Poshmark Inc. (POSH, Financial), a leading social marketplace for new and second-hand styles for women, men, kids and pets, along with home decor and more, left some investors underwhelmed with its vision of the next quarter. Its first-quarter 2022 guidance calls for revenue of $86 million to $88 million, a less optimistic view than that of some analysts.
The Redwood City, California-based company on Tuesday released financial results for fourth-quarter and full-year 2021, which ended on Dec. 31. Poshmark posted net revenue of $84.2 million for the fourth quarter, a 22% year-over-year increase from the same period in 2020. Gross merchandise value grew by 27% year over year to $490.8 million. Quarterly GMV has increased year over year for the past 16 quarters.
While Poshmark is working hard on expansion and anticipating a broadening of its market share, profitability – which may well lie ahead – has thus far excited few. The current market cap of the company is about $965.62 million. Just after noon on Thursday, shares were trading around $13.98, down 20 cents or 1.41%.
A variety of investment firms slashed their price targets for the online retailer after seeing its disappointing first-quarter revenue guidance, which failed to match Wall Street’s consensus projections. Among them were Morgan Stanley, which lowered its target from $20 to $18, Guggenheim, which went from $22 to $13, and Stifel, which lowered its targeted price from $23 to $19.
Morgan Stanley analyst Lauren Schenk spoke for many when she wrote, "A 4Q beat, overshadowed by a weaker than feared 1Q: After several in-line quarters, and a miss-and-lower last quarter, POSH remains squarely in the penalty box as it has been unable to deliver a clean 'beat and raise' quarter since its IPO just over a year ago."
In a statement, Poshmark founder and CEO Manish Chandra praised its record GMV and revenue, noting it was a "strong finish to a historic year."
“Despite a very unpredictable and volatile environment globally, we delivered our second year of adjusted Ebitda profitability and positive free cash flow during our first year as a public company,” he said. “Throughout the year, consumers came to Poshmark to discover, shop the latest trend, and connect with our community. This culminated in our strongest-ever holiday performance and record trailing 12 months active buyers of 7.6 million.”
For all of 2021, Poshmark’s social interactions were up 47% year over year to 44.6 billion. Stacked buyer cohort retention was 104%, which accelerated from 102% in 2020, while stacked seller cohort retention was 112%, accelerating from 111% last year.
For the full year, Poshmark’s GMV was $1.8 billion, an increase of 27% year over year from $1.4 billion. GMV has increased year over year for 10 years, the release noted.
Net revenue was $326 million, a 25% increase year over year. Adjusted Ebitda was $7.3 million, which decreased from $36 million in 2020. The adjusted Ebitda margin was 2.2%.
GAAP results from operations were a loss of $44.4 million in 2021, compared to income of $25.2 million in 2020, and includes $48.2 and $8.0 million in stock-based compensation, respectively, management said. Non-GAAP income from operations (excluding stock-based compensation) was $3.8 million, compared to $33.2 million the year prior. The GAAP diluted net loss per share attributable to common stockholders was $1.35 compared to earnings of 33 cents per share in 2020.
In October, Poshmark completed its acquisition of Suede One, a platform that combines machine learning, computer vision and expert human review to virtually authenticate sneakers. Later that month, it launched its Brand Closets program, which enables large-scale brands to open a closet on Poshmark to directly connect, converse with and sell to its “highly engaged” community of over 80 million registered users, accessing a new sales channel that executives feel is “the future of shopping.”
