David will provide an update on our business, including our strategy and growth opportunities, and Tom will review our second quarter financial results and third quarter outlook. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release, which you can find on our investor relations website, along with the replay of this call. Lastly, please note that all growth comparisons are made on a year-over-year basis unless otherwise noted. Our second quarter results confirm that we are on track to sustainable top-line growth and positive adjusted EBITDA.
GMV of $96 million, up 7%, came in above the high end of our guidance range and was our strongest growth since the fourth quarter of 2024. Conversion grew for the 11th consecutive quarter, average order values expanded, and the number of sessions stabilized sequentially. High-end furniture demand, based on the credit card data we track, continues to decline year-over-year and has not shown material improvement. Our 2026 GMV growth expectation does not depend on a macro recovery.
GMV of $96 million and revenue of $23.3 million both came in above the high end of guidance and did so despite substantial sales and marketing reductions. Adjusted EBITDA margin of approximately 6% came in well above the high end of guidance, an improvement of over 13 percentage points versus a year ago. From 2022 through 2025, we re-engineered the business to be able to convert revenue recovery into outsized margin expansion. This dynamic was on full display in Q2, and our confidence in positive full-year adjusted EBITDA remains.
| Metric | Period | Current guidance |
|---|---|---|
| GMV | Q3 2026 | $89M-$94M (flat to +6% YoY) |
| Net revenue | Q3 2026 | $22.0M-$22.9M (flat to +4% YoY) |
| Adjusted EBITDA margin | Q3 2026 | -1% to +2% |
| GMV growth | FY2026 | Now expected to grow year-over-year for the full year (Q4 growth reaffirmed) |
| Revenue take rate | FY2026 | 24%-25% (mix shift to higher-value, lower-commission orders) |
| Gross margin | FY2026 | 72%-74% |
| Adjusted EBITDA | FY2026 | Positive for the full year |
| Free cash flow | FY2026 | No longer likely positive due to a non-economic payment-processor accounting reclassification |
| Metric | YoY | Note |
|---|---|---|
| GMV | +7% to $96M | Above the high end of guidance and strongest growth since Q4 2024, driven by roadmap progress across discovery, trust, shipping, and service rather than any macro tailwind. |
| Net revenue | +5% to $23.3M | Above guidance; transaction revenue (tied to GMV) was ~74% of the total, plus ~$270K of non-endemic 1stDibs 50 advertising revenue; grew slower than GMV on a lower blended take rate. |
| Average order value | +10% to ~$2,850 | Broad-based strength (median order value also +10% to ~$1,500), aided by two high-value art sales totaling over $2 million; reflects buyer trust at the high end of the market. |
| Gross margin | +210 bps to 73.9% | High end of the 72%-74% target range on lower professional services, depreciation, and shipping costs. |
| Adjusted EBITDA margin | +13 pts to ~6% | Revenue upside flowing disproportionately to the bottom line from the 2022-2025 cost-structure rebuild; adjusted EBITDA of $1.3M. |
| Sales & marketing expense | -34% to $5.4M | Late-2025 realignment that reset the marketing organization and rationalized performance-marketing spend; S&M fell to 23% of revenue from 37%. |
| Active buyers | -10% to ~57,700 | Deliberate reduction in sales and marketing spend; unique sellers held steady at ~5,700 and listings grew 1% to nearly 1.9 million. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Four-pillar product roadmap | Pillars were discovery, pricing, shipping, and service | The pricing pillar was broadened into a wider 'trust' initiative spanning authenticity, seller quality, and platform integrity; first half built the foundation, second half focuses on broadening deployment across service areas. | — |
| AI as the core growth engine | Over 50% of new code AI-assisted | Over 70% of new code is now AI-assisted; AI drives the highest-priority initiatives in each pillar (semantic/natural-language search, personalization ML model, ML freight quoting, and the customer-service chatbot). | — |
| Discovery and personalization | Recommendations surfaced items similar to prior views | Launched image search on mobile web and desktop across ~1.9 million listings and a new personalization ML model that drove the highest-ever homepage recommendation click-through rate; homepage evolving from an editorial destination to a personalized feed. | — |
| Growth independent of the macro | Growth expected to require an eventual housing recovery | Management repeatedly stressed 2026 GMV growth does not depend on a macro recovery, citing Q2 as proof, while noting the business would benefit whenever the luxury housing and home-furnishings market normalizes. | — |
| Tastemakers / social media | Ambassador program in pilot | Pilot completed with Instagram following topping 1 million, Reels production doubling year-over-year, and total video view time tripling versus Q1; program to be scaled significantly in the second half, improving paid-media efficiency and reaching a younger audience. | — |
| Capital returns | Repurchase program active | Repurchased ~2.4 million shares for $11.1 million in Q2, exhausting the 2026 authorization; cumulative buybacks of ~11.4 million shares for ~$55.3 million; ended the quarter with $67.7 million in cash and investments. | — |