{"url_path":"/sec/dibs/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 Quantitative and Qualitative Disclosures about Market Risk","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1600641/0001600641-26-000019-index.html","accession_number":"0001600641-26-000019","cik":"0001600641","ticker":"DIBS","issuer_name":"1stdibs.com, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1600641/0001600641-26-000019-index.html","primary_entity_key":"0001600641","primary_entity_name":"1stdibs.com, Inc."},"word_count":797,"has_tables":true,"body_markdown":"Item 3. Quantitative and Qualitative Disclosures about Market Risk\n\nInformation relating to quantitative and qualitative disclosures about these market risks are described below. We maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limits. We have not experienced any credit losses related to our cash, cash equivalents, and short-term investments balances.\n\nWe have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business, primarily related to interest rate fluctuations and foreign currency exchange movements. These risks arise principally from our cash, cash equivalents, and short-term investments, as well as from our international operations and transactions denominated in currencies other than the U.S. dollar.\n\n32\n\nInterest Rate Sensitivity\n\nInterest rate risk relates to the loss we could incur in our cash, cash equivalents and short-term investments due to a change in interest rates. As of March 31, 2026, we had cash, cash equivalents and short-term investments of $85.3 million. Our cash and cash equivalents consist primarily of demand, money market accounts, and available-for-sale debt securities with an original maturity of 90 days or less. Our short-term investments consist primarily of U.S. Government agency and Treasury securities, as well as commercial paper and corporate notes which have an original maturity greater than 90 days and are highly liquid in nature. Due to the nature of our cash, cash equivalents and short-term investments, we would expect a hypothetical 100 basis point increase or decrease in interest rates to result in an approximate increase or decrease of $0.6 million in our cash, cash equivalents and short-term investments. The sensitivity analysis above is based on a simplified, hypothetical scenario and is not intended to represent actual outcomes, which may differ due to changes in the timing of interest rate movements, investment maturities, and other factors.\n\nOur principal use of cash, cash equivalents and short-term investments is to fund our operations including platform development to support our strategic initiatives and anticipated share repurchases under our Stock Repurchase Program. The remainder of cash, cash equivalents and short-term investments are held for working capital purposes and other potential uses including strategic investment opportunities. We do not enter into investments for trading or speculative purposes.\n\nForeign Currency Risk\n\nOur net revenue is primarily denominated in U.S. dollars, Euros, and British pounds, depending on the currency selection of the seller. Our cost of revenue and operating expenses are primarily denominated in U.S. dollars. As we operate an online marketplace with international activity, including transactions denominated primarily in Euros and British pounds, we are exposed to the risk of fluctuations in foreign currency exchange rates. We monitor our foreign currency exposure on an ongoing basis and evaluate the tools and approaches available to manage such risk as our business evolves. To date, fluctuations due to changes in the Euro and the British pound have not been significant, but we may experience material foreign exchange gains and losses in our statement of operations in the future. For the three months ended March 31, 2026 and 2025, foreign currency translation adjustments resulted in a gain of $0.3 million and a gain of $0.1 million, respectively. As of March 31, 2026, we would expect an adverse 10% change in current exchange rates to result in no more than a $0.7 million decrease in net revenue for the three months ended March 31, 2026.\n\nCredit Risk\n\nWe are exposed to credit risk on accounts receivable balances. This risk is mitigated by requiring upfront payment for many of our services due to our diverse seller base, dispersed over various geographic regions and industry sectors. For the three months ended March 31, 2026 and 2025, no single customer accounted for more than 10% of our net revenue. We maintain provisions for potential credit losses and such losses to date have been within our expectations. We evaluate the solvency of our customers on an ongoing basis to determine if additional allowances for doubtful accounts need to be recorded.\n\nInflation Risk\n\nOur results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe certain metrics have continued to be impacted negatively, both directly and indirectly, by macroeconomic factors, including significant housing market volatility, significant capital market volatility, and global economic and geopolitical developments. Additionally, if our costs were to become subject to inflationary pressures, we might not be able to fully offset such higher costs through GMV and net revenue increases. Our inability or failure to do so could harm our business, financial condition, and results of operations. We cannot assure you that our business will not be affected in the future by inflation."}