1stDibs Q2 2026 Earnings: Lower Costs Drive Positive Adjusted EBITDA

1stDibs (NASDAQ: DIBS) reported Q2 2026 net revenue of $23.3 million, up 5% year over year, while GAAP diluted EPS improved to -$0.03 from -$0.12. GMV rose 7% to $96.0 million despite fewer orders and active buyers, while gross-margin expansion and lower sales and marketing spending helped adjusted EBITDA turn positive.

Core financial results

Revenue growth remained moderate, but gross profit increased faster because cost of revenue declined from a year earlier. Total operating expenses also fell, narrowing the GAAP operating and net losses and producing a positive non-GAAP adjusted EBITDA result.

The following figures cover the three months ended June 30, 2026 and are preliminary pending the company’s Form 10-Q filing.

Higher transaction values offset fewer buyers and orders

Marketplace GMV increased 7% to $96.0 million, which management described as the company’s fastest growth rate since late 2024. However, orders declined 4% to approximately 32,000, while trailing-12-month active buyers fell 10% to approximately 58,000.

Based on the rounded operating metrics, implied GMV per order was about $3,000, roughly 12% higher than in the prior-year quarter. This indicates that GMV growth came from greater value per order rather than broader buyer participation. The company did not provide a product- or category-level explanation for that change.

CEO David Rosenblatt said the company believes it gained market share despite reducing sales and marketing spending, attributing the improvement to its product roadmap. The continued decline in active buyers nevertheless remains an important counterpoint to the GMV growth.

Profitability, cash flow and the balance sheet

Lower marketing spending improved operating leverage

Gross margin expanded by 2.1 percentage points as cost of revenue declined to $6.1 million from $6.2 million even as revenue increased. Sales and marketing expense fell approximately 34% to $5.4 million, accounting for most of the reduction in total operating expenses to $19.3 million from $21.6 million.

Technology development expense increased to $6.3 million from $5.9 million, while general and administrative expense was nearly unchanged at $6.7 million. The combination of higher gross profit and lower overall expenses reduced the operating loss by $3.7 million.

Adjusted EBITDA reached $1.3 million, with a 5.6% margin, compared with a loss of $1.8 million and a negative 7.9% margin a year earlier. Investors should distinguish that non-GAAP improvement from the remaining GAAP operating loss: adjusted EBITDA excluded $3.0 million of stock-based compensation during the quarter, among other items.

A payment-processor change weighed on reported cash flow

Q2 operating cash outflow improved slightly to $4.8 million from $5.1 million, while free cash outflow narrowed to $5.1 million from $5.3 million. The company said a change to its payment-processor agreement reclassified approximately $5.9 million from cash to receivables and negatively affected reported free cash flow. On a simple add-back basis, excluding that effect would put Q2 free cash flow at approximately positive $0.8 million.

Cash, cash equivalents and short-term investments totaled $67.7 million at June 30, down from approximately $95.0 million at December 31, 2025. During the first half of 2026, 1stDibs used $20.7 million to repurchase common stock and $3.7 million in operating activities.

Q3 2026 guidance

The new Q3 outlook calls for lower GMV, revenue and adjusted EBITDA margin compared with Q2’s actual results. This points to sequential moderation following the improvement recorded in the second quarter.

The outlook does not establish whether the active-buyer decline will stabilize, making buyer participation and order trends important indicators of whether GMV growth can become more broadly based.

Recent insider transactions

The supplied insider data reports 14 purchase transactions totaling 779,599 shares and two sales totaling 15,000 shares over the past six months, for net purchases of 764,599 shares. The latest entry with a specified purchase direction and reported value was an indirect purchase by CEO David Rosenblatt.

The transaction is presented objectively and does not by itself establish management’s view of the company’s valuation or future performance.

Risks investors should watch

• Buyer and order contraction: Active buyers declined 10% and orders fell 4%. If higher GMV per order does not continue to offset those declines, marketplace growth could weaken.
• Sequential slowdown in the Q3 outlook: Every Q3 guidance range is below the corresponding Q2 result, including a potential return to a negative adjusted EBITDA margin at the low end.
• GAAP and cash-flow profitability remain incomplete: The company still reported a GAAP operating loss and negative free cash flow, even though the payment-processor reclassification materially affected reported cash conversion.
• Reduced liquidity following repurchases: Cash and short-term investments declined during the first half as the company spent $20.7 million on share repurchases while operating cash flow remained negative.

Summary

1stDibs’ Q2 2026 results showed improving operating leverage: moderate revenue growth, a higher gross margin and substantially lower marketing spending turned adjusted EBITDA positive and narrowed GAAP losses. The main unresolved issue is the quality and durability of marketplace growth, because higher GMV per order offset declines in both orders and active buyers. Q3 guidance points to sequential moderation, making buyer trends, expense discipline and the conversion of adjusted profitability into cash flow the key measures to follow.