83.5 million, adjusted by non-cash charges of $95.5 million and net cash inflows from the change in net operating assets and liabilities of $22.0 million. The non-cash charges were primarily comprised of the change in fair value of convertible notes of $51.1 million, stock-based compensation of $38.9 million, change in fair value of redeemable convertible preferred stock warrant liability of $2.8 million, and depreciation and amortization of $2.5 million. The net cash inflows from the change in our net operating assets and liabilities was primarily due to a $19.2 million increase in our funds payable to customers as a result of our growth.

Cash Flows from Investing Activities

For the nine months ended September 30, 2022, net cash used in investing activities of $1.3 million, was attributable to the purchase of property and equipment.

For the nine months ended September 30, 2021, net cash provided by investing activities of $24.4 million, was mainly attributable to the proceeds from the maturities of marketable securities.

Cash Flows from Financing Activities

For the nine months ended September 30, 2022, cash provided by financing activities was $3.2 million, which consisted of proceeds from the exercise of stock options and our employee stock purchase plan.

For the nine months ended September 30, 2021, cash provided by financing activities was $295.8 million, which consisted primarily of net proceeds from our IPO.

Concentration of Credit Risk

We are subject to concentration of credit risk principally from cash and cash equivalents. We reduce credit risk by placing our cash and cash equivalents with major financial institutions with high credit ratings. No customer accounted for 10% or more of our net revenue for the three and nine months ended September 30, 2022 and 2021.

Contractual Obligations and Commitments

As of September 30, 2022, there were no material changes outside the ordinary course of business to the contractual obligations, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

For additional information about our critical accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K as well as Note 2 – Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1, of this Quarterly Report on Form 10-Q.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.

Interest Rate Risk

As of September 30, 2022, we had cash and cash equivalents of $588.8 million, which consisted primarily of cash held in one high-credit quality financial institution within the United States, cash in transit from third-party credit card providers, and institutional money market funds, which each carry a degree of interest rate risk. Changes in interest rates affect the interest income we earn on our cash and cash equivalents, and the fair value of our cash equivalents. A hypothetical 10% change in interest rates would not have a material impact on our financial condition or results of operations due to the short-term nature of our investment portfolio as of September 30, 2022.

Foreign Currency Exchange Risk

Our revenue is denominated in U.S. dollars. Our expenses are primarily denominated in U.S. dollars, except for our non-U.S. operations, which are denominated in the local currency. As our operations in countries outside of the United States grow, our results of operations and cash flows may be subject to fluctuations due to changes in foreign currency exchange rates. To date, these fluctuations have not been material. As exchange rates vary, our operating loss may differ from expectations. To date, we have not entered into any foreign currency hedging contracts, although we may do so in the future. A hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have a material effect on our operating results as of September 30, 2022.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) as of September 30, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2022, our disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting, as described in Item 9A. “Controls and Procedures–Management’s Annual Report on Internal Control Over Financial Reporting” of our Annual Report on Form 10-K for the year ended December 31, 2021.

Remediation Plan to Address Material Weakness

Our management is taking steps to enhance our internal control over financial reporting and remediate the material weakness identified during the year ended December 31, 2021 related to the completeness and accuracy of third-party data used to calculate and record chargebacks. During the first quarter of 2022, we made progress in our remediation of the material weakness noted above by designing new procedures to obtain completeness and accuracy of third-party data used to calculate and record chargebacks. To assess our remediation progress, during the second quarter of 2022, we initiated testing of the implementation of our redesigned process. During the third quarter of 2022, we continued our remediation progress including testing of the implementation of our redesigned controls. These controls will not be deemed effective until performed effectively for the year ended December 31, 2022.

We believe the measures described above will remediate the material weakness we have identified, however we cannot provide any assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. We are committed to continuing to improve our internal control processes and will continue to review, optimize, and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by the collusion of two or more people or by management override of controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

39

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

See “Note 6 — Commitments and Contingencies — Litigation and Loss Contingencies” of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors.

Risk affecting our business are discussed in the sections titled "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 30, 2022 (our 2021 10-K), our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed with the SEC on May 13, 2022 (our Q1 2022 10-Q) and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 15, 2022 (our Q2 2022 10-Q). Except as presented below, there have been no material changes to our risk factors as disclosed in our 2021 10-K, our Q1 2022 10-Q and our Q2 2022 10-Q.

Risks Related to Our Potential Merger with Naver

Our Merger with Naver, the pendency of the Merger or our failure to complete the Merger could have a material adverse effect on our business, results of operations, financial condition, and stock price.

On October 3, 2022, we entered into the Merger Agreement with Naver, Proton Parent and Merger Sub, providing for the acquisition of Poshmark by Naver. Completion of the Merger is subject to the satisfaction of various conditions, including (1) the adoption of the Merger Agreement by stockholders holding a majority of the voting power of the outstanding shares of Company Common Stock entitled to vote, voting together as a single class, (2) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (3) the absence of any order, injunction or law prohibiting the consummation of the Merger, (4) the accuracy of the other party’s representations and warranties, subject to certain materiality standards set forth in the Merger Agreement, (5) compliance in all material respects with the other party’s obligations under the Merger Agreement, and (6) no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred since the date of the Merger Agreement that is continuing. There is no assurance that all of the various conditions will be satisfied, or that the Merger will be completed on the proposed terms, within the expected timeframe, or at all. Furthermore, there are additional inherent risks in the Merger, including the risks detailed below.

During the period prior to the closing of the Merger, our business is exposed to certain inherent risks due to the effect of the announcement or pendency of the Merger on our business relationships, financial condition, operating results and business, including:

•potential uncertainty in the marketplace, which could lead current and prospective sellers, brands or customers to sell products to or purchase products from other retailers or reduce, delay or cancel selling to or purchasing from us;

•the possibility of disruption to our business and operations, including diversion of management attention and resources;

•the inability to attract and retain key personnel, and the possibility that our current employees could be distracted, and their productivity decline as a result, due to uncertainty regarding the Merger;

•the inability to pursue alternative business opportunities or make changes to our business pending the completion of the Merger, and other restrictions on our ability to conduct our business;

•our inability to solicit other acquisition proposals during the pendency of the Merger;

•the amount of the costs, fees, expenses and charges related to the Merger Agreement and the Merger; and

•other developments beyond our control, including, but not limited to, changes in domestic or global economic conditions that may affect the timing or success of the Merger.

The Merger may be delayed, and may ultimately not be completed, due to a number of factors, including:

•the failure to obtain the approval of the Merger Agreement by our stockholders;

•the failure to obtain approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

•potential future stockholder litigation and other legal and regulatory proceedings, which could delay or prevent the Merger; and

•the failure to satisfy the other conditions to the completion of the Merger, including the possibility that a Company Material Adverse Effect on our business would permit Naver not to close the Merger.

If the Merger does not close, our business and stockholders would be exposed to additional risks, including:

•to the extent that the current market price of our Class A common stock reflects an assumption that the Merger will be completed, the price of our Class A common stock could decrease if the Merger is not completed;

•investor confidence could decline, stockholder litigation could be brought against us, relationships with existing and prospective sellers, brands, customers, service providers, investors and other business partners may be adversely impacted,

40

we may be unable to retain key personnel, and profitability may be adversely impacted due to costs incurred in connection with the pending Merger; and

•the requirement that we pay a termination fee of $52,913,000 if the Merger Agreement is terminated in certain circumstances, including (i) by the Company to enter into a superior proposal or (ii) by Naver because (A) the Board changes or withdraws its recommendation in favor of the Merger or (B) the Company or the Board, as applicable, has willfully and materially breached the non-solicitation covenant in the Merger Agreement.

Even if successfully completed, there are certain risks to our stockholders from the Merger, including:

•the amount of cash to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our Class A common stock;

•the fact that receipt of the all-cash per share merger consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and

•the fact that, if the Merger is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

While the Merger Agreement is in effect, we are subject to restrictions on our business activities.

While the Merger Agreement is in effect, we are generally required to conduct our business in the ordinary course consistent with past practice, and are restricted from taking certain actions without Naver’s prior consent, which is not to be unreasonably withheld, conditioned or delayed. These limitations include, among other things, certain restrictions on our ability to amend our organizational documents, acquire other businesses and assets, dispose of our assets, make investments, repurchase, reclassify or issue securities, modify terms of equity or voting interests, make loans, pay dividends, incur indebtedness, make capital expenditures, enter into or materially modify certain contracts, change accounting policies or procedures, settle litigation, change tax classifications and elections, enter into or materially modify agreements with labor organizations, waive certain employment related restrictions, or take certain actions relating to intellectual property. These restrictions could prevent us from pursuing strategic business opportunities and taking actions with respect to our business that we may consider advantageous and may, as a result, materially and adversely affect our business, results of operations and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Recent Sales of Unregistered Equity Securities

None.

(b) Use of Proceeds from our IPO

The offer and sale of the shares in the IPO was registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-251427), which was declared effective by the SEC on January 13, 2021. Pursuant to such registration statement, we issued and sold an aggregate of 7,590,000 shares of our common stock at a price of $42.00 per share for aggregate cash proceeds of $292.3 million, net of underwriting discounts and commissions and offering costs, which includes the full exercise by the underwriters of their option to purchase additional shares of common stock. None of the underwriting discounts and commissions or offering expenses were incurred or paid, directly or indirectly, to any of our directors or officers or their associates or to persons owning 10% or more of our common stock or to any of our affiliates.

There has been no material change in the expected use of the net proceeds from our IPO, as described in our final prospectus filed with the SEC on January 14, 2021 pursuant to Rule 424(b) under the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

41

Item 6. Exhibits.

Exhibit Number	Exhibit Description	Form	File No.	Incorporated by Reference Exhibit	Filing Date
2.1†	Agreement and Plan of Merger, by and among Poshmark, Inc., NAVER Corporation, Proton Parent, Inc., and Proton Merger Sub, Inc., dated October 3, 2022.	8-K	001-39848	2.1	10/4/2022
3.1	Form of Amended and Restated Certificate of Incorporation of Poshmark, Inc., as currently in effect.	S-1	333-251427	3.2	1/6/2022
3.2	Form of Amended and Restated Bylaws of Poshmark, Inc., as currently in effect.	S-1	333-251427	3.4	1/6/2022
10.1†	Form of Voting and Support Agreement, by and among Poshmark, Inc., NAVER Corporation and certain stockholders of Poshmark, Inc.	8-K	001-39848	10.1	10/4/2022
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Poshmark, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

† All schedules to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

42

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on

its behalf by the undersigned thereunto duly authorized.

	Poshmark, Inc.
Date: November 10, 2022	By:	/s/ Manish Chandra
		Manish Chandra
		Co-Founder, President, Chief Executive Officer, and Chairman of the Board
Date: November 10, 2022	By:	/s/ Rodrigo Brumana
		Rodrigo Brumana
		Chief Financial Officer

43

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Manish Chandra, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Poshmark, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 10, 2022	By:	/s/ Manish Chandra
		Manish Chandra
		Co-Founder, President, Chief Executive Officer, and Chairman of the Board

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rodrigo Brumana, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Poshmark, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 10, 2022	By:	/s/ Rodrigo Brumana
		Rodrigo Brumana
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Manish Chandra, the Chief Executive Officer of Poshmark, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Poshmark, Inc. for the quarterly period ended September 30, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Poshmark, Inc.

Date: November 10, 2022	By:	/s/ Manish Chandra
		Manish Chandra
		Co-Founder, President, Chief Executive Officer, and Chairman of the Board

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Rodrigo Brumana, the Chief Financial Officer of Poshmark, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Poshmark, Inc. for the quarterly period ended September 30, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Poshmark, Inc.

Date: November 10, 2022	By:	/s/ Rodrigo Brumana
		Rodrigo Brumana
		Chief Financial Officer

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 01, 2022
Document Information [Line Items]
Entity Registrant Name	Poshmark, Inc.
Entity central index key	0001825480
Document Type	10-Q
Document Period End Date	Sep. 30, 2022
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Trading Symbol	POSH
Security12b Title	Class A Common Stock of $0.0001 par value per share
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
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Entity Filer Category	Non-accelerated Filer
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Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Document Quarterly Report	true
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Entity File Number	001-39848
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-4827617
Entity Address, Address Line One	203 Redwood Shores Parkway
Entity Address, Address Line Two	8th Floor
Entity Address, City or Town	Redwood City
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94065
City Area Code	650
Local Phone Number	262-4771
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		54,626,374
Common Class B
Document Information [Line Items]
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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 588,816	$ 581,538
Prepaid expenses and other current assets	8,267	9,737
Total current assets	597,083	591,275
Property and equipment, net	6,249	7,376
Operating lease right-of-use assets	6,739	0
Intangible assets, net	885	1,360
Goodwill	7,012	7,012
Other assets	1,629	1,650
Total assets	619,597	608,673
Current liabilities
Accounts payable	12,516	1,595
Funds payable to customers	153,212	145,290
Operating lease liabilities, current	5,918	0
Accrued expenses and other current liabilities	47,585	40,922
Total current liabilities	219,231	187,807
Operating lease liabilities, non-current	4,518	0
Long-term portion of deferred rent and other liabilities	0	3,247
Total liabilities	223,749	191,054
Commitments and Contingencies (Note 6)
Stockholders’ (deficit) equity
Preferred Stock, $0.0001 par value, 100,000,000 shares authorized as of September 30, 2022 and December 31, 2021, respectively; zero shares issued and outstanding as of September 30, 2022 and December 31, 2021	0	0
Common stock	8	8
Additional paid-in capital	679,710	641,974
Treasury stock, at cost (50,595 shares at September 30, 2022 and December 31, 2021)	(2,651)	(2,651)
Accumulated deficit	(282,276)	(221,835)
Accumulated other comprehensive income	1,057	123
Total stockholders' equity	395,848	417,619
Total liabilities and stockholders' equity	$ 619,597	$ 608,673

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Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	50,595	50,595
Common Class A
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	5,000,000,000	5,000,000,000
Common stock, shares issued	54,472,825	52,503,819
Common stock, shares, outstanding	54,472,825	52,503,819
Common Class B
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	700,000,000	700,000,000
Common stock, shares issued	24,623,085	24,777,228
Common stock, shares, outstanding	24,623,085	24,777,228

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Net revenue	$ 88,428	$ 79,463	$ 268,430	$ 241,806
Costs and expenses:
Cost of net revenue, exclusive of depreciation and amortization	14,915	12,082	44,915	37,798
Operations and support	15,513	13,199	46,770	41,062
Research and development	18,189	12,325	52,457	43,574
Marketing	42,613	36,198	129,606	104,021
General and administrative	20,473	11,729	53,281	42,317
Depreciation and amortization	1,000	827	3,033	2,463
Total costs and expenses	112,703	86,360	330,062	271,235
Loss from operations	(24,275)	(6,897)	(61,632)	(29,429)
Interest income	1,586	77	2,145	201
Other expense, net
Change in fair value of redeemable convertible preferred stock warrant liability	0	0	0	(2,816)
Change in fair value of the convertible notes	0	0	0	(49,481)
Loss on extinguishment of the convertible notes	0	0	0	1,620
Change in fair value of contingent consideration	(37)	0	396	0
Foreign exchange loss, net	(694)	(36)	(969)	(220)
Other expenses, net	(731)	(36)	(573)	(54,137)
Loss before provision for income taxes	(23,420)	(6,856)	(60,060)	(83,365)
Provision for income taxes	120	0	381	180
Net loss	$ (23,540)	$ (6,856)	$ (60,441)	$ (83,545)
Net loss per share attributable to common stockholders, basic	$ (0.30)	$ (0.09)	$ (0.77)	$ (1.17)
Net loss per share attributable to common stockholders, diluted	$ (0.30)	$ (0.09)	$ (0.77)	$ (1.17)
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic	78,682	76,479	78,160	71,639
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted	78,682	76,479	78,160	71,639

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (23,540)	$ (6,856)	$ (60,441)	$ (83,545)
Other comprehensive income:
Reclassification upon extinguishment of the fair value of the convertible notes related to instrument-specific credit risk to statement of operations	0	0	0	1,620
Change in foreign currency translation adjustment	550	70	934	95
Change in unrealized gains on marketable securities, net of tax	0	(1)	0	(1)
Total other comprehensive income	550	69	934	1,714
Comprehensive loss	$ (22,990)	$ (6,787)	$ (59,507)	$ (81,831)

XML

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity (Unaudited) - USD ($)	Total	Conversion Of Convertible Notes	Redeemable Convertible Preferred Stock	Common Stock	Common Stock Conversion Of Convertible Notes	Additional Paid-in Capital	Additional Paid-in Capital Conversion Of Convertible Notes	Treasury Stock	Treasury Stock Conversion Of Convertible Notes	Accumulated Deficit	Accumulated Deficit Conversion Of Convertible Notes	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Conversion Of Convertible Notes
Balance at Dec. 31, 2020	$ (96,779,000)			$ 1,000		$ 28,300,000		$ 0		$ (123,506,000)		$ (1,574,000)
Balance (in shares) at Dec. 31, 2020				13,093,065
Balance at Dec. 31, 2020			$ 156,175,000
Balance (in shares) at Dec. 31, 2020			52,286,631
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	156,175,000	$ (104,902,000)	$ 0	$ (6,000)	$ 0	156,169,000	$ (104,902,000)	0	$ 0	0	$ 0	0	$ 0
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares)			(52,286,631)
Conversion of redeemable convertible preferred stock to common stock upon initial public offering			$ (156,175,000)
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares)			0	(52,286,631)	(1,400,560)
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	292,235,000		$ 0	$ 1,000		292,234,000		0		0		0
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares)			0	7,590,000
Exercise of common stock warrants	100,000		$ 0	$ 0		100,000		0		0		0
Exercise of common stock warrants (in shares)			0	85,583
Reclassification of warrant liability to additional paid-in capital upon initial public offering	6,310,000		$ 0	$ 0		6,310,000		0		0		0
Issuance of common stock upon vesting of restricted stock units (in shares)				760,185
Issuance of common stock upon vesting of restricted stock units	0		0	$ 0		0		0		0		0
Tax withholding related to vesting of restricted stock units	(2,651,000)		0	$ 0				2,651,000		0		0
Tax withholding related to vesting of restricted stock units (in shares)				50,595
Issuance of common stock upon exercise of stock options	4,705,000		0			4,705,000		0		0		0
Issuance of common stock upon exercise of stock options, shares				1,733,207
Stock-based compensation	39,251,000		0	$ 0		39,251,000		0		0		0
Other comprehensive income	1,714,000		0	0		0		0		0		1,714,000
Net loss	(83,545,000)		0	0		0		0		(83,545,000)		0
Balance at Sep. 30, 2021	422,417,000			$ 8,000		631,971,000		(2,651,000)		(207,051,000)		140,000
Balance (in shares) at Sep. 30, 2021				76,898,636
Balance at Sep. 30, 2021			$ 0
Balance (in shares) at Sep. 30, 2021			0
Balance at Jun. 30, 2021	419,906,000			$ 8,000		622,673,000		(2,651,000)		(200,195,000)		71,000
Balance (in shares) at Jun. 30, 2021				75,917,867
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares)				193,724
Issuance of common stock upon vesting of restricted stock units	0					0		0		0		0
Tax withholding related to vesting of restricted stock units	0			$ 0		0		0		0		0
Tax withholding related to vesting of restricted stock units (in shares)				0
Issuance of common stock upon exercise of stock options	2,580,000			$ 0		2,580,000		0		0		0
Issuance of common stock upon exercise of stock options, shares				787,045
Stock-based compensation	6,718,000			$ 0		6,718,000		0		0		0
Other comprehensive income	69,000			0		0		0		0		69,000
Net loss	(6,856,000)			0		0		0		(6,856,000)		0
Balance at Sep. 30, 2021	422,417,000			$ 8,000		631,971,000		(2,651,000)		(207,051,000)		140,000
Balance (in shares) at Sep. 30, 2021				76,898,636
Balance at Sep. 30, 2021			$ 0
Balance (in shares) at Sep. 30, 2021			0
Balance at Dec. 31, 2021	417,619,000			$ 8,000		641,974,000		(2,651,000)		(221,835,000)		123,000
Balance (in shares) at Dec. 31, 2021				77,281,047
Balance at Dec. 31, 2021			$ 0
Balance (in shares) at Dec. 31, 2021			0
Issuance of common stock upon vesting of restricted stock units (in shares)				880,940
Issuance of common stock upon vesting of restricted stock units	0		$ 0	$ 0		0		0		0		0
Issuance of common stock upon exercise of stock options and employee stock purchase plan	3,223,000		$ 0	$ 0		3,223,000		0		0		0
Issuance of common stock upon exercise of stock options and employee stock purchase plan (in shares)			0	933,923
Stock-based compensation	34,513,000		$ 0	$ 0		34,513,000		0		0		0
Other comprehensive income	934,000		0	0		0		0		0		934,000
Net loss	(60,441,000)		0	0		0		0		(60,441,000)		0
Balance at Sep. 30, 2022	395,848,000			$ 8,000		679,710,000		(2,651,000)		(282,276,000)		1,057,000
Balance (in shares) at Sep. 30, 2022				79,095,910
Balance at Sep. 30, 2022			$ 0
Balance (in shares) at Sep. 30, 2022			0
Balance at Jun. 30, 2022	404,723,000			$ 8,000		665,595,000		(2,651,000)		(258,736,000)		507,000
Balance (in shares) at Jun. 30, 2022				78,431,389
Issuance of common stock upon vesting of restricted stock units (in shares)				479,309
Issuance of common stock upon vesting of restricted stock units	0			$ 0		0		0		0		0
Issuance of common stock upon exercise of stock options and employee stock purchase plan	517,000			$ 0		517,000		0		0		0
Issuance of common stock upon exercise of stock options and employee stock purchase plan (in shares)				185,212
Stock-based compensation	13,598,000			$ 0		13,598,000		0		0		0
Other comprehensive income	550,000			0		0		0		0		550,000
Net loss	(23,540,000)			0		0		0		(23,540,000)		0
Balance at Sep. 30, 2022	$ 395,848,000			$ 8,000		$ 679,710,000		$ (2,651,000)		$ (282,276,000)		$ 1,057,000
Balance (in shares) at Sep. 30, 2022				79,095,910
Balance at Sep. 30, 2022			$ 0
Balance (in shares) at Sep. 30, 2022			0

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss	$ (60,441)	$ (83,545)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	3,033	2,463
Stock-based compensation	34,285	38,912
Reduction in the carrying amount of right-of-use assets	2,756	0
Change in fair value of redeemable convertible preferred stock warrant liability	0	2,816
Change in fair value of the convertible notes	0	49,481
Loss on extinguishment of the convertible notes	0	1,620
Change in fair value of contingent consideration	(396)	0
Accretion of discounts and amortization of premiums on marketable securities, net	0	237
Other	362	4
Changes in operating assets and liabilities:
Prepaid expenses and other assets	1,491	2,302
Accounts payable	10,921	(1,697)
Funds payable to customers	7,922	19,231
Accrued expenses and other liabilities	9,119	2,142
Operating lease liabilities	(4,621)	0
Net cash provided by operating activities	4,431	33,966
Cash flows from investing activities
Purchases of property and equipment	(1,311)	(1,580)
Maturities of marketable securities	0	26,000
Net cash (used in) provided by investing activities	(1,311)	24,420
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions and offering costs	0	293,692
Proceeds from issuance of redeemable convertible preferred stock warrants	0	100
Tax withholding related to vesting of restricted stock units	0	(2,651)
Proceeds from exercise of stock options and employee stock purchase plan	3,223	4,705
Net cash provided by financing activities	3,223	295,846
Effect of foreign exchange rate changes on cash and cash equivalents	935	95
Net increase in cash and cash equivalents	7,278	354,327
Cash and cash equivalents
Beginning of period	581,538	238,902
End of period	588,816	593,229
Supplemental cash flow data
Cash paid for income taxes	337	320
Stock-based compensation capitalized to internal use software	228	339
Deferred offering costs included in accounts payable and accrued expenses and other current liabilities	0	182
Conversion of convertible notes upon initial public offering	0	104,902
Conversion of redeemable convertible preferred stock upon initial public offering	0	156,175
Reclassification of preferred stock warrant liability upon initial public offering	$ 0	$ 6,310

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Organization

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. Organization

Description of Business

Poshmark, Inc. (the Company) was incorporated in the state of Delaware with headquarters in Redwood City, California, and has wholly-owned subsidiaries based in Chennai, India, Vancouver, Canada, New South Wales, Australia, and London, United Kingdom. The Company is a social marketplace that combines the human connection of a physical shopping experience with the scale, reach, ease, and selection benefits of eCommerce. In doing so, the Company brings the power of community to buying and selling online. Pairing technology with the inherent human desire to socialize, the Company creates passion and personal connections among users.

The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern. Since inception, the Company has incurred cumulative net losses. The Company generated net loss of $23.5 million for the three months ended September 30, 2022. The Company had an accumulated deficit of $282.3 million as of September 30, 2022. The Company has historically financed its operations primarily through the issuance and sale of redeemable convertible preferred stock and through the issuance of convertible debt. While the Company believes that its current cash and cash equivalents are adequate to meet its needs for a one-year period from the date these condensed consolidated financial statements are issued, the Company may need to borrow funds or raise additional equity to achieve its longer-term business objectives.

Initial Public Offering

On January 19, 2021, the Company completed its initial public offering (IPO). In connection with the IPO, it authorized two new classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock and has no expiration date. The Class B common stock automatically converts to Class A common stock upon transfers or any sale. In its IPO, the Company issued and sold 6,600,000 shares of its Class A common stock at the public offering price of $42.00 per share, plus an additional 990,000 shares of common stock at the public offering price of $42.00 per share pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $292.3 million after deducting underwriting discounts and commissions and offering expenses. Upon the closing of the IPO:

•all 52,286,631 shares of the Company’s outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis;

•convertible notes with an aggregate principal amount of $50.0 million automatically converted into 1,400,560 shares of our Class A common stock at a conversion price equal to 85% of the IPO price of $42.00 per share; and

•redeemable convertible preferred stock warrants amounting to 85,583 automatically converted into Class B common stock warrants.

Upon completion of the IPO, $4.2 million of deferred offering costs were reclassified to additional paid-in capital and accounted for as a reduction of the IPO proceeds in the condensed consolidated balance sheets.

Merger Agreement

On October 3, 2022, the Company entered into an Agreement and Plan of Merger (the Merger Agreement), by and among the Company, NAVER Corporation, a public corporation organized under the laws of the Republic of Korea (Parent or Naver), Proton Parent, Inc., a Delaware corporation and wholly owned subsidiary of Parent (Proton Parent), and Proton Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Proton Parent (Merger Sub), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the merger (the Merger) as an indirect subsidiary of Naver. As a result of the Merger, each share of the Company’s Class A common stock and Class B common stock (together, the Company Common Stock) outstanding immediately prior to the effective time of the Merger (subject to certain exceptions set forth in the Merger Agreement) will, at the effective time, automatically be canceled and converted into the right to receive $17.90 in cash, without interest and subject to applicable withholding taxes. If the Merger is consummated, the Company’s Class A common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) as well as the instructions to Form 10-Q and the rules and regulations of the U.S. SEC for interim financial information. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements as of that date but does not include all disclosures, including notes required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results of operations expected for the entire year ending December 31, 2022 or for any other future annual or interim periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K (2021 Annual Report) for the year ended December 31, 2021, filed with the SEC on March 30, 2022.

For the foreign subsidiaries where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. dollars are recorded as a separate component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses have not been material for all periods presented.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates include the fair value of financial instruments, the incremental borrowing rate (IBR) applied in lease accounting, capitalization and estimated useful life of internal-use software, allowance for expected chargeback losses, estimates related to credits, incentives and refunds issued to customers, valuation of the convertible notes preceding its IPO, valuation of the redeemable convertible preferred stock warrant liability preceding its IPO, stock-based compensation, valuation of the Company’s common stock preceding its IPO, and valuation of deferred income tax assets and the uncertain tax positions. To the extent there are material differences between these estimates, judgments or assumptions and actual results, the condensed consolidated financial statements will be affected.

Revenue Recognition

The Company recognizes revenue when it satisfies its performance obligations. The Company considers both sellers and buyers to be customers. The Company generates revenue from sellers for fees earned when sellers sell items they have listed on the Company’s platform to buyers. The Company generates revenue from buyers for fees earned when they purchase shipping labels used for delivery of the items purchased. The Company periodically reassesses its revenue recognition policies as new offerings become material, and business models evolve. The Company recognizes revenue net of estimated returns and cancellations based on its historical experience. Transactions may be cancelled by a buyer or seller in certain circumstances.

The Company enters into the Terms of Service (TOS) with buyers and sellers to use the Company’s technology platform. The TOS governs these parties’ use of the platform, including payment terms for the buyer and the seller and services to be provided by the Company. Under the TOS, upon the buyer’s purchase from the seller, the Company, buyer, and seller are committed to perform and enforceable rights and obligations are established.

Sellers

Sellers are able to list their items for sale on the Company’s platform at no charge. The Company charges a fee upon the sale of items listed on its platform. The fee is a fixed dollar amount for orders under a certain value, and a fixed percentage of the final sales price of the item for orders greater than that. The service that the Company provides to sellers includes the facilitation of the sale of their items as well as certain ancillary activities such as payment processing and authentication (for certain luxury items). These activities comprise a single performance obligation to sellers, which is to facilitate the sale of the listed items between sellers and buyers on the Company’s platform (sale facilitation).

The Company evaluates the presentation of revenue from sellers on a gross or net basis based on whether it acts as a principal or an agent in the sale of listed items between sellers and buyers. The Company does not control the listed items at any time prior to the transfer of such items to buyers. The Company acts as an agent in facilitating the sale of items from sellers to buyers by allowing them

to connect and interact on the Company’s platform. The Company is not primarily responsible for fulfillment of purchased items, does not have inventory risk, and does not set the price for the listed item. As such, the Company reports revenue from sellers on a net basis to reflect the fees received from sellers.

Revenue is recognized at the point in time the Company satisfies its performance obligation to facilitate the sale of a listed item. This occurs when both the seller and the buyer agree to a sale and the payment is processed on the Company’s platform. For luxury items authenticated by the Company, sale facilitation revenue is recognized when the Company authenticates and arranges for shipment of the items to the buyer, as this is the point in time a sale is finalized and the Company has satisfied its performance obligation.

Buyers

When a sale is finalized, the buyer purchases a shipping label from United States Postal Service (USPS), or the relevant shipping provider for the Canada, Australia and India marketplaces, through the Poshmark platform. The Company emails the shipping label to the seller and the seller ships the item to the buyer through the shipping provider. The Company does not purchase the shipping label on behalf of the buyer until after the buyer has purchased an item and has remitted payment. As a result, the Company has one performance obligation to buyers, which is to facilitate the sale of shipping labels to buyers for delivery of items purchased on the Company’s platform (shipping facilitation).

The Company evaluates the presentation of revenue from buyers on a gross or net basis based on whether it acts as a principal or an agent in shipment of listed items between sellers and buyers. The Company does not control the shipping service, which is provided by the shipping provider. The Company is not primarily responsible for shipping and it does not assume any of the risks for the items shipped such as risk of damage or loss during shipping. The Company acts as an agent of the buyer in facilitating the shipping. As such, the Company reports revenue on a net basis which is the difference between the shipping fee paid by the buyer and the cost of shipping labels paid to the shipping provider.

Revenue from shipping facilitation is recognized upon transfer of the shipping label to the seller on behalf of the buyer.

The Company estimates chargebacks based on historical collectability rates. The Company records a reserve for chargebacks in accrued expenses and other accrued liabilities with an offset to general and administrative expenses.

Sales tax and other amounts collected on behalf of third parties are excluded from the transaction price.

Incentives

Under the referral program, an existing user (the referrer) earns an incentive (Posh Credit) when a new user (the referee) first buys an item on the Company’s platform. Posh Credits are not redeemable for cash and can only be applied for purchases on the Company’s platform. The Company records the incentive to the referrer, which is in exchange for a distinct referral service, as a liability at the time the incentive is earned by the referrer with a corresponding charge recorded to marketing expense in the condensed consolidated statements of operations. Credits and incentives issued to existing users for referring new users are contingent upon a new user completing an initial purchase on the Company’s platform and represent an incremental cost of obtaining a contract with a customer. The Company expenses such new user referral incentives as marketing expense when the referral incentives are earned because the amortization period would be one year or less.

The Company has several buyer incentive programs, which are offered to encourage buyer activity on the Company’s platform. These promotions reduce the fees for shipping facilitation charged by the Company. Accordingly, the Company records these incentives as a reduction to revenue from the buyer when the incentive is used by the buyer. Amounts in excess of cumulative shipping facilitation revenue earned are presented as marketing expense in the condensed consolidated statements of operations.

The Company participates in certain joint incentive programs with sellers that are recorded as a reduction to the fees received from the seller.

The Company may elect to issue incentives to buyers for customer satisfaction purposes or for refunds. These incentives (which are in the form of Posh Credits) can be applied towards future orders and, thereby, result in a reduced fee earned by the Company from the buyer, or redeemable credits that can also be redeemed for cash. In cases where the seller performed as required by the Company’s TOS, the Company reduces shipping facilitation revenue earned on the transaction and any cumulative revenue earned from the same buyer for Posh Credits and redeemable credits granted. If the amount of the incentive exceeds cumulative revenues from the buyer, then the excess is presented as operations and support expense in the consolidated statements of operations. If refunds are provided in a case where the seller did not perform and the amount cannot be recovered from the seller, the refund is presented as a reduction of revenue. Referral incentives, joint incentives, refunds and buyer incentives are recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reduction to net revenue	$	2,478	$	2,491	$	8,478	$	7,152
Operations and support		1,706		1,687		5,562		5,171
Marketing		2,708		2,274		7,927		6,140
	$	6,892	$	6,452	$	21,967	$	18,463

Cost of Net Revenue

Cost of net revenue consists of costs associated with credit card processing, order transaction fees and hosting expenses associated with operating the Company’s platform. Cost of net revenue does not include depreciation and amortization.

Stock-Based Compensation

The Company measures and recognizes stock-based compensation expense for share-based awards issued to employees and consultants, consisting of stock options, restricted stock units (RSUs), and purchases under the 2021 Employee Stock Purchase Plan (ESPP), on the condensed consolidated statements of operations.

RSUs granted prior to the occurrence of a Qualified IPO vest upon the satisfaction of both time-based service and performance-based conditions. The time-based vesting condition for the majority of these awards is satisfied over four years. The performance-based vesting condition is satisfied upon the occurrence of a qualifying event, which is generally defined as a change in control transaction or the effective date of a Qualified IPO. Through December 31, 2020, no stock-based compensation expense had been recognized for RSUs with a liquidity event performance condition, as such qualifying event was not probable. Upon the completion of Company's IPO, the liquidity event performance condition was met. Accordingly, upon the effectiveness of the IPO, the Company recognized cumulative stock-based compensation expense determined using the grant-date fair values and the accelerated attribution method. The remaining stock-based compensation related to these awards will be recognized over the remaining time-based service over the remaining requisite service period using the accelerated attribution method. RSUs granted after the date of the Qualified IPO only include a time-based service condition. Accordingly, these awards will be measured using the grant date fair values and will be amortized on a straight-line basis over the requisite service period. Forfeitures for all stock-based awards are recognized as they occur.

The Company estimates the fair value of stock options granted to employees and directors and fair value of ESPP purchase rights issued under ESPP using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include:

•per share fair value of the underlying common stock;

•exercise price;

•expected term;

•risk-free interest rate;

•expected annual dividend yield; and

•expected stock price volatility over the expected term.

For all stock options granted, the expected term is calculated using the simplified method. The Company does not have sufficient historical transactions in its own shares on which to base expected volatility and, therefore, uses the historical volatility of the stock price of similar publicly traded peer companies to estimate volatility of equity awards granted. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award.

Prior to the completion of the IPO, the fair value of the shares of common stock underlying the stock options has been determined by the board of directors as there was no public market for the common stock. The board of directors determined the fair value of the Company’s common stock by considering a number of objective and subjective factors including: contemporaneous third-party valuations of the Company’s common stock, the valuation of comparable companies, sales of redeemable convertible preferred stock to unrelated third-parties, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. After the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the Nasdaq Global Select Market.

Leases

Prior to the adoption of ASC 842

The Company leases office space under non-cancelable operating lease agreements. Certain of these arrangements have free rent, escalating rent payment provisions, and landlord funded leasehold incentives. Rent expense is recorded on a straight-line basis over the lease term. If a lease provides for fixed escalations of the minimum rental payments, the difference between the straight-line rent charged to expense and the amount payable under the lease is recorded as deferred rent in accrued expenses and other current liabilities, and other liabilities. Landlord funded leasehold incentives are recorded as deferred rent in accrued expenses and other current liabilities, and long-term portion of deferred rent and other liabilities and are recognized as an offset to rent expense using the straight-line method over the lease term.

Subsequent to the adoption of ASC 842

The Company determines if an arrangement is a lease at inception. Lease agreements generally contain lease and non-lease components. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of its lease assets and liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments for common area maintenance and utilities. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. As the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. Lease assets also include any prepaid lease payments and lease incentives. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

Operating lease assets and liabilities are recognized on the condensed consolidated balance sheet as operating lease right-of-use assets (ROU), operating lease liabilities, current and operating lease liabilities, noncurrent. Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term.

Concentrations of Risk

The Company currently uses a few carriers to handle all shipments, gateways to process payments and third-party vendors to host the Company’s information technology environment. A significant disruption in the operations of one of more of these vendors could have an adverse effect on the Company’s business, financial condition, and results of operations.

The majority of the Company’s cash and cash equivalents are held by one high-credit quality financial institution within the United States with balances maintained in excess of the FDIC insurance limits.

No customer accounted for 10% or more of the Company’s net revenue for the three and nine months ended September 30, 2022 and 2021.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and since that date, has issued several ASUs to further clarify certain aspects of ASU 2016-02 and provide entities with practical expedients that may be elected upon adoption. This standard requires lessees to recognize all leases, including operating leases, on the balance sheet as a right-of-use (ROU) asset and lease liability, unless the lease is a short-term lease. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements – Leases (Topic 842). This update provides an alternative transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented. In June 2020, the FASB issued ASU 2020-05, deferring the effective date for one year for all other entities. The Company adopted this standard using the alternative transition method on January 1, 2022 and recorded $9.2 million right-of-use assets and a $14.5 million lease liability on its condensed consolidated balance sheet. As of January 1, 2022, $2.6 million of deferred rent and $2.7 million related to tenant improvement was derecognized upon adoption. As part of this adoption, the Company elected the package of transitional practical expedients to not reassess (1) whether any contracts that existed prior to adoption have or contain leases, (2) the classification of existing leases or (3) initial direct costs for existing leases. The Company also elected to continue to recognize lease payments related to short-term leases as an expense on a straight-line basis over the lease term.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For available for sale debt securities, credit losses will be presented as an allowance rather than as a write-down. In November 2019, the FASB issued ASU 2019-10, amending the effective dates. The Company adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The Company early adopted this standard on January 1, 2022 on a prospective basis. The adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

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Revision of Prior Periods' Financial Statement

9 Months Ended

Sep. 30, 2022

Prior Period Adjustment [Abstract]

Revision of Prior Periods' Financial Statement

3. Revision of Prior Periods' Financial Statement

As previously disclosed in the Company’s 2021 Annual Report, during 2021, the Company identified prior period errors in its previously issued financial statements as of December 31, 2020 and for the years ended December 31, 2020 and 2019, as well as the first three quarters of 2021. These errors primarily related to the Company's calculation and recording of credit card chargebacks from one of its payment processors, which resulted in the overstatement of general and administrative expenses. The corresponding impact was an understatement of cash and cash equivalents and an overstatement of accrued expenses and other liabilities.

The Company evaluated the effect of these errors on prior periods under the guidance of Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) Topic 1.M, Materiality, codified in ASC 250, Accounting Changes and Error Corrections, and concluded that the errors were not material to the prior annual or interim periods. However, the Company determined it was appropriate to revise its previously issued financial statements. In connection with such revision, the Company also corrected other immaterial misstatements, primarily related to the recording of income taxes and misclassification of marketing expenses and net revenue.

Accordingly, in connection with the filing of this Quarterly Report on Form 10-Q, the Company has revised the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss, Changes in Stockholders’ (Deficit) Equity, and Cash Flows for the three and nine months ended September 30, 2021, and the related notes to revise for those errors.

The following table presents the effect of the correction of the misstatements and the resulting revision on the Condensed Consolidated Statements of Operations and Comprehensive Loss:

	Three Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
	(in thousands, except per share data)
Net revenue	$	79,650		$	(187	)	$	79,463
Marketing		36,385			(187	)		36,198
General and administrative		12,070			(341	)		11,729
Total costs and expenses		86,888			(528	)		86,360
Loss from operations		(7,238	)		341			(6,897	)
Loss before provision for income taxes		(7,197	)		341			(6,856	)
Net loss		(7,197	)		341			(6,856	)
Comprehensive loss		(7,128	)		341			(6,787	)
	Nine Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
	(in thousands, except per share data)
Net revenue	$	242,363		$	(557	)	$	241,806
Marketing		104,578			(557	)		104,021
General and administrative		43,706			(1,389	)		42,317
Total costs and expenses		273,181			(1,946	)		271,235
Loss from operations		(30,818	)		1,389			(29,429	)
Loss before (benefit) provision for income taxes		(84,754	)		1,389			(83,365	)
(Benefit) provision for income taxes		(30	)		210			180
Net loss		(84,724	)		1,179			(83,545	)
Comprehensive loss		(83,010	)		1,179			(81,831	)
Net loss per share attributable to common stockholders, basic and diluted	$	(1.18	)	$	0.01		$	(1.17	)

The following table presents the effect of the correction of the misstatements on the Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity (in thousands):

	As Previously Reported			Adjustments		As Revised
As of January 1, 2021
Accumulated deficit	$	(126,509	)	$	3,003	$	(123,506	)
Total stockholders' deficit		(99,782	)		3,003		(96,779	)
As of and for the three months ended September 30, 2021
Net loss attributable to common stockholders		(7,197	)		341		(6,856	)
Accumulated deficit		(211,233	)		4,182		(207,051	)
Total stockholders' equity		418,235			4,182		422,417
As of and for the nine months ended September 30, 2021
Net loss attributable to common stockholders		(84,724	)		1,179		(83,545	)
Accumulated deficit		(211,233	)		4,182		(207,051	)
Total stockholders' equity		418,235			4,182		422,417

The following table presents the effect of the correction of the misstatements on the Condensed Consolidated Statements of Cash Flows (in thousands):

	Nine Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
Net loss	$	(84,724	)	$	1,179		$	(83,545	)
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,188			(46	)		2,142
Net cash provided by operating activities		32,833			1,133			33,966
Cash and cash equivalents:
Beginning of year		235,834			3,068			238,902
End of year		589,028			4,201			593,229

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Supplemental Financial Statement Information

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Financial Statement Information

4. Supplemental Financial Statement Information

Cash Equivalents

The following tables summarize the cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value of the cash equivalents as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022
	Cost or Amortized		Unrealized				Estimated Fair
	Cost		Gains		Losses		Value
Cash equivalents(1)
Money market funds	$	311,342	$	—	$	—	$	311,342
Total	$	311,342	$	—	$	—	$	311,342

(1)Included in cash and cash equivalents on the consolidated balance sheet as of September 30, 2022.

	December 31, 2021
	Cost or Amortized		Unrealized				Estimated Fair
	Cost		Gains		Losses		Value
Cash equivalents(1)
Money market funds	$	309,283	$	—	$	—	$	309,283
Total	$	309,283	$	—	$	—	$	309,283

(1)Included in cash and cash equivalents on the consolidated balance sheet as of December 31, 2021.

Property and Equipment, Net

Property and equipment, net consisted of the following as of the dates indicated (in thousands):

	September 30, 2022			December 31, 2021
Computer equipment and software	$	2,332		$	1,937
Developed website and software		6,856			5,876
Furniture and fixtures		1,438			1,433
Leasehold improvements and incentives		7,287			7,287
Total property and equipment, gross		17,913			16,533
Less accumulated depreciation and amortization		(11,664	)		(9,157	)
Property and equipment, net	$	6,249		$	7,376

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of the dates indicated (in thousands):

	September 30, 2022		December 31, 2021
Accrued advertising	$	9,966	$	10,176
Accrued sales tax		9,679		8,090
Accrued compensation and benefits		10,785		8,369
Accrued shipping		3,300		2,125
Accrued professional services		2,770		1,321
Contingent consideration		1,223		1,619
Other accrued and other current liabilities		9,862		9,222
Accrued expenses and other current liabilities	$	47,585	$	40,922

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Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. Fair Value Measurements

The following tables set forth the financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(1)
Money market funds	$	311,342	$	—	$	—	$	311,342
Total	$	311,342	$	—	$	—	$	311,342
Liabilities
Contingent consideration(2)	$	—	$	—	$	1,223	$	1,223
Total	$	—	$	—	$	1,223	$	1,223

(1)Included in cash and cash equivalents on the condensed consolidated balance sheet as of September 30, 2022.

(2)The fair value of contingent consideration was estimated using a Monte Carlo simulation and was based on significant inputs not observable in the market, thus classified as a Level 3 instrument. The inputs include the projected financial results of Suede One, Inc., historical volatility of the Company's and similar publicly traded peer companies' stock price and risk-free interest rate. See Note 7 (Business Combination).

	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(1)
Money market funds	$	309,283	$	—	$	—	$	309,283
Total	$	309,283	$	—	$	—	$	309,283
Liabilities
Contingent consideration(2)	$	—	$	—	$	1,619	$	1,619
Total	$	—	$	—	$	1,619	$	1,619

(1)Included in cash and cash equivalents on the condensed consolidated balance sheet as of December 31, 2021.

(2)The fair value of contingent consideration was estimated using a Monte Carlo simulation and was based on significant inputs not observable in the market, thus classified as a Level 3 instrument. The inputs include the projected financial results of Suede One, Inc., historical volatility of the Company's and similar publicly traded peer companies' stock price and risk-free interest rate. See Note 7 (Business Combination).

The following table represents the change in the contingent consideration (in thousands):

	Level 3
Balance as of December 31, 2021	$	1,619
Change in fair value		(396	)
Balance as of September 30, 2022	$	1,223

There were no transfers of financial assets or liabilities into or out of Level 1, Level 2 or Level 3 for any of the periods presented.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. Commitments and Contingencies

Litigation and Loss Contingencies

The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. From time to time, the Company is subject to legal proceedings incident to the ordinary course of business, such as intellectual property claims, labor and employment claims, and threatened claims, breach of contract claims, tax and other matters. As of September 30, 2022 and December 31, 2021, the Company is not a party to any legal proceeding that it believes is likely to have a material impact on its business, results of operations, or financial condition.

Indemnifications

The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including business partners, investors, contractors and the Company’s officers, directors and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claim because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the condensed consolidated statements of operations in connection with the indemnification provisions have not been material.

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Business Combination

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Business Combination

7. Business Combination

On October 12, 2021, the Company completed the acquisition of Suede One, Inc., a New York City-based sneaker authentication platform that combines machine learning, computer vision, and human review to conduct virtual authentication. Total cash consideration related to the acquisition was $6.6 million. The Company also agreed to pay up to an additional $2.5 million in cash upon certain earnout conditions being met by October 31, 2022. The estimated fair value of these earnout payments was determined based on management’s estimate of fair value using a Monte Carlo simulation model, which uses Level 3 inputs for fair value measurements. The acquisition date fair value of this contingent consideration liability was $1.6 million and is included as a component of the purchase price. Pro forma and revenue and earnings post-acquisition are not presented because the impacts are not material to the Company’s consolidated financial statements.

The acquisition was accounted for under the acquisition method of accounting. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. The Company recognized intangible assets of $1.3 million for developed technology and $0.2 million for customer relationships, which will be amortized over three years and one year, respectively. Goodwill arising from the acquisition is not deductible for tax purposes.

Subsequent to the acquisition, the Company recorded a $0.4 million tax benefit related to the release of the valuation allowance on its net deferred tax assets.

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed of Suede One, Inc. (in thousands):

Acquiree	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
Suede One, Inc.	$	8,116	$	(396	)	$	1,500	$	7,012

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

8. Goodwill and Intangible Assets

Goodwill, which is not subject to amortization, totaled $7.0 million as of September 30, 2022 and December 31, 2021. The Company completed a qualitative analysis during the fourth quarter of 2021. Based on the qualitative analyses performed, the Company determined that it was not more likely than not that goodwill was impaired and therefore determined that a quantitative analysis was not required. The Company did not recognize any goodwill impairment during the three and nine months ended September 30, 2022.

Intangible assets consist of developed technology and customer relationships. Acquired intangibles are amortized on a straight-line basis over the respective estimated useful lives of the assets.

As of September 30, 2022 and December 31, 2021, the carrying values of intangible assets are as follows (in thousands):

	September 30, 2022
	Gross Book Value		Accumulated Amortization			Net Book Value
Developed technology	$	1,300	$	(421	)	$	879
Customer relationships		200		(194	)		6
Intangible assets, net	$	1,500	$	(615	)	$	885

	December 31, 2021
	Gross Book Value		Accumulated Amortization			Net Book Value
Developed technology	$	1,300	$	(96	)	$	1,204
Customer relationships		200		(44	)		156
Intangible assets, net	$	1,500	$	(140	)	$	1,360

As of September 30, 2022, developed technology and customer relationships have remaining useful lives of 2.0 years and less than a month, respectively. Amortization expense of intangible assets for the three and nine months ended September 30, 2022 was $0.2 million and $0.5 million, respectively. The Company did not recognize any intangible asset impairment losses during the three and nine months ended September 30, 2022.

As of September 30, 2022, the Company estimates future amortization expense of intangible assets as follows (in thousands):

2022 (remaining three months)	$	114
2023		433
2024		338
Total amortization expense	$	885

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Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

9. Leases

The Company leases its facilities for office space under non-cancelable operating leases with contractual lease periods expiring between 2022 and 2025. The Company has no finance leases as of September 30, 2022.

The components of operating lease expense were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Operating lease cost	$	1,005	$	3,019
Variable lease cost		102		266
Short-term lease cost		3		8
Total operating lease cost	$	1,110	$	3,293

Rent expense was $1.0 million and $3.0 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, operating leases had a weighted average remaining lease term of 1.7 years and a weighted average discount rate of 2.9%.

Supplemental cash flow information related to leases was as follows (in thousands):

	Nine Months Ended
	September 30, 2022
Cash paid for operating leases	$	4,621
New operating lease assets obtained in exchange for operating lease liabilities	$	307

Future maturities of lease liabilities as of September 30, 2022 were as follows (in thousands):

	Operating Leases
2022 (remaining three months)	$	1,494
2023		6,193
2024		2,922
2025		90
Total undiscounted lease payments		10,699
Less: imputed interest		(263	)
Total lease liabilities		10,436
Less: current lease liabilities		5,918
Total non-current lease liabilities	$	4,518

Prior to the adoption of ASC 842, future minimum payments for noncancellable operating leases as of December 31, 2021 were as follows (in thousands):

2022	$	6,045
2023		6,105
2024		2,830
2025		41
Total minimum lease payments	$	15,021

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Common Stock

9 Months Ended

Sep. 30, 2022

Common Stock [Abstract]

Common Stock

10. Common Stock

Common stock reserved for future issuance was as follows as of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
2011 Stock Option and Grant Plan:
Options issued and outstanding		4,978,618		5,866,190
RSUs issued and outstanding		788,390		1,259,734
2021 Stock Option and Grant Plan:
Options issued and outstanding		37,027		35,571
RSUs issued and outstanding		7,613,272		3,176,885
Shares available for future grants		6,033,131		6,967,044
2021 Employee Stock Purchase Plan		2,680,017		2,000,000
Total shares of common stock reserved for    future issuance		22,130,455		19,305,424

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Stock-based Compensation Plan

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation Plan

11. Stock-Based Compensation Plan

2011 Stock Option and Grant Plan

In 2011, the Company adopted the 2011 Stock Option and Grant Plan, or the 2011 Plan. The 2011 Plan provides for the granting of stock options and restricted stock units to employees and non-employees of the Company. Options granted under the 2011 Plan may be either incentive stock options or non-qualified stock options. Incentive stock options (ISO) may be granted only to the Company’s employees (including officers and directors who are also employees). Non-qualified stock options (NSO) may be granted to the Company’s employees and non-employees.

Options issued under the 2011 Plan are granted at an exercise price of not less than 100% of the fair market value per share of the common stock on the grant date as determined by the board of directors. Options generally vest with respect to 25% of the shares one year after the options’ vesting commencement date, and the remainder vest in equal monthly installments over the following 36 months. Options have a maximum term of ten years. RSUs issued under the 2011 Plan are subject to terms and conditions as determined by the Company’s board of directors, which may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period.

The 2011 Plan has been replaced by the 2021 Plan as defined below.

2021 Stock Option and Incentive Plan

In connection with the Company’s IPO, the Company adopted the 2021 Stock Option and Incentive Plan, or the 2021 Plan, in January 2021. The 2021 Plan replaced the 2011 Plan, as the Company’s board of directors determined not to make additional awards under the 2011 Plan following the completion of the Company’s IPO. The Company initially reserved 10,000,000 shares of Class A common stock for the issuance of awards under the 2021 Plan. The 2021 Plan provides that the number of shares reserved and available for issuance under the 2021 Plan will automatically increase each January 1, beginning on January 1, 2022, by 5% of the number of outstanding shares of Class A and Class B common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee.

Options issued under the 2021 Plan are granted at an exercise price of not less than 100% of the fair market value per share of the common stock on the grant date as determined by the board of directors. Options granted to new hired employees typically vest with respect to 25% of the shares on the first Company established vest date after the first anniversary of the employee’s date of hire, and ratably each quarter over the ensuing 12-quarter period. Options have a maximum term of ten years. RSUs granted under the 2021 Plan are subject to terms and conditions as determined by the Company’s compensation committee, which may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. RSUs granted to newly hired employees typically vest 25% on the first Company established vest date after the first anniversary of the employee’s date of hire and ratably each quarter over the ensuing 12-quarter period. The maximum term for RSUs granted under the Plan will not exceed seven years from the date of grant.

Employee Stock Purchase Plan

In connection with the Company’s IPO, the Company adopted the 2021 Employee Stock Purchase Plan (ESPP) in January 2021. Under the ESPP, the Company will make offerings to its employees to purchase shares under the ESPP. The Company initially reserved 2,000,000 shares of Class A common stock for issuance under the ESPP. The reserve will automatically increase on January 1st of each calendar year for a period of up to ten years, commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (1) 1% of the total number of shares of Class A and Class B common stock outstanding on December 31st of the preceding fiscal year, (2) 3,000,000 shares of Class A common stock, and (3) a number of shares determined by the Company's compensation committee. Offering periods are generally six months long and begin on June 4th and December 4th of each year, except for the initial offering period. The Company's initial offering period under the ESPP began on January 1, 2022 and ended on June 3, 2022. At the end of each offering period, eligible employees are able to purchase shares at 85% of the lower of the fair market value of the Company's Class A common stock on the first trading day of the offering period or on the date of purchase. Pursuant to the terms of the Merger Agreement, the purchase date for the current offering under the ESPP will be the earlier of (i) December 2, 2022 or (ii) no later than three business days immediately preceding the closing date of the Merger (such date, the “ESPP Termination Date”). There will be no new offering periods after the end of the current offering period and the Company’s ESPP will terminate as of the ESPP Termination Date.

As of September 30, 2022, the total unrecognized stock-based compensation cost related to ESPP outstanding was $0.2 million, to be recognized in the fourth quarter of 2022.

Option to Purchase Common Stock

The following table summarizes option activity for the nine months ended September 30, 2022:

	Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (In Thousands)
Balances at December 31, 2021		5,901,761		$	5.82		5.6	$	67,787
Granted		1,456			35.01
Exercised		(840,625	)		2.79
Forfeited and cancelled		(46,947	)		11.17
Balances at September 30, 2022		5,015,645		$	6.28		5.3	$	49,027
Vested and expected to vest as of September 30, 2022		5,015,645		$	6.28		5.3	$	49,027
Vested and exercisable as of September 30, 2022		4,706,192		$	5.77		5.1	$	47,935

The stock price per share that was used to determine the aggregate intrinsic value of outstanding stock options as of September 30, 2022 and December 31, 2021 was $15.67 and $17.03, respectively. As of September 30, 2022, the stock price per share that was used to determine both the vested and expected to vest options and vested and exercisable options was $15.67.

There were no stock options granted during the three months ended September 30, 2022. The fair value of stock options granted during the nine months ended September 30, 2022 was $17.16 each. The total intrinsic value of options exercised during the three and nine months ended September 30, 2022 was $1.8 million and $8.9 million, respectively.

As of September 30, 2022, the total unrecognized stock-based compensation cost related to unvested options outstanding was $1.9 million, to be recognized over a weighted-average period of 0.9 year.

Restricted Stock Units

RSUs granted prior to the IPO under the 2011 Plan had both time-based service and performance-based vesting conditions. Upon the effectiveness of the IPO, the performance-based vesting condition was satisfied, and therefore, the Company recognized a one-time cumulative stock-based compensation expense of $15.6 million using the accelerated attribution method for the portion of the awards for which the service-based vesting condition has been fully or partially satisfied. Upon the IPO, shares were issued to satisfy the vesting of RSUs with a performance condition. RSUs granted after the IPO under the 2021 Plan generally vest upon the satisfaction of a time-based service condition.

The following table summarizes RSU activity for the nine months ended September 30, 2022:

	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2021		4,436,619		$	26.80
Granted		5,606,406			12.37
Vested		(880,940	)		23.48
Forfeited and cancelled		(760,423	)		23.25
Nonvested as of September 30, 2022		8,401,662		$	17.83

As of September 30, 2022, the total unrecognized stock-based compensation expense related to unvested RSUs was $119.6 million, which will be recognized over a weighted-average period of 2.9 years.

Stock-Based Compensation

The assumptions used to determine the fair value of the stock options and ESPP purchase rights granted for the periods indicated were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Expected dividend yield	—	—	—	—
Expected volatility	—	51.7%	51.7% - 84.1%	52.0%
Risk-free rate	—	1.1%	0.2% - 1.7%	0.6%
Expected term (in years)	—	6.0	0.4 - 6.0	5.6

Stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operations and support	$	1,558	$	758	$	3,906	$	3,810
Research and development		5,732		3,145		15,665		16,882
Marketing		1,942		969		4,866		5,297
General and administrative		4,242		1,796		9,848		12,923
Total	$	13,474	$	6,668	$	34,285	$	38,912

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Net Loss Per Share Attributable to Common Stockholders

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Share Attributable to Common Stockholders

12. Net Loss Per Share Attributable to Common Stockholders

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. In connection with the IPO, the Company established two classes of authorized common stock: Class A common stock and Class B common stock. As a result, all then-outstanding shares of common stock were converted into shares of Class B common stock. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock.

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock were identical, except with respect to voting. As the liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis and the resulting net loss per share attributable to common stockholders were, therefore, the same for both Class A and Class B common stock on an individual or combined basis.

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods indicated (in thousands, except share and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Numerator:
Net loss attributable to common stockholders, basic and diluted	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
Denominator:
Weighted-average shares used to compute net loss per share    attributable to common stockholders, basic and diluted		78,682			76,479			78,160			71,639
Net loss per share attributable to common stockholders,   basic and diluted	$	(0.30	)	$	(0.09	)	$	(0.77	)	$	(1.17	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the dates indicated because including them would have had an anti-dilutive effect (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
RSUs		8,402		2,444		8,402		2,444
Stock options		5,016		6,105		5,016		6,105
ESPP		60		—		60		—
Total		13,478		8,549		13,478		8,549

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

The following table summarizes the Company’s effective tax rate for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Loss before income taxes	$	(23,420	)	$	(6,856	)	$	(60,060	)	$	(83,365	)
Provision for income taxes		120			—			381			180
Effective tax rate		(0.51	)%		0.00	%		(0.63	)%		(0.22	)%

The tax expense for the three and nine months ended September 30, 2022 was primarily attributable to pre-tax foreign earnings. The tax expense for the three and nine months ended September 30, 2021 was primarily attributable to pre-tax foreign earnings.

The Company’s effective tax rate for all periods presented differs from the U.S. statutory tax rate primarily due to valuation allowance recorded against domestic losses and the tax rate differences between the United States and foreign countries.

The Company has a full valuation allowance on its U.S. federal and state deferred tax assets. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized through future operations. As a result of the Company’s analysis of all available objective evidence, both positive and negative, as of September 30, 2022 and December 31, 2021, management believes it is more likely than not that the deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its deferred tax assets.

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Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

On October 3, 2022, the Company entered into the Merger Agreement by and among the Company, Naver, Proton Parent and Merger Sub, pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the Merger as an indirect subsidiary of Naver. As a result of the Merger, each share of Company Common Stock outstanding immediately prior to the effective time of the Merger (subject to certain exceptions set forth in the Merger Agreement) will automatically be canceled and converted into the right to receive $17.90 in cash, without interest and subject to applicable withholding taxes. If the Merger is consummated, the Company’s Class A common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934.

The Merger, expected to close in the first quarter of 2023, is conditioned upon, the approval of the Merger Agreement by the Company’s stockholders, the expiration of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

In October 2022, the Company granted 317,772 RSUs with a grant date fair value of $17.73 per share. The RSUs are subject to service-based vesting conditions, which are generally satisfied over two to four years.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) as well as the instructions to Form 10-Q and the rules and regulations of the U.S. SEC for interim financial information. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements as of that date but does not include all disclosures, including notes required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results of operations expected for the entire year ending December 31, 2022 or for any other future annual or interim periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K (2021 Annual Report) for the year ended December 31, 2021, filed with the SEC on March 30, 2022.

For the foreign subsidiaries where the local currency is the functional currency, translation adjustments of foreign currency financial statements into U.S. dollars are recorded as a separate component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses have not been material for all periods presented.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates include the fair value of financial instruments, the incremental borrowing rate (IBR) applied in lease accounting, capitalization and estimated useful life of internal-use software, allowance for expected chargeback losses, estimates related to credits, incentives and refunds issued to customers, valuation of the convertible notes preceding its IPO, valuation of the redeemable convertible preferred stock warrant liability preceding its IPO, stock-based compensation, valuation of the Company’s common stock preceding its IPO, and valuation of deferred income tax assets and the uncertain tax positions. To the extent there are material differences between these estimates, judgments or assumptions and actual results, the condensed consolidated financial statements will be affected.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when it satisfies its performance obligations. The Company considers both sellers and buyers to be customers. The Company generates revenue from sellers for fees earned when sellers sell items they have listed on the Company’s platform to buyers. The Company generates revenue from buyers for fees earned when they purchase shipping labels used for delivery of the items purchased. The Company periodically reassesses its revenue recognition policies as new offerings become material, and business models evolve. The Company recognizes revenue net of estimated returns and cancellations based on its historical experience. Transactions may be cancelled by a buyer or seller in certain circumstances.

The Company enters into the Terms of Service (TOS) with buyers and sellers to use the Company’s technology platform. The TOS governs these parties’ use of the platform, including payment terms for the buyer and the seller and services to be provided by the Company. Under the TOS, upon the buyer’s purchase from the seller, the Company, buyer, and seller are committed to perform and enforceable rights and obligations are established.

Sellers

Sellers are able to list their items for sale on the Company’s platform at no charge. The Company charges a fee upon the sale of items listed on its platform. The fee is a fixed dollar amount for orders under a certain value, and a fixed percentage of the final sales price of the item for orders greater than that. The service that the Company provides to sellers includes the facilitation of the sale of their items as well as certain ancillary activities such as payment processing and authentication (for certain luxury items). These activities comprise a single performance obligation to sellers, which is to facilitate the sale of the listed items between sellers and buyers on the Company’s platform (sale facilitation).

The Company evaluates the presentation of revenue from sellers on a gross or net basis based on whether it acts as a principal or an agent in the sale of listed items between sellers and buyers. The Company does not control the listed items at any time prior to the transfer of such items to buyers. The Company acts as an agent in facilitating the sale of items from sellers to buyers by allowing them

to connect and interact on the Company’s platform. The Company is not primarily responsible for fulfillment of purchased items, does not have inventory risk, and does not set the price for the listed item. As such, the Company reports revenue from sellers on a net basis to reflect the fees received from sellers.

Revenue is recognized at the point in time the Company satisfies its performance obligation to facilitate the sale of a listed item. This occurs when both the seller and the buyer agree to a sale and the payment is processed on the Company’s platform. For luxury items authenticated by the Company, sale facilitation revenue is recognized when the Company authenticates and arranges for shipment of the items to the buyer, as this is the point in time a sale is finalized and the Company has satisfied its performance obligation.

Buyers

When a sale is finalized, the buyer purchases a shipping label from United States Postal Service (USPS), or the relevant shipping provider for the Canada, Australia and India marketplaces, through the Poshmark platform. The Company emails the shipping label to the seller and the seller ships the item to the buyer through the shipping provider. The Company does not purchase the shipping label on behalf of the buyer until after the buyer has purchased an item and has remitted payment. As a result, the Company has one performance obligation to buyers, which is to facilitate the sale of shipping labels to buyers for delivery of items purchased on the Company’s platform (shipping facilitation).

The Company evaluates the presentation of revenue from buyers on a gross or net basis based on whether it acts as a principal or an agent in shipment of listed items between sellers and buyers. The Company does not control the shipping service, which is provided by the shipping provider. The Company is not primarily responsible for shipping and it does not assume any of the risks for the items shipped such as risk of damage or loss during shipping. The Company acts as an agent of the buyer in facilitating the shipping. As such, the Company reports revenue on a net basis which is the difference between the shipping fee paid by the buyer and the cost of shipping labels paid to the shipping provider.

Revenue from shipping facilitation is recognized upon transfer of the shipping label to the seller on behalf of the buyer.

The Company estimates chargebacks based on historical collectability rates. The Company records a reserve for chargebacks in accrued expenses and other accrued liabilities with an offset to general and administrative expenses.

Sales tax and other amounts collected on behalf of third parties are excluded from the transaction price.

Incentives

Under the referral program, an existing user (the referrer) earns an incentive (Posh Credit) when a new user (the referee) first buys an item on the Company’s platform. Posh Credits are not redeemable for cash and can only be applied for purchases on the Company’s platform. The Company records the incentive to the referrer, which is in exchange for a distinct referral service, as a liability at the time the incentive is earned by the referrer with a corresponding charge recorded to marketing expense in the condensed consolidated statements of operations. Credits and incentives issued to existing users for referring new users are contingent upon a new user completing an initial purchase on the Company’s platform and represent an incremental cost of obtaining a contract with a customer. The Company expenses such new user referral incentives as marketing expense when the referral incentives are earned because the amortization period would be one year or less.

The Company has several buyer incentive programs, which are offered to encourage buyer activity on the Company’s platform. These promotions reduce the fees for shipping facilitation charged by the Company. Accordingly, the Company records these incentives as a reduction to revenue from the buyer when the incentive is used by the buyer. Amounts in excess of cumulative shipping facilitation revenue earned are presented as marketing expense in the condensed consolidated statements of operations.

The Company participates in certain joint incentive programs with sellers that are recorded as a reduction to the fees received from the seller.

The Company may elect to issue incentives to buyers for customer satisfaction purposes or for refunds. These incentives (which are in the form of Posh Credits) can be applied towards future orders and, thereby, result in a reduced fee earned by the Company from the buyer, or redeemable credits that can also be redeemed for cash. In cases where the seller performed as required by the Company’s TOS, the Company reduces shipping facilitation revenue earned on the transaction and any cumulative revenue earned from the same buyer for Posh Credits and redeemable credits granted. If the amount of the incentive exceeds cumulative revenues from the buyer, then the excess is presented as operations and support expense in the consolidated statements of operations. If refunds are provided in a case where the seller did not perform and the amount cannot be recovered from the seller, the refund is presented as a reduction of revenue. Referral incentives, joint incentives, refunds and buyer incentives are recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reduction to net revenue	$	2,478	$	2,491	$	8,478	$	7,152
Operations and support		1,706		1,687		5,562		5,171
Marketing		2,708		2,274		7,927		6,140
	$	6,892	$	6,452	$	21,967	$	18,463

Cost of Net Revenue

Cost of Net Revenue

Cost of net revenue consists of costs associated with credit card processing, order transaction fees and hosting expenses associated with operating the Company’s platform. Cost of net revenue does not include depreciation and amortization.

Stock-Based Compensation

Stock-Based Compensation

The Company measures and recognizes stock-based compensation expense for share-based awards issued to employees and consultants, consisting of stock options, restricted stock units (RSUs), and purchases under the 2021 Employee Stock Purchase Plan (ESPP), on the condensed consolidated statements of operations.

RSUs granted prior to the occurrence of a Qualified IPO vest upon the satisfaction of both time-based service and performance-based conditions. The time-based vesting condition for the majority of these awards is satisfied over four years. The performance-based vesting condition is satisfied upon the occurrence of a qualifying event, which is generally defined as a change in control transaction or the effective date of a Qualified IPO. Through December 31, 2020, no stock-based compensation expense had been recognized for RSUs with a liquidity event performance condition, as such qualifying event was not probable. Upon the completion of Company's IPO, the liquidity event performance condition was met. Accordingly, upon the effectiveness of the IPO, the Company recognized cumulative stock-based compensation expense determined using the grant-date fair values and the accelerated attribution method. The remaining stock-based compensation related to these awards will be recognized over the remaining time-based service over the remaining requisite service period using the accelerated attribution method. RSUs granted after the date of the Qualified IPO only include a time-based service condition. Accordingly, these awards will be measured using the grant date fair values and will be amortized on a straight-line basis over the requisite service period. Forfeitures for all stock-based awards are recognized as they occur.

The Company estimates the fair value of stock options granted to employees and directors and fair value of ESPP purchase rights issued under ESPP using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include:

•per share fair value of the underlying common stock;

•exercise price;

•expected term;

•risk-free interest rate;

•expected annual dividend yield; and

•expected stock price volatility over the expected term.

For all stock options granted, the expected term is calculated using the simplified method. The Company does not have sufficient historical transactions in its own shares on which to base expected volatility and, therefore, uses the historical volatility of the stock price of similar publicly traded peer companies to estimate volatility of equity awards granted. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award.

Prior to the completion of the IPO, the fair value of the shares of common stock underlying the stock options has been determined by the board of directors as there was no public market for the common stock. The board of directors determined the fair value of the Company’s common stock by considering a number of objective and subjective factors including: contemporaneous third-party valuations of the Company’s common stock, the valuation of comparable companies, sales of redeemable convertible preferred stock to unrelated third-parties, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. After the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the Nasdaq Global Select Market.

Leases

Leases

Prior to the adoption of ASC 842

The Company leases office space under non-cancelable operating lease agreements. Certain of these arrangements have free rent, escalating rent payment provisions, and landlord funded leasehold incentives. Rent expense is recorded on a straight-line basis over the lease term. If a lease provides for fixed escalations of the minimum rental payments, the difference between the straight-line rent charged to expense and the amount payable under the lease is recorded as deferred rent in accrued expenses and other current liabilities, and other liabilities. Landlord funded leasehold incentives are recorded as deferred rent in accrued expenses and other current liabilities, and long-term portion of deferred rent and other liabilities and are recognized as an offset to rent expense using the straight-line method over the lease term.

Subsequent to the adoption of ASC 842

The Company determines if an arrangement is a lease at inception. Lease agreements generally contain lease and non-lease components. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of its lease assets and liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments for common area maintenance and utilities. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. As the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. Lease assets also include any prepaid lease payments and lease incentives. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

Operating lease assets and liabilities are recognized on the condensed consolidated balance sheet as operating lease right-of-use assets (ROU), operating lease liabilities, current and operating lease liabilities, noncurrent. Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term.

Concentrations of Risk

Concentrations of Risk

The Company currently uses a few carriers to handle all shipments, gateways to process payments and third-party vendors to host the Company’s information technology environment. A significant disruption in the operations of one of more of these vendors could have an adverse effect on the Company’s business, financial condition, and results of operations.

The majority of the Company’s cash and cash equivalents are held by one high-credit quality financial institution within the United States with balances maintained in excess of the FDIC insurance limits.

No customer accounted for 10% or more of the Company’s net revenue for the three and nine months ended September 30, 2022 and 2021.

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and since that date, has issued several ASUs to further clarify certain aspects of ASU 2016-02 and provide entities with practical expedients that may be elected upon adoption. This standard requires lessees to recognize all leases, including operating leases, on the balance sheet as a right-of-use (ROU) asset and lease liability, unless the lease is a short-term lease. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements – Leases (Topic 842). This update provides an alternative transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented. In June 2020, the FASB issued ASU 2020-05, deferring the effective date for one year for all other entities. The Company adopted this standard using the alternative transition method on January 1, 2022 and recorded $9.2 million right-of-use assets and a $14.5 million lease liability on its condensed consolidated balance sheet. As of January 1, 2022, $2.6 million of deferred rent and $2.7 million related to tenant improvement was derecognized upon adoption. As part of this adoption, the Company elected the package of transitional practical expedients to not reassess (1) whether any contracts that existed prior to adoption have or contain leases, (2) the classification of existing leases or (3) initial direct costs for existing leases. The Company also elected to continue to recognize lease payments related to short-term leases as an expense on a straight-line basis over the lease term.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For available for sale debt securities, credit losses will be presented as an allowance rather than as a write-down. In November 2019, the FASB issued ASU 2019-10, amending the effective dates. The Company adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The Company early adopted this standard on January 1, 2022 on a prospective basis. The adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Referral Incentives, Joint Incentives, Refunds and Buyer Incentives Recorded in Consolidated Statements of Operations

Referral incentives, joint incentives, refunds and buyer incentives are recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reduction to net revenue	$	2,478	$	2,491	$	8,478	$	7,152
Operations and support		1,706		1,687		5,562		5,171
Marketing		2,708		2,274		7,927		6,140
	$	6,892	$	6,452	$	21,967	$	18,463

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Revision of Prior Periods' Financial Statement (Tables)

9 Months Ended

Sep. 30, 2022

Prior Period Adjustment [Abstract]

Summary of Effect of Correction of Misstatements and Resulting Revision

The following table presents the effect of the correction of the misstatements and the resulting revision on the Condensed Consolidated Statements of Operations and Comprehensive Loss:

	Three Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
	(in thousands, except per share data)
Net revenue	$	79,650		$	(187	)	$	79,463
Marketing		36,385			(187	)		36,198
General and administrative		12,070			(341	)		11,729
Total costs and expenses		86,888			(528	)		86,360
Loss from operations		(7,238	)		341			(6,897	)
Loss before provision for income taxes		(7,197	)		341			(6,856	)
Net loss		(7,197	)		341			(6,856	)
Comprehensive loss		(7,128	)		341			(6,787	)
	Nine Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
	(in thousands, except per share data)
Net revenue	$	242,363		$	(557	)	$	241,806
Marketing		104,578			(557	)		104,021
General and administrative		43,706			(1,389	)		42,317
Total costs and expenses		273,181			(1,946	)		271,235
Loss from operations		(30,818	)		1,389			(29,429	)
Loss before (benefit) provision for income taxes		(84,754	)		1,389			(83,365	)
(Benefit) provision for income taxes		(30	)		210			180
Net loss		(84,724	)		1,179			(83,545	)
Comprehensive loss		(83,010	)		1,179			(81,831	)
Net loss per share attributable to common stockholders, basic and diluted	$	(1.18	)	$	0.01		$	(1.17	)

The following table presents the effect of the correction of the misstatements on the Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity (in thousands):

	As Previously Reported			Adjustments		As Revised
As of January 1, 2021
Accumulated deficit	$	(126,509	)	$	3,003	$	(123,506	)
Total stockholders' deficit		(99,782	)		3,003		(96,779	)
As of and for the three months ended September 30, 2021
Net loss attributable to common stockholders		(7,197	)		341		(6,856	)
Accumulated deficit		(211,233	)		4,182		(207,051	)
Total stockholders' equity		418,235			4,182		422,417
As of and for the nine months ended September 30, 2021
Net loss attributable to common stockholders		(84,724	)		1,179		(83,545	)
Accumulated deficit		(211,233	)		4,182		(207,051	)
Total stockholders' equity		418,235			4,182		422,417

The following table presents the effect of the correction of the misstatements on the Condensed Consolidated Statements of Cash Flows (in thousands):

	Nine Months Ended September 30, 2021
	As Previously Reported			Adjustments			As Revised
Net loss	$	(84,724	)	$	1,179		$	(83,545	)
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,188			(46	)		2,142
Net cash provided by operating activities		32,833			1,133			33,966
Cash and cash equivalents:
Beginning of year		235,834			3,068			238,902
End of year		589,028			4,201			593,229

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Supplemental Financial Statement Information (Tables)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Fair Value of Cash Equivalents

The following tables summarize the cost or amortized cost, gross unrealized gains, gross unrealized losses and fair value of the cash equivalents as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022
	Cost or Amortized		Unrealized				Estimated Fair
	Cost		Gains		Losses		Value
Cash equivalents(1)
Money market funds	$	311,342	$	—	$	—	$	311,342
Total	$	311,342	$	—	$	—	$	311,342

(1)Included in cash and cash equivalents on the consolidated balance sheet as of September 30, 2022.

	December 31, 2021
	Cost or Amortized		Unrealized				Estimated Fair
	Cost		Gains		Losses		Value
Cash equivalents(1)
Money market funds	$	309,283	$	—	$	—	$	309,283
Total	$	309,283	$	—	$	—	$	309,283

(1)Included in cash and cash equivalents on the consolidated balance sheet as of December 31, 2021.

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following as of the dates indicated (in thousands):

	September 30, 2022			December 31, 2021
Computer equipment and software	$	2,332		$	1,937
Developed website and software		6,856			5,876
Furniture and fixtures		1,438			1,433
Leasehold improvements and incentives		7,287			7,287
Total property and equipment, gross		17,913			16,533
Less accumulated depreciation and amortization		(11,664	)		(9,157	)
Property and equipment, net	$	6,249		$	7,376

Schedule of Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of the dates indicated (in thousands):

	September 30, 2022		December 31, 2021
Accrued advertising	$	9,966	$	10,176
Accrued sales tax		9,679		8,090
Accrued compensation and benefits		10,785		8,369
Accrued shipping		3,300		2,125
Accrued professional services		2,770		1,321
Contingent consideration		1,223		1,619
Other accrued and other current liabilities		9,862		9,222
Accrued expenses and other current liabilities	$	47,585	$	40,922

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Financial Instruments Measured at Fair Value

The following tables set forth the financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(1)
Money market funds	$	311,342	$	—	$	—	$	311,342
Total	$	311,342	$	—	$	—	$	311,342
Liabilities
Contingent consideration(2)	$	—	$	—	$	1,223	$	1,223
Total	$	—	$	—	$	1,223	$	1,223

(1)Included in cash and cash equivalents on the condensed consolidated balance sheet as of September 30, 2022.

(2)The fair value of contingent consideration was estimated using a Monte Carlo simulation and was based on significant inputs not observable in the market, thus classified as a Level 3 instrument. The inputs include the projected financial results of Suede One, Inc., historical volatility of the Company's and similar publicly traded peer companies' stock price and risk-free interest rate. See Note 7 (Business Combination).

	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(1)
Money market funds	$	309,283	$	—	$	—	$	309,283
Total	$	309,283	$	—	$	—	$	309,283
Liabilities
Contingent consideration(2)	$	—	$	—	$	1,619	$	1,619
Total	$	—	$	—	$	1,619	$	1,619

(1)Included in cash and cash equivalents on the condensed consolidated balance sheet as of December 31, 2021.

(2)The fair value of contingent consideration was estimated using a Monte Carlo simulation and was based on significant inputs not observable in the market, thus classified as a Level 3 instrument. The inputs include the projected financial results of Suede One, Inc., historical volatility of the Company's and similar publicly traded peer companies' stock price and risk-free interest rate. See Note 7 (Business Combination).

Schedule of Change in Contingent Consideration

The following table represents the change in the contingent consideration (in thousands):

	Level 3
Balance as of December 31, 2021	$	1,619
Change in fair value		(396	)
Balance as of September 30, 2022	$	1,223

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Business Combination (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Summary of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed of Suede One, Inc. (in thousands):

Acquiree	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Purchased Intangible Assets		Goodwill
Suede One, Inc.	$	8,116	$	(396	)	$	1,500	$	7,012

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Carrying Value of Intangible Assets

As of September 30, 2022 and December 31, 2021, the carrying values of intangible assets are as follows (in thousands):

	September 30, 2022
	Gross Book Value		Accumulated Amortization			Net Book Value
Developed technology	$	1,300	$	(421	)	$	879
Customer relationships		200		(194	)		6
Intangible assets, net	$	1,500	$	(615	)	$	885

	December 31, 2021
	Gross Book Value		Accumulated Amortization			Net Book Value
Developed technology	$	1,300	$	(96	)	$	1,204
Customer relationships		200		(44	)		156
Intangible assets, net	$	1,500	$	(140	)	$	1,360

Summary of Future Amortization Expense of Intangible Assets

As of September 30, 2022, the Company estimates future amortization expense of intangible assets as follows (in thousands):

2022 (remaining three months)	$	114
2023		433
2024		338
Total amortization expense	$	885

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Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Schedule of Components of Operating Lease Expense

The components of operating lease expense were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Operating lease cost	$	1,005	$	3,019
Variable lease cost		102		266
Short-term lease cost		3		8
Total operating lease cost	$	1,110	$	3,293

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows (in thousands):

	Nine Months Ended
	September 30, 2022
Cash paid for operating leases	$	4,621
New operating lease assets obtained in exchange for operating lease liabilities	$	307

Schedule of Future Minimum Lease Payments Under Operating Leases

Future maturities of lease liabilities as of September 30, 2022 were as follows (in thousands):

	Operating Leases
2022 (remaining three months)	$	1,494
2023		6,193
2024		2,922
2025		90
Total undiscounted lease payments		10,699
Less: imputed interest		(263	)
Total lease liabilities		10,436
Less: current lease liabilities		5,918
Total non-current lease liabilities	$	4,518

Schedule of Future Minimum Payments For Noncancellable Operating Leases

Prior to the adoption of ASC 842, future minimum payments for noncancellable operating leases as of December 31, 2021 were as follows (in thousands):

2022	$	6,045
2023		6,105
2024		2,830
2025		41
Total minimum lease payments	$	15,021

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Common Stock (Tables)

9 Months Ended

Sep. 30, 2022

Common Stock [Abstract]

Summary of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance was as follows as of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
2011 Stock Option and Grant Plan:
Options issued and outstanding		4,978,618		5,866,190
RSUs issued and outstanding		788,390		1,259,734
2021 Stock Option and Grant Plan:
Options issued and outstanding		37,027		35,571
RSUs issued and outstanding		7,613,272		3,176,885
Shares available for future grants		6,033,131		6,967,044
2021 Employee Stock Purchase Plan		2,680,017		2,000,000
Total shares of common stock reserved for    future issuance		22,130,455		19,305,424

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Stock-based Compensation Plan (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Option Activity

The following table summarizes option activity for the nine months ended September 30, 2022:

	Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (In Thousands)
Balances at December 31, 2021		5,901,761		$	5.82		5.6	$	67,787
Granted		1,456			35.01
Exercised		(840,625	)		2.79
Forfeited and cancelled		(46,947	)		11.17
Balances at September 30, 2022		5,015,645		$	6.28		5.3	$	49,027
Vested and expected to vest as of September 30, 2022		5,015,645		$	6.28		5.3	$	49,027
Vested and exercisable as of September 30, 2022		4,706,192		$	5.77		5.1	$	47,935

Schedule of RSUs Activity

The following table summarizes RSU activity for the nine months ended September 30, 2022:

	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested as of December 31, 2021		4,436,619		$	26.80
Granted		5,606,406			12.37
Vested		(880,940	)		23.48
Forfeited and cancelled		(760,423	)		23.25
Nonvested as of September 30, 2022		8,401,662		$	17.83

Schedule of Assumptions to Value Stock Options Granted

The assumptions used to determine the fair value of the stock options and ESPP purchase rights granted for the periods indicated were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Expected dividend yield	—	—	—	—
Expected volatility	—	51.7%	51.7% - 84.1%	52.0%
Risk-free rate	—	1.1%	0.2% - 1.7%	0.6%
Expected term (in years)	—	6.0	0.4 - 6.0	5.6

Schedule of Allocated Stock-based Compensation Expense

Stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows for the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operations and support	$	1,558	$	758	$	3,906	$	3,810
Research and development		5,732		3,145		15,665		16,882
Marketing		1,942		969		4,866		5,297
General and administrative		4,242		1,796		9,848		12,923
Total	$	13,474	$	6,668	$	34,285	$	38,912

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Net Loss Per Share Attributable to Common Stockholders (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods indicated (in thousands, except share and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Numerator:
Net loss attributable to common stockholders, basic and diluted	$	(23,540	)	$	(6,856	)	$	(60,441	)	$	(83,545	)
Denominator:
Weighted-average shares used to compute net loss per share    attributable to common stockholders, basic and diluted		78,682			76,479			78,160			71,639
Net loss per share attributable to common stockholders,   basic and diluted	$	(0.30	)	$	(0.09	)	$	(0.77	)	$	(1.17	)

Schedule of Potentially Dilutive Securities Excluded From Computation of Diluted Net Loss Per Share

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the dates indicated because including them would have had an anti-dilutive effect (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
RSUs		8,402		2,444		8,402		2,444
Stock options		5,016		6,105		5,016		6,105
ESPP		60		—		60		—
Total		13,478		8,549		13,478		8,549

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Summary of Effective Tax Rate from Loss

The following table summarizes the Company’s effective tax rate for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Loss before income taxes	$	(23,420	)	$	(6,856	)	$	(60,060	)	$	(83,365	)
Provision for income taxes		120			—			381			180
Effective tax rate		(0.51	)%		0.00	%		(0.63	)%		(0.22	)%

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Organization - Additional Information (Details)			3 Months Ended		9 Months Ended
	Oct. 03, 2022 USD ($)	Jan. 19, 2021 USD ($) Vote $ / shares shares	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 USD ($) shares	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 USD ($) shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 shares
Organization [Line Items]
Net loss			$ (23,540,000)	$ (6,856,000)	$ (60,441,000)	$ (83,545,000)
Accumulated deficit			(282,276,000)		(282,276,000)		$ (221,835,000)
Net proceeds from initial public offering, after deducting underwriting discounts and commissions and offering expenses					0	293,692,000
Subsequent Event
Organization [Line Items]
Conversion of stock, amount issued	$ 17.90
Additional Paid-in Capital
Organization [Line Items]
Net loss			$ 0	$ 0	0	0
Redeemable Convertible Preferred Stock
Organization [Line Items]
Net loss					$ 0	$ 0
Number of common stock new issued | shares						0
Redeemable convertible preferred stock, shares outstanding | shares			0	0	0	0	0	52,286,631
Initial Public Offering
Organization [Line Items]
Public offering price, per share | $ / shares		$ 42.00
Number of common stock new issued | shares		990,000
Net proceeds from initial public offering, after deducting underwriting discounts and commissions and offering expenses		$ 292,300,000
Initial Public Offering | Additional Paid-in Capital
Organization [Line Items]
Deferred offering cost		4,200,000
Initial Public Offering | Convertible Notes
Organization [Line Items]
Principal amount of convertible notes		$ 50,000,000.0
Initial Public Offering | Common Class A
Organization [Line Items]
Number of votes per share | Vote		1
Conversion of stock shares converted | shares		1
Number of common stock issued and sold | shares		6,600,000
Public offering price, per share | $ / shares		$ 42.00
Initial Public Offering | Common Class A | Convertible Notes
Organization [Line Items]
Conversion of stock shares converted | shares		1,400,560
Public offering price, per share | $ / shares		$ 42.00
Convertible notes, conversion price discount rate		85.00%
Initial Public Offering | Common Class B
Organization [Line Items]
Number of votes per share | Vote		10
Redeemable convertible preferred stock warrants converted into common stock warrants | shares		85,583
Initial Public Offering | Redeemable Convertible Preferred Stock
Organization [Line Items]
Redeemable convertible preferred stock, shares outstanding | shares		52,286,631

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Summary of Significant Accounting Policies - Summary of Referral Incentives, Joint Incentives, Refunds and Buyer Incentives Recorded in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounting Policies [Abstract]
Reduction to net revenue	$ 2,478	$ 2,491	$ 8,478	$ 7,152
Operations and support	1,706	1,687	5,562	5,171
Marketing	2,708	2,274	7,927	6,140
Total incentives	$ 6,892	$ 6,452	$ 21,967	$ 18,463

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($) Customer	Sep. 30, 2021 USD ($) Customer	Sep. 30, 2022 USD ($) Customer	Sep. 30, 2021 USD ($) Customer	Dec. 31, 2020 USD ($)	Jan. 01, 2022 USD ($)	Dec. 31, 2021 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Vesting period			4 years
Stock-based compensation expense	$ 13,474,000	$ 6,668,000	$ 34,285,000	$ 38,912,000
Right-of-use asset	$ 6,739,000		$ 6,739,000				$ 0
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Right-of-use asset		Right-of-use asset
Lease liability	$ 10,436,000		$ 10,436,000
ASU 2016-02
Summary Of Significant Accounting Policies [Line Items]
Right-of-use asset						$ 9,200,000
Lease liability						14,500,000
Deferred rent to be derecognized						2,600,000
Tenant improvement to be derecognized						$ 2,700,000
Net Revenue
Summary Of Significant Accounting Policies [Line Items]
Number of major customers | Customer	0	0	0	0
RSUs
Summary Of Significant Accounting Policies [Line Items]
Stock-based compensation expense					$ 0

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Revision of Prior Periods' Financial Statement - Summary of Effect of Correction of Misstatements and Resulting Revision - Condensed Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net revenue	$ 88,428	$ 79,463	$ 268,430	$ 241,806
Marketing	42,613	36,198	129,606	104,021
General and administrative	20,473	11,729	53,281	42,317
Total costs and expenses	112,703	86,360	330,062	271,235
Loss from operations	(24,275)	(6,897)	(61,632)	(29,429)
Loss before (benefit) provision for income taxes	(23,420)	(6,856)	(60,060)	(83,365)
(Benefit) provision for income taxes	120	0	381	180
Net loss	(23,540)	(6,856)	(60,441)	(83,545)
Comprehensive loss	$ (22,990)	$ (6,787)	$ (59,507)	$ (81,831)
Net loss per share attributable to common stockholders, basic	$ (0.30)	$ (0.09)	$ (0.77)	$ (1.17)
Net loss per share attributable to common stockholders, diluted	$ (0.30)	$ (0.09)	$ (0.77)	$ (1.17)
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net revenue		$ 79,650		$ 242,363
Marketing		36,385		104,578
General and administrative		12,070		43,706
Total costs and expenses		86,888		273,181
Loss from operations		(7,238)		(30,818)
Loss before (benefit) provision for income taxes		(7,197)		(84,754)
(Benefit) provision for income taxes				(30)
Net loss		(7,197)		(84,724)
Comprehensive loss		(7,128)		$ (83,010)
Net loss per share attributable to common stockholders, basic				$ (1.18)
Net loss per share attributable to common stockholders, diluted				$ (1.18)
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net revenue		(187)		$ (557)
Marketing		(187)		(557)
General and administrative		(341)		(1,389)
Total costs and expenses		(528)		(1,946)
Loss from operations		341		1,389
Loss before (benefit) provision for income taxes		341		1,389
(Benefit) provision for income taxes				210
Net loss		341		1,179
Comprehensive loss		$ 341		$ 1,179
Net loss per share attributable to common stockholders, basic				$ 0.01
Net loss per share attributable to common stockholders, diluted				$ 0.01

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Revision of Prior Periods' Financial Statement - Summary of Effect of Correction of Misstatements and Resulting Revision - Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss attributable to common stockholders	$ (23,540)	$ (6,856)	$ (60,441)	$ (83,545)
Total stockholders' equity	395,848	422,417	395,848	422,417	$ 404,723	$ 417,619	$ 419,906	$ (96,779)
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss attributable to common stockholders		(7,197)		(84,724)
Total stockholders' equity		418,235		418,235				(99,782)
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss attributable to common stockholders		341		1,179
Total stockholders' equity		4,182		4,182				3,003
Accumulated Deficit
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss attributable to common stockholders	(23,540)	(6,856)	(60,441)	(83,545)
Total stockholders' equity	$ (282,276)	(207,051)	$ (282,276)	(207,051)	$ (258,736)	$ (221,835)	$ (200,195)	(123,506)
Accumulated Deficit | As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total stockholders' equity		(211,233)		(211,233)				(126,509)
Accumulated Deficit | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total stockholders' equity		$ 4,182		$ 4,182				$ 3,003

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Revision of Prior Periods' Financial Statement - Summary of Effect of Correction of Misstatements and Resulting Revision - Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	$ (60,441)	$ (83,545)
Changes in operating assets and liabilities:
Accrued expenses and other liabilities	9,119	2,142
Net cash provided by operating activities	4,431	33,966
Beginning of period	581,538	238,902
End of period	$ 588,816	593,229
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss		(84,724)
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		2,188
Net cash provided by operating activities		32,833
Beginning of period		235,834
End of period		589,028
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss		1,179
Changes in operating assets and liabilities:
Accrued expenses and other liabilities		(46)
Net cash provided by operating activities		1,133
Beginning of period		3,068
End of period		$ 4,201

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Supplemental Financial Statement Information - Schedule of Fair Value of Cash Equivalents (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Available For Sale Securities [Line Items]
Marketable securities, Cost or Amortized Cost	$ 311,342	$ 309,283
Marketable securities, Unrealized Gains	0	0
Marketable securities, Unrealized Losses	0	0
Marketable securities, Estimated Fair Value	311,342	309,283
Money Market Funds
Schedule Of Available For Sale Securities [Line Items]
Money market funds, Cost or Amortized Cost	311,342	309,283
Money market funds, Unrealized Gains	0	0
Money market funds, Unrealized Losses	0	0
Money market funds, Estimated Fair Value	$ 311,342	$ 309,283

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Supplemental Financial Statement Information - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 17,913	$ 16,533
Less accumulated depreciation and amortization	(11,664)	(9,157)
Property and equipment, net	6,249	7,376
Computer Equipment and Software
Property Plant And Equipment [Line Items]
Total property and equipment, gross	2,332	1,937
Developed Website and Software
Property Plant And Equipment [Line Items]
Total property and equipment, gross	6,856	5,876
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Total property and equipment, gross	1,438	1,433
Leasehold Improvements and Incentives
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 7,287	$ 7,287

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Supplemental Financial Statement Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Liabilities and Other Liabilities [Abstract]
Accrued advertising	$ 9,966	$ 10,176
Accrued sales tax	9,679	8,090
Accrued compensation and benefits	10,785	8,369
Accrued shipping	3,300	2,125
Accrued professional services	2,770	1,321
Contingent consideration	1,223	1,619
Other accrued and other current liabilities	9,862	9,222
Accrued expenses and other current liabilities	$ 47,585	$ 40,922

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Fair Value Measurements - Schedule of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	$ 311,342	$ 309,283
Contingent consideration	1,223	1,619
Total	1,223	1,619
Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	311,342	309,283
Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	311,342	309,283
Contingent consideration	0	0
Total	0	0
Level 1 | Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	311,342	309,283
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	0
Contingent consideration	0	0
Total	0	0
Level 2 | Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Total		0
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total	0
Contingent consideration	1,223	1,619
Total	1,223	1,619
Level 3 | Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	0
Total		$ 0

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Fair Value Measurements - Schedule of Change in Contingent Consideration (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Change in fair value	$ 37	$ 0	$ (396)	$ 0
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Beginning balance			1,619
Change in fair value			(396)
Ending balance	$ 1,223		$ 1,223

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Fair Value Measurements - Additional Information (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Transfers of assets from level 1 into level 2	$ 0	$ 0
Transfers of assets out of level 2 to level 1	0	0
Transfers of liabilities from level 1 into level 2	0	0
Transfers of liabilities out of level 2 to level 1	0	0
Transfers of assets into level 3	0	0
Transfers of assets out of level 3	0	0
Transfers of liabilities into level 3	0	0
Transfers of liabilities out of level 3	$ 0	$ 0

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Business Combination - Additional Information (Details) - USD ($) $ in Thousands	Oct. 12, 2021	Sep. 30, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Intangible assets		$ 1,500	$ 1,500
Developed Technology
Business Acquisition [Line Items]
Intangible assets		1,300	1,300
Customer Relationships
Business Acquisition [Line Items]
Intangible assets		$ 200	$ 200
Suede One, Inc.
Business Acquisition [Line Items]
Business acquisition date	Oct. 12, 2021
Total cash consideration related to acquisition	$ 6,600
Additional cash payable upon certain earnout conditions	2,500
Contingent consideration liability	1,600
Tax benefit related to valuation allowance on net deferred tax assets	400
Suede One, Inc. | Developed Technology
Business Acquisition [Line Items]
Intangible assets	$ 1,300
Intangible assets amortization period	3 years
Suede One, Inc. | Customer Relationships
Business Acquisition [Line Items]
Intangible assets	$ 200
Intangible assets amortization period	1 year

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Business Combination - Summary of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Oct. 12, 2021
Business Acquisition [Line Items]
Goodwill	$ 7,012	$ 7,012
Suede One, Inc.
Business Acquisition [Line Items]
Purchase Consideration			$ 8,116
Net Tangible Assets Acquired/ (Liabilities Assumed)			(396)
Purchased Intangible Assets			1,500
Goodwill			$ 7,012

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Goodwill and Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 7,012,000	$ 7,012,000	$ 7,012,000
Impairment of goodwill	0	0
Amortization of intangible assets	200,000	500,000
Impairment of intangible assets	$ 0	$ 0
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful lives		2 years
Customer Relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful lives		1 month

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Goodwill and Intangible Assets - Summary of Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Book Value	$ 1,500	$ 1,500
Accumulated Amortization	(615)	(140)
Net Book Value	885	1,360
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Gross Book Value	1,300	1,300
Accumulated Amortization	(421)	(96)
Net Book Value	879	1,204
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross Book Value	200	200
Accumulated Amortization	(194)	(44)
Net Book Value	$ 6	$ 156

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Goodwill and Intangible Assets - Summary of Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2022 (remaining three months)	$ 114
2023	433
2024	338
Net Book Value	$ 885	$ 1,360

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Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lessee, Lease, Description [Line Items]
Rent expense	$ 1.0		$ 3.0
Operating leases weighted average remaining lease term		1 year 8 months 12 days
Operating leases weighted average discount rate		2.90%
Minimum
Lessee, Lease, Description [Line Items]
Non cancelable operating lease agreements, contractual lease period expiration year		2022
Maximum
Lessee, Lease, Description [Line Items]
Non cancelable operating lease agreements, contractual lease period expiration year		2025

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Leases - Schedule of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Lease, Cost [Abstract]
Operating lease cost	$ 1,005	$ 3,019
Variable lease cost	102	266
Short-term lease cost	3	8
Total operating lease cost	$ 1,110	$ 3,293

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Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Leases [Abstract]
Cash paid for operating leases	$ 4,621
New operating lease assets obtained in exchange for operating lease liabilities	$ 307

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Leases - Schedule of Future Minimum Lease Payments Under Operating Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Lessee, Operating Lease, Liability, to be Paid [Abstract]
2022 (remaining three months)	$ 1,494
2023	6,193
2024	2,922
2025	90
Total undiscounted lease payments	10,699
Less: imputed interest	(263)
Total lease liabilities	10,436
Less: current lease liabilities	5,918	$ 0
Total non-current lease liabilities	$ 4,518	$ 0

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Leases - Schedule of Future Minimum Payments For Noncancellable Operating Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2022	$ 6,045
2023	6,105
2024	2,830
2025	41
Total minimum lease payments	$ 15,021

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Redeemable Convertible Preferred Stock - Summary of Redeemable Convertible Preferred Stock (Details) - Redeemable Convertible Preferred Stock - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Temporary Equity [Line Items]
Redeemable convertible preferred stock, shares outstanding	0	0	0	52,286,631
Redeemable convertible preferred stock, carrying value	$ 0	$ 0	$ 0	$ 156,175

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Convertible Notes - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 19, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Change in fair value of the convertible notes		$ 0	$ 0	$ 0	$ (49,481)
Common Class A
Debt Instrument [Line Items]
Common stock, shares issued		54,472,825		54,472,825		52,503,819
Convertible Notes | Initial Public Offering
Debt Instrument [Line Items]
Principal amount of convertible notes	$ 50,000
Convertible Notes | Initial Public Offering | Common Class A
Debt Instrument [Line Items]
Convertible notes, conversion price discount rate	85.00%

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Common Stock - Summary of Common Stock Reserved for Future Issuance (Details) - shares	Sep. 30, 2022	Dec. 31, 2021
Class Of Stock [Line Items]
Common stock reserved for future issuance	22,130,455	19,305,424
2011 Stock Option and Grant Plan | Options Issued and Outstanding
Class Of Stock [Line Items]
Common stock reserved for future issuance	4,978,618	5,866,190
2011 Stock Option and Grant Plan | RSUs Issued and Outstanding
Class Of Stock [Line Items]
Common stock reserved for future issuance	788,390	1,259,734
2021 Stock Option and Grant Plan | Options Issued and Outstanding
Class Of Stock [Line Items]
Common stock reserved for future issuance	37,027	35,571
2021 Stock Option and Grant Plan | RSUs Issued and Outstanding
Class Of Stock [Line Items]
Common stock reserved for future issuance	7,613,272	3,176,885
2021 Stock Option and Grant Plan | Shares Available for Future Grants
Class Of Stock [Line Items]
Common stock reserved for future issuance	6,033,131	6,967,044
2021 Employee Stock Purchase Plan
Class Of Stock [Line Items]
Common stock reserved for future issuance	2,680,017	2,000,000

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Stock-based Compensation Plan - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
	Jan. 19, 2021	Jan. 31, 2021	Sep. 30, 2022	Sep. 30, 2022	Dec. 31, 2011	Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period				4 years
Common stock reserved for future issuance			22,130,455	22,130,455		19,305,424
Initial Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Public offering price, per share	$ 42.00
RSUs | Initial Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
One-time cumulative stock-based compensation expense using accelerated attribution method	$ 15.6
Outstanding Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation cost related to unvested options outstanding			$ 1.9	$ 1.9
Unrecognized stock-based compensation cost, weighted-average recognition period				10 months 24 days
Options and RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized			$ 119.6	$ 119.6
Unrecognized stock-based compensation cost, weighted-average recognition period				2 years 10 months 24 days
Common Class A
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares, outstanding			54,472,825	54,472,825		52,503,819
Common Class A | Initial Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Public offering price, per share	$ 42.00
Share Based Compensation Award Tranche Two to Four | RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage				25.00%
2011 Stock Option and Grant Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting description				Options generally vest with respect to 25% of the shares one year after the options’ vesting commencement date, and the remainder vest in equal monthly installments over the following 36 months. Options have a maximum term of ten years.
2011 Stock Option and Grant Plan | Share-based Payment Arrangement, Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage					25.00%
Vesting period					1 year
2011 Stock Option and Grant Plan | Share Based Compensation Award Tranche Two to Four
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period					36 months
2021 Stock Option and Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting description				Options granted to new hired employees typically vest with respect to 25% of the shares on the first Company established vest date after the first anniversary of the employee’s date of hire, and ratably each quarter over the ensuing 12-quarter period. Options have a maximum term of ten years.
2021 Stock Option and Incentive Plan | Common Class A
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for future issuance		10,000,000
2021 Stock Option and Incentive Plan | Common Class A And B
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of annual increase in number of shares reserved and available for issuance		5.00%
2021 Stock Option and Incentive Plan | Share-based Payment Arrangement, Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage		25.00%
2021 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for future issuance			2,680,017	2,680,017		2,000,000
Fair value of stock options granted				$ 17.16
Total intrinsic value of options exercised			$ 0.8	$ 0.9
Options to purchase common stock			0	1,456
Options to purchase common stock, exercise price per share				$ 35.01
Unrecognized stock-based compensation cost related to unvested options outstanding			$ 0.2	$ 0.2
2021 Employee Stock Purchase Plan | Outstanding Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Price per share			$ 15.67	$ 15.67		$ 17.03
2021 Employee Stock Purchase Plan | Vested and Expected to Vest Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Price per share			15.67	15.67
2021 Employee Stock Purchase Plan | Vested and Exercisable Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Price per share			$ 15.67	$ 15.67
2021 Employee Stock Purchase Plan | Common Class A
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for future issuance		2,000,000
Number of years common stock reserve increase		10 years
Common stock, shares, outstanding		3,000,000
Percentage of lower of fair market value of common stock to purchase shares		85.00%
2021 Employee Stock Purchase Plan | Common Class A And B
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of reserve equal to common stock outstanding		1.00%
Minimum | 2011 Stock Option and Grant Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted as percentage on fair value of stock					100.00%
Minimum | 2021 Stock Option and Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted as percentage on fair value of stock		100.00%
Maximum | RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Term of awards				7 years
Maximum | 2011 Stock Option and Grant Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Term of awards					10 years
Maximum | 2021 Stock Option and Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Term of awards		10 years

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Stock-based Compensation Plan - Schedule of Option Activity (Details) - 2021 Employee Stock Purchase Plan - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning Balance		5,901,761
Outstanding Options, Granted	0	1,456
Outstanding Options, Exercised		(840,625)
Outstanding Options, Forfeited and cancelled		(46,947)
Ending Balance	5,015,645	5,015,645	5,901,761
Outstanding Options, Vested and expected to vest	5,015,645	5,015,645
Outstanding Options, Vested and exercisable	4,706,192	4,706,192
Weighted-Average Exercise Price, Beginning balance		$ 5.82
Weighted-Average Exercise Price, Granted		35.01
Weighted-Average Exercise Price, Exercised		2.79
Weighted-Average Exercise Price, Forfeited and cancelled		11.17
Weighted-Average Exercise Price, Ending Balance	$ 6.28	6.28	$ 5.82
Weighted-Average Exercise Price, Vested and expected to vest	6.28	6.28
Weighted-Average Exercise Price, Vested and exercisable	$ 5.77	$ 5.77
Weighted-Average Remaining Contractual Term (In Years)		5 years 3 months 18 days	5 years 7 months 6 days
Weighted-Average Remaining Contractual Term (In Years), Vested and expected to vest		5 years 3 months 18 days
Weighted-Average Remaining Contractual Term (In Years), Vested and exercisable		5 years 1 month 6 days
Aggregate Intrinsic Value	$ 49,027	$ 49,027	$ 67,787
Aggregate Intrinsic Value, Vested and expected to vest	49,027	49,027
Aggregate Intrinsic Value, Vested and exercisable	$ 47,935	$ 47,935

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Stock-based Compensation Plan - Schedule of RSUs Activity (Details) - RSUs	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Nonvested, beginning balance | shares	4,436,619
Number of Shares, Granted | shares	5,606,406
Number of Shares, Vested | shares	(880,940)
Number of Shares, Forfeited and cancelled | shares	(760,423)
Number of Shares, Nonvested, ending balance | shares	8,401,662
Weighted-average grant date fair value, Nonvested, beginning balance | $ / shares	$ 26.80
Weighted-average grant date fair value, Granted | $ / shares	12.37
Weighted-average grant date fair value, Vested | $ / shares	23.48
Weighted-average grant date fair value, Forfeited and cancelled | $ / shares	23.25
Weighted-average grant date fair value, Nonvested, ending balance | $ / shares	$ 17.83

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Stock-based Compensation Plan - Schedule of Assumptions to Value Stock Options Granted (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected volatility	0.00%	51.70%		52.00%
Expected volatility, minimum			51.70%
Expected volatility, maximum			84.10%
Risk-free rate	0.00%	1.10%		0.60%
Risk-free rate, minimum			0.20%
Risk-free rate, maximum			1.70%
Expected term (in years)		6 years		5 years 7 months 6 days
Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term (in years)			6 years
Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected term (in years)			4 months 24 days

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Stock-based Compensation Plan - Schedule of Allocated Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 13,474	$ 6,668	$ 34,285	$ 38,912
Operations and Support
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1,558	758	3,906	3,810
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	5,732	3,145	15,665	16,882
Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1,942	969	4,866	5,297
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 4,242	$ 1,796	$ 9,848	$ 12,923

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Net Loss Per Share Attributable to Common Stockholders - Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net loss attributable to common stockholders, basic and diluted	$ (23,540)	$ (6,856)	$ (60,441)	$ (83,545)
Net loss	$ (23,540)	$ (6,856)	$ (60,441)	$ (83,545)
Denominator:
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic	78,682	76,479	78,160	71,639
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted	78,682	76,479	78,160	71,639
Net loss per share attributable to common stockholders, basic	$ (0.30)	$ (0.09)	$ (0.77)	$ (1.17)
Net loss per share attributable to common stockholders, diluted	$ (0.30)	$ (0.09)	$ (0.77)	$ (1.17)

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Net Loss Per Share Attributable to Common Stockholders - Schedule of Potentially Dilutive Securities Excluded From Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of diluted net (loss) income per share	13,478	8,549	13,478	8,549
RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of diluted net (loss) income per share	8,402	2,444	8,402	2,444
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of diluted net (loss) income per share	5,016	6,105	5,016	6,105
ESPP
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of diluted net (loss) income per share	60	0	60	0

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Income Taxes - Summary of Effective Tax Rate from Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Loss before income taxes	$ (23,420)	$ (6,856)	$ (60,060)	$ (83,365)
Provision for income taxes	$ 120	$ 0	$ 381	$ 180
Effective tax rate	(0.51%)	0.00%	(0.63%)	(0.22%)

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Subsequent Events - Additional Information (Details) - USD ($)			9 Months Ended
	Oct. 31, 2022	Oct. 03, 2022	Sep. 30, 2022
Subsequent Event [Line Items]
Vesting period			4 years
Subsequent Event
Subsequent Event [Line Items]
Conversion of stock, amount issued		$ 17.90
Subsequent Event | RSUs
Subsequent Event [Line Items]
Outstanding Options, Granted	317,772
Weighted-Average Exercise Price, Granted	$ 17.73
Minimum | Subsequent Event | RSUs
Subsequent Event [Line Items]
Vesting period	2 years
Maximum | Subsequent Event | RSUs
Subsequent Event [Line Items]
Vesting period	4 years