1stdibs.com (NASDAQ:DIBS) said it exited 2025 as an Adjusted EBITDA-positive company, highlighting a fourth quarter that management described as a “landmark inflection point” and its first quarter of Adjusted EBITDA profitability as a public company. On the company’s fourth-quarter 2025 earnings call, executives emphasized a deliberate shift in the second half of 2025 to prioritize profitability and unit economics over near-term gross merchandise value (GMV) growth, while outlining a 2026 product roadmap intended to support a return to year-over-year GMV growth by the fourth quarter of 2026.
Management frames 2025 as a turning point
Chief Executive Officer David Rosenblatt said 2025 was “a year of accountability and focused execution,” culminating in positive Adjusted EBITDA. Looking ahead, Rosenblatt said the company’s 2026 financial plan is focused on maintaining sustained Adjusted EBITDA profitability, and he expects a third consecutive year of positive year-over-year revenue growth in 2026, alongside positive Adjusted EBITDA and free cash flow.
Fourth-quarter results: GMV down, profitability improves
For the fourth quarter, the company reported GMV of $90.2 million, down 5% year over year and at the low end of its guidance range. Rosenblatt said Adjusted EBITDA finished above the high end of the company’s range.
Chief Financial Officer Thomas Etergino said fourth-quarter Adjusted EBITDA was $1.3 million, representing a 6% margin and a 1,300 basis point expansion from the prior year’s quarter. Etergino also pointed to a multi-year cost structure reset, saying the company began reengineering costs in 2022, accelerated that focus through 2023, and demonstrated early operating leverage in 2024.
Etergino said that over the last four years the company reduced annual operating expenses by 18%, or nearly $18 million, excluding one-time gains from the sale of Design Manager, and lowered headcount by more than 30% from its peak. Over that period, he said gross margins increased from 69% in 2022 to 73% in 2025, and Adjusted EBITDA margins improved by approximately 1,900 basis points.
Traffic and marketing changes weigh on orders as AOV rises
Management attributed the quarter’s GMV performance to a strategic marketing shift. Etergino said traffic headwinds increased across organic and paid channels, and noted that starting in the third quarter the company “aggressively tightened ROI thresholds,” intentionally pruning lower-intent traffic to prioritize unit economics. Order volumes declined 9%, which was partially offset by a ninth consecutive quarter of conversion rate growth and an increase in average order value.
On-platform average order value reached nearly $2,600, up 5%, while median order value rose 4% to approximately $1,250. Etergino said the increase was fueled “first and foremost” by returning buyers spending more per order, along with a higher mix of orders from repeat customers.
The company said over 80% of traffic came from organic sources, up 8 percentage points year over year. Etergino called that organic strength a “critical competitive advantage,” citing the 1stDibs brand.
Other operational metrics included:
- Active buyers of approximately 60,700, down 5%.
- Approximately 5,700 unique sellers, down 4%, which management said reflected normalization following fourth-quarter pricing adjustments.
- Listings grew 3% to nearly 1.9 million.
- Jewelry was cited as the most resilient category, with GMV down 1%.
Revenue, margins, and expense trends
Net revenue was $23 million, up 1%. Transaction revenue represented about 73% of total revenue, with subscriptions making up most of the remainder. Etergino said take rates increased roughly 140 basis points year over year, driven by October pricing increases and continued growth in sponsored listings.
Gross profit was $16.9 million, up 3%, with gross margin of about 74%, up 1 percentage point from a year earlier.
On the expense side, sales and marketing expense was $5.9 million, down 44%, which Etergino tied to the strategic realignment completed in 2025 and rationalization of performance marketing. Technology development expense rose 9% to $6 million, reflecting higher headcount-related costs as the company rebalanced talent toward product and engineering roles. General and administrative expense increased 5% to $7 million due primarily to a one-time sales tax-related item. Provision for transaction losses was approximately $400,000, or 2% of revenue, down from 4% a year ago and at the low end of the company’s historical 2% to 4% range.
Total operating expenses were $19.2 million, an 18% decrease. Etergino said the reduction lowered the company’s breakeven threshold, enabling positive Adjusted EBITDA despite macro headwinds in the luxury home category.
Outlook and 2026 initiatives: AI, discovery, pricing, shipping, and service
For the first quarter, the company guided for GMV of $86.5 million to $91.5 million, implying a year-over-year decline of 9% to 3%. It also forecast net revenue of $22.1 million to $23.1 million (down 2% to up 2%) and an Adjusted EBITDA margin ranging from breakeven to 4%.
Etergino said the GMV outlook reflected the intentional impact of sales and marketing reductions, while the company expects continued growth in conversion and average order value. He said revenue guidance reflects continued growth in sponsored listings and benefits from the seller subscription price increase that took effect October 1. For gross margin, the company expects 72% to 74% in the first quarter and outlined a 2026 framework calling for gross margins of 72% to 74% and revenue take rates of 25% to 26%, up from 24% to 25% in 2025.
Rosenblatt and Etergino repeatedly pointed to the company’s product roadmap as the key driver of expected GMV improvement later in 2026. Rosenblatt said 2026 work is organized around four pillars: discovery, pricing, shipping, and service. He described planned AI-powered semantic and image search intended to reduce the need for “collector’s specialized nomenclature,” as well as an updated personalization engine. He also highlighted a new “1stDibs Tastemakers” ambassador and influencer initiative and said the company is significantly expanding sponsored listings, which management described as a high-margin revenue lever.
On pricing, Rosenblatt said the company is investing in negotiation and “make offer” flows and plans to introduce historical price comparisons and market data into the buyer journey. He also said the company is expanding enforcement of price parity and expects to incorporate AI to automate and expand coverage, while promoting its Price-Match Guarantee. In the Q&A, Rosenblatt said the AI-driven expansion should “roughly double” the amount of product covered, while noting the company does not disclose current coverage levels for competitive reasons.
On shipping, Rosenblatt said 1stDibs intends to revamp its shipping experience to clarify roles and responsibilities among 1stDibs, sellers, and buyers, with the goal of lowering shipping prices and enabling “all-in pricing” earlier in the funnel. On service, he said the company plans to integrate AI support for routine inquiries and to introduce an AI item upload assistant for sellers to streamline listing and improve metadata quality.
In discussing AI more broadly, Rosenblatt said management views AI as a catalyst rather than a competitive threat, arguing that 1stDibs’ moat is based on trust, seller reputation, one-of-a-kind inventory, and complex logistics and payments infrastructure—factors he said are difficult to replicate through algorithms alone.
On capital allocation, Etergino said the company ended the quarter with $95 million in cash equivalents and short-term investments. The company repurchased about $1.6 million of shares during the quarter, with $10.4 million remaining under its $12 million authorization as of December 31.
About 1stdibs.com (NASDAQ:DIBS)
1stDibs.com is an online marketplace specializing in high-end furniture, fine art, jewelry, watches, fashion and decor. The platform curates offerings from independent dealers, galleries and luxury brands, enabling vetted sellers to reach discerning buyers around the world. Headquartered in New York with an additional office in Paris, 1stDibs has built a reputation for quality and authenticity through rigorous seller screening and detailed item vetting.
Launched in 2001 by founder Michael Bruno, the company has grown into a leading destination for both private collectors and interior design professionals.
