分组1 - The RealReal reported a quarterly loss of $0.13 per share, which was better than the Zacks Consensus Estimate of a loss of $0.15, representing an earnings surprise of +13.33% [1] - The company posted revenues of $165.19 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.13% and showing an increase from $144.93 million year-over-year [2] - The RealReal has surpassed consensus EPS estimates two times over the last four quarters [2] 分组2 - The stock has underperformed, losing about 47.4% since the beginning of the year, while the S&P 500 gained 7.9% [3] - The current consensus EPS estimate for the coming quarter is -$0.13 on revenues of $161.63 million, and for the current fiscal year, it is -$0.15 on revenues of $663.37 million [7] - The Zacks Industry Rank for Consumer Products - Discretionary is in the top 28% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Data and Key Metrics Changes - The company reported a record GMV of $5.04 billion and record revenue of $165 million, both up 14% year over year [8][20] - Adjusted EBITDA was $6.8 million, representing a 4.1% margin, which was a substantial beat versus expectations [9][23] - Gross profit for Q2 was $123 million, with a gross margin of 74.3%, an increase of 20 basis points year over year [21][22] - Operating expenses were $133 million, improved by 690 basis points year over year as a percentage of revenue [22][23] - The company ended the quarter with $109 million in cash and cash equivalents, and reduced total debt by $27 million [24][25] Business Line Data and Key Metrics Changes - Consignment revenue grew 14%, while direct revenue increased 23% compared to the previous year, representing 12% of total revenue [20][21] - The consignment gross margin was 89.3%, an improvement of 93 basis points year over year [21][22] - Direct gross margin was 16.2%, fluctuating based on the category mix of products sold [21] Market Data and Key Metrics Changes - The active buyer base increased by 6% on a trailing twelve-month basis, exceeding 1 million active buyers [20] - The company noted that 53% of its customers are millennials and Gen Z, indicating a strong generational appeal [7] Company Strategy and Development Direction - The company is focused on a growth playbook centered on sales, marketing, and stores, with a new sales team compensation plan emphasizing retail value [10] - The strategy includes leveraging AI for operational efficiency and enhancing customer engagement through innovative features [13][16] - The company is expanding its dropship initiative to include jewelry, aiming to partner with larger luxury good aggregators [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of the business, with expectations for continued growth in Q3 and Q4 [32][30] - The company raised its full-year guidance, expecting GMV in the range of $2.03 billion to $2.045 billion, and revenue between $667 million and $674 million [26][27] - Management highlighted the favorable cash dynamics of the business model, anticipating strong positive free cash flows in the second half of the year [25][29] Other Important Information - The company is actively addressing counterfeiting issues in luxury goods through collaboration with law enforcement and proprietary technology [14] - The introduction of the reconsigned program has strengthened supply and created a circular loop for luxury assets [11] Q&A Session Summary Question: Can you comment on the cadence seen over the past couple of months? - Management noted that momentum has kept pace in Q3, with double-digit new seller growth continuing [32] Question: How should we think about the take rate and gross margin going forward? - Management explained that the take rate is influenced by the average order value, which was up 8%, and that consignment gross margins remain strong [36][37] Question: Can you elaborate on the expansion to luxury vendors and international consignors? - Management indicated that the dropship channel is still in early stages but has potential for growth, especially with international partners [42] Question: What drove the increase in new consignors? - Management attributed the growth to marketing reinvestment and the effectiveness of the growth playbook, including the reconsign feature [51][52] Question: How is Athena impacting operational efficiency? - Management stated that Athena is currently processing 20% of items, with plans to increase to 30-40% by year-end, aiming to reduce costs per unit [55][88]

Core Insights - RealReal reported Q2 2025 earnings with GAAP revenue of $165 million, exceeding analyst expectations of $159.7 million, and showing a 14% year-over-year increase from $144.9 million in Q2 2024 [1][5] - Adjusted EPS (Non-GAAP) improved to $(0.06), better than the $(0.09) consensus estimate and the $(0.13) in Q2 2024, reflecting operational progress [1][2] - The company raised its full-year guidance, projecting GMV of $2.030–$2.045 billion and GAAP revenue of $667–$674 million, indicating strong momentum [11] Financial Performance - Q2 2025 GAAP revenue was $165 million, a 14% increase from Q2 2024's $144.9 million [2][5] - Non-GAAP EPS improved by 53.8% year-over-year from $(0.13) to $(0.06) [2] - Adjusted EBITDA reached $6.8 million, a significant turnaround from a loss of $(1.8) million in Q2 2024 [2][6] Operational Highlights - Active buyers increased by 6% year-over-year to 1,001,000, with total orders reaching 868,000 [2][5] - Gross margin improved to 74.3%, up 0.2 percentage points from Q2 2024, attributed to automation and AI tools [2][6] - Consignment revenue grew by 14% to $128.6 million, while direct revenue rose 23% to $20.5 million [5] Business Model and Strategy - RealReal operates an online marketplace for luxury goods, focusing on authentication to build trust and combat counterfeits [3][4] - The company's network effect encourages more consignors and buyers, creating a virtuous cycle [4] - Key initiatives like "Get Paid Now" and referral programs have contributed to supply growth and operational efficiency [7][8] Future Outlook - Management raised guidance for Q3 2025, projecting GMV between $495 and $502 million and adjusted EBITDA of $6.1–$7.1 million [11] - For the full fiscal year, the updated outlook calls for adjusted EBITDA of $29.0–$32.0 million, a significant increase from prior guidance [11] - Investors are advised to monitor cash flow trends, as free cash flow remained negative at $(15) million [12]

Financial Performance - GMV reached $504 million, a 14% year-over-year increase, driven by unit growth and higher value items[24] - Revenue increased by 14% year-over-year to $165 million, marking the highest quarterly revenue[29] - Adjusted EBITDA was $6.8 million, representing 4.1% of total revenue, an $8.6 million increase compared to the previous year[31] - Gross profit increased by 14% year-over-year to $123 million, resulting in a gross margin of 74.3%[34] Operational Efficiency and Growth - Active buyers expanded by 6% on a trailing 12-month basis, exceeding 1 million[26] - Consignment gross margin increased by 93 basis points year-over-year to 89.3%[20] - Total operating expenses improved by 690 basis points year-over-year[34] Future Outlook - The company raised its full year 2025 outlook, with GMV projected between $2.030 billion and $2.045 billion[20] - Full year 2025 revenue is projected between $667 million and $674 million[20] - Full year 2025 Adjusted EBITDA is projected between $29 million and $32 million[20] Technology and Innovation - AI-driven Athena intake is at approximately 20% of units, with a target of 30-40% by year-end[20]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's unaudited condensed financial statements and related disclosures for the reporting period [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed financial statements, including balance sheets, operations, equity, cash flows, and comprehensive notes [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :------------------ | | Cash and cash equivalents | $94,345 | $172,212 | | Total current assets | $160,333 | $232,669 | | Total assets | $349,383 | $423,095 | | Total current liabilities | $199,486 | $248,676 | | Convertible Senior Notes, net, current portion | $— | $26,653 | | Warrant liability | $31,544 | $78,584 | | Total liabilities | $687,627 | $830,471 | | Total stockholders' deficit | $(338,244) | $(407,376) | - Total assets decreased by **$73.7 million**, and total liabilities decreased by **$142.8 million** from December 31, 2024, to June 30, 2025[16](index=16&type=chunk) - Stockholders' deficit improved by **$69.1 million**, from **$(407.4) million** to **$(338.2) million**[16](index=16&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) Condensed Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $165,188 | $144,934 | $325,221 | $288,734 | | Gross profit | $122,676 | $107,466 | $242,699 | $214,745 | | Loss from operations | $(9,885) | $(18,797) | $(22,656) | $(36,739) | | Change in fair value of warrant liability | $4,537 | $5,630 | $47,040 | $(9,953) | | Gain on extinguishment of debt | $— | $— | $37,101 | $4,177 | | Net income (loss) attributable to common stockholders | $(11,366) | $(16,708) | $51,034 | $(47,809) | | Net income (loss) per share, diluted | $(0.13) | $(0.20) | $(0.27) | $(0.45) | - For the six months ended June 30, 2025, the company reported a net income of **$51.0 million**, a significant improvement from a net loss of **$(47.8) million** in the prior year, largely due to gains from changes in fair value of warrant liability and debt extinguishment[18](index=18&type=chunk) - Total revenue increased by **14.0%** for the three months and **12.6%** for the six months ended June 30, 2025, compared to the same periods in 2024[18](index=18&type=chunk) [Condensed Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Stockholders' Deficit Changes (In thousands, except share amounts) | Metric | December 31, 2024 | June 30, 2025 | | :------------------------------------------ | :------------------ | :------------ | | Total Stockholders’ Deficit | $(407,376) | $(338,244) | | Additional Paid-in Capital | $846,450 | $864,548 | | Accumulated Deficit | $(1,253,827) | $(1,202,793) | | Net income (loss) for the period | N/A | $(11,366) (Q2 2025) | | Stock-based compensation expense | N/A | $15,730 (YTD Q2 2025) | - The total stockholders' deficit decreased by **$69.1 million** from December 31, 2024, to June 30, 2025, primarily driven by a reduction in accumulated deficit[21](index=21&type=chunk) - Additional paid-in capital increased by **$18.1 million** during the six months ended June 30, 2025, reflecting stock-based compensation and stock issuances[21](index=21&type=chunk) [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Condensed Statements of Cash Flows Highlights (In thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) | $51,034 | $(47,809) | | Net cash used in operating activities | $(31,840) | $(10,221) | | Net cash used in investing activities | $(16,692) | $(10,280) | | Net cash used in financing activities | $(29,387) | $(4,465) | | Net decrease in cash, cash equivalents and restricted cash | $(77,919) | $(24,966) | | Cash, cash equivalents and restricted cash, End of period | $109,204 | $165,657 | - Net cash used in operating activities increased significantly to **$(31.8) million** for the six months ended June 30, 2025, from **$(10.2) million** in the prior year[27](index=27&type=chunk) - The company repaid **$26.7 million** of 2025 Notes during the six months ended June 30, 2025[27](index=27&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) - The company is an online marketplace for authenticated, consigned luxury goods, headquartered in San Francisco, California[32](index=32&type=chunk) - Significant accounting estimates include revenue recognition, inventory valuation, stock-based compensation, and fair value measurements of warrant and debt liabilities[36](index=36&type=chunk) - The 2025 Note Exchange resulted in a **$37.1 million** gain on debt extinguishment, and the 2024 Note Exchange resulted in a **$4.2 million** gain on debt extinguishment[81](index=81&type=chunk)[90](index=90&type=chunk) - Warrant liability decreased by **$47.04 million** for the six months ended June 30, 2025, contributing to a gain in earnings[77](index=77&type=chunk) - Total unrecognized stock-based compensation expense was **$43.3 million** as of June 30, 2025, expected to be recognized over approximately **2.1 years**[117](index=117&type=chunk) - A fire at the Secaucus authentication center in May 2024 resulted in a **$0.4 million** gain from insurance recoveries for the six months ended June 30, 2025, with ongoing discussions[133](index=133&type=chunk) - The company maintains a full valuation allowance of **$306.9 million** against its gross deferred tax assets of **$331.5 million**[143](index=143&type=chunk) - The company repaid the outstanding principal and accrued interest of the 2025 Notes, totaling **$27.2 million**, upon maturity on June 15, 2025[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating results, liquidity, capital resources, and critical accounting estimates [Overview](index=31&type=section&id=Overview) - The RealReal, Inc. is the world's largest online marketplace for authenticated resale luxury goods, offering an end-to-end service[148](index=148&type=chunk) - Revenue is primarily generated from consignment sales, direct sales of company-owned inventory, and shipping services[150](index=150&type=chunk)[152](index=152&type=chunk) - The overall take rate on consigned goods decreased to **37.9%** in Q2 2025 from **38.5%** in Q2 2024, due to a sales mix shift towards higher value items[152](index=152&type=chunk) [Factors Affecting Our Performance](index=32&type=section&id=Factors%20Affecting%20Our%20Performance) - Consignor growth and retention are crucial, with over **80%** of GMV from repeat consignors in Q2 2025 and Q2 2024[155](index=155&type=chunk) - Buyer growth and retention are key, with **15%** of buyers also consigning and **49%** of consignors also purchasing in the last twelve months as of June 30, 2025[157](index=157&type=chunk) - The company continues to invest in physical infrastructure, technology, and talent, including artificial intelligence capabilities, to scale operations and enhance efficiency[158](index=158&type=chunk) - The business experiences seasonality, with supply increasing in the third and fourth quarters and demand increasing in the fourth quarter, leading to stronger AOV and faster sell-through[159](index=159&type=chunk) [Key Financial and Operating Metrics](index=32&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Key Financial and Operating Metrics (In thousands, except AOV and percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GMV | $504,105 | $440,914 | $994,510 | $892,855 | | NMV | $379,377 | $329,422 | $750,134 | $664,237 | | Consignment revenue | $128,620 | $112,714 | $252,434 | $228,362 | | Direct revenue | $20,495 | $16,724 | $40,949 | $29,433 | | Shipping services revenue | $16,073 | $15,496 | $31,838 | $30,939 | | Number of orders | 868 | 820 | 1,737 | 1,660 | | Take rate | 37.9 % | 38.5 % | 38.2 % | 38.4 % | | Active buyers | 1,001 | 942 | 1,001 | 942 | | AOV | $581 | $538 | $573 | $538 | - GMV increased by **14.3%** for the three months and **11.4%** for the six months ended June 30, 2025, compared to the prior year periods[161](index=161&type=chunk) - Average Order Value (AOV) increased by **8%** for the three months and **6%** for the six months ended June 30, 2025, compared to the prior year periods[161](index=161&type=chunk)[190](index=190&type=chunk)[211](index=211&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted EBITDA is a key non-GAAP performance measure used to assess operating performance and evaluate business strategies, excluding items not indicative of core operations[173](index=173&type=chunk)[174](index=174&type=chunk) Adjusted EBITDA Reconciliation (In thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(11,366) | $(16,708) | $51,034 | $(47,809) | | EBITDA | $2,908 | $(4,940) | $78,724 | $(25,979) | | Adjusted EBITDA | $6,839 | $(1,761) | $10,949 | $(4,022) | - Adjusted EBITDA significantly improved, turning positive to **$6.8 million** for Q2 2025 and **$10.9 million** for YTD Q2 2025, compared to negative figures in the prior year periods[176](index=176&type=chunk) [Components of our Operating Results](index=36&type=section&id=Components%20of%20our%20Operating%20Results) - Revenue is comprised of consignment revenue (majority), direct revenue, and shipping services revenue[185](index=185&type=chunk) - Cost of revenue includes credit card fees, packaging, customer service, website hosting, and inventory adjustments for consignment and direct sales, plus shipping costs[181](index=181&type=chunk) - Marketing, operations and technology, and selling, general and administrative expenses are expected to decrease as a percentage of revenue over the longer term[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - Provision for income taxes primarily consists of state minimum taxes, with a full valuation allowance for net deferred tax assets[186](index=186&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Revenue and Gross Profit Trends (In thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $165,188 | $144,934 | $325,221 | $288,734 | | Total cost of revenue | $42,512 | $37,468 | $82,522 | $73,989 | | Gross profit | $122,676 | $107,466 | $242,699 | $214,745 | | Gross profit margin | 74.3% | 74.1% | 74.6% | 74.3% | - Total revenue increased by **14%** for Q2 2025 YoY and **12.6%** for YTD Q2 2025 YoY, driven by growth across all revenue streams[188](index=188&type=chunk) - Net income (loss) improved significantly, shifting from a loss of **$(47.8) million** in YTD Q2 2024 to a net income of **$51.0 million** in YTD Q2 2025, primarily due to gains on warrant liability and debt extinguishment[188](index=188&type=chunk) [Comparison of the Three Months Ended June 30, 2025 and 2024](index=40&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) Q2 2025 vs. Q2 2024 Revenue and Expense Changes (In thousands, except percentages) | Metric | 2025 Amount | 2024 Amount | Change ($) | Change (%) | | :------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Consignment revenue | $128,620 | $112,714 | $15,906 | 14 % | | Direct revenue | $20,495 | $16,724 | $3,771 | 23 % | | Shipping services revenue | $16,073 | $15,496 | $577 | 4 % | | Cost of consignment revenue | $13,761 | $13,108 | $653 | 5 % | | Cost of direct revenue | $17,185 | $13,760 | $3,425 | 25 % | | Cost of shipping services revenue | $11,566 | $10,600 | $966 | 9 % | | Marketing expense | $15,548 | $13,759 | $1,789 | 13 % | | Operations and technology expense | $68,986 | $65,422 | $3,564 | 5 % | | Selling, general and administrative expense | $48,027 | $47,082 | $945 | 2 % | | Change in fair value of warrant liability | $4,537 | $5,630 | $(1,093) | (19)% | | Interest income | $1,109 | $2,263 | $(1,154) | (51)% | | Interest expense | $(7,038) | $(5,769) | $(1,269) | 22 % | - Consignment revenue growth was driven by an **8%** increase in AOV and a **6%** increase in the number of orders, despite a slight decrease in take rate to **37.9%**[190](index=190&type=chunk) - Operations and technology expense decreased as a percentage of revenue from **45%** to **42%**, and selling, general and administrative expense decreased from **32%** to **29%**[204](index=204&type=chunk)[206](index=206&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=43&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) YTD Q2 2025 vs. YTD Q2 2024 Revenue and Expense Changes (In thousands, except percentages) | Metric | 2025 Amount | 2024 Amount | Change ($) | Change (%) | | :------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Consignment revenue | $252,434 | $228,362 | $24,072 | 11 % | | Direct revenue | $40,949 | $29,433 | $11,516 | 39 % | | Shipping services revenue | $31,838 | $30,939 | $899 | 3 % | | Cost of consignment revenue | $26,715 | $26,388 | $327 | 1 % | | Cost of direct revenue | $32,420 | $26,045 | $6,375 | 24 % | | Cost of shipping services revenue | $23,387 | $21,556 | $1,831 | 8 % | | Marketing expense | $31,403 | $29,042 | $2,361 | 8 % | | Operations and technology expense | $135,964 | $128,394 | $7,570 | 6 % | | Selling, general and administrative expense | $97,988 | $93,852 | $4,136 | 4 % | | Restructuring charges | $— | $196 | $(196) | (100)% | | Change in fair value of warrant liability | $47,040 | $(9,953) | $56,993 | 100 % | | Gain on extinguishment of debt | $37,101 | $4,177 | $32,924 | 100 % | | Interest income | $2,483 | $4,332 | $(1,849) | (43)% | | Interest expense | $(13,358) | $(9,520) | $(3,838) | 40 % | - Direct revenue increased by **39%** due to higher sell-through of inventory from out-of-policy returns and the Get Paid Now program[213](index=213&type=chunk) - A significant gain of **$47.0 million** from the change in fair value of warrant liability and a **$37.1 million** gain on debt extinguishment contributed to the improved net income[231](index=231&type=chunk)[232](index=232&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents were **$94.3 million** as of June 30, 2025, with an accumulated deficit of **$1,202.8 million**[235](index=235&type=chunk) - The company repaid **$27.2 million** for the 2025 Notes upon maturity in June 2025[236](index=236&type=chunk) - Debt exchanges in 2024 and 2025 (2024 Note Exchange and 2025 Note Exchange) extended maturities and reduced principal debt by **$17.2 million** and **$36.7 million**, respectively[235](index=235&type=chunk)[236](index=236&type=chunk) - Net cash used in operating activities increased to **$(31.8) million** for the six months ended June 30, 2025, from **$(10.2) million** in the prior year[240](index=240&type=chunk) - Existing cash and cash equivalents are expected to be sufficient to meet working capital and capital expenditures needs for at least the next 12 months[237](index=237&type=chunk) [Contractual Obligations and Commitments](index=49&type=section&id=Contractual%20Obligations%20and%20Commitments) - Total commitments and obligations for the 2028 Notes decreased by **$189.8 million** due to the 2025 Note Exchange[258](index=258&type=chunk) - Cash requirements related to the 2031 Notes are **$181.9 million**, with **$5.9 million** expected to be paid within the next 12 months[258](index=258&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=Critical%20Accounting%20Estimates) - The **$37.1 million** gain on debt extinguishment from the 2025 Note Exchange is considered a critical estimate due to the judgment involved in valuing the 2031 Notes and assessing the applicable interest rate[256](index=256&type=chunk) [Recent Accounting Pronouncements](index=49&type=section&id=Recent%20Accounting%20Pronouncements) - There have been no new developments to recently issued accounting standards from those disclosed in the 2024 Annual Report on Form 10-K[257](index=257&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks, primarily interest rate fluctuations on cash, with limited material impact due to short-term holdings - Unrestricted cash and cash equivalents totaled **$94.3 million** as of June 30, 2025[258](index=258&type=chunk) - A hypothetical 10% change in interest rates is not expected to materially impact the company's financial condition or results of operations due to the short-term nature of its cash equivalents[258](index=258&type=chunk) - The company's costs are subject to inflationary pressures, which could adversely affect its business if not offset[259](index=259&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025[260](index=260&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control over financial reporting during the period[261](index=261&type=chunk) - Management acknowledges the inherent limitations of control systems, which provide reasonable, not absolute, assurance against errors and fraud[262](index=262&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional information including legal proceedings, risk factors, equity sales, and corporate governance updates [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing legal proceedings, including a trademark lawsuit and a shareholder class action, with uncertain outcomes - Ongoing lawsuit with Chanel, Inc. alleging trademark infringement, unfair competition, and false advertising; settlement discussions are ongoing, with a stay concluding on August 22, 2025[265](index=265&type=chunk) - A shareholder class action lawsuit saw a tentative ruling on July 14, 2025, denying class certification for the opt-out plaintiff in Marin County Superior Court[266](index=266&type=chunk) - The company cannot predict or reasonably estimate the ultimate outcome or loss for the ongoing litigations, which could materially affect its financial position or results of operations[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks to business, financial condition, and operating results, including losses, revenue growth, competition, authentication, data security, and debt - The company has a history of losses and may not achieve or maintain profitability in the future, with an accumulated deficit of **$1,202.8 million** as of June 30, 2025[280](index=280&type=chunk) - Revenue growth rates may decline due to factors such as inability to attract and retain consignors, general economic conditions, and increased competition[281](index=281&type=chunk) - The business is highly dependent on consumer discretionary spending and is vulnerable to economic downturns, inflation, and geopolitical instability[302](index=302&type=chunk) - The accuracy and reliability of authentication processes are critical; any failure or perceived failure could damage the company's reputation and revenue[305](index=305&type=chunk) - Risks related to data security breaches, fraud, and reliance on third-party hosts and payment processors could lead to unexpected expenses, operational disruptions, and reputational harm[321](index=321&type=chunk)[323](index=323&type=chunk) - Significant debt (**$97.7 million** 2028 Notes, **$140.8 million** 2029 Notes, **$146.7 million** 2031 Notes) and warrants (**7.9 million shares**) pose financial risks, including potential dilution, liquidity concerns, and restrictive covenants[359](index=359&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk) - The accounting methods for warrants and convertible notes materially affect reported financial results due to fair value remeasurements and diluted EPS calculations[367](index=367&type=chunk)[368](index=368&type=chunk) [Risks Relating to Our Business and Industry](index=55&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Industry) - The company has a history of losses and may not achieve or maintain profitability, with an accumulated deficit of **$1,202.8 million** as of June 30, 2025[280](index=280&type=chunk) - Revenue growth rates may decline due to factors such as inability to attract and retain consignors, general economic conditions, and increased market competition[281](index=281&type=chunk) - The business experiences seasonal and quarterly variations, with a disproportionate amount of revenue and earnings typically realized in the fourth quarter[283](index=283&type=chunk) - Greater than expected product returns could exceed reserves, adversely affecting revenue and operating results[284](index=284&type=chunk) - The company may require additional capital for growth, which could result in significant dilution to existing stockholders or restrictive debt covenants[285](index=285&type=chunk) [Risks Relating to Our Strategy](index=56&type=section&id=Risks%20Relating%20to%20Our%20Strategy) - The company may be unable to successfully execute its retail growth strategy, facing challenges in locating suitable retail space, hiring talent, and managing operational costs[289](index=289&type=chunk) - International expansion would require significant management attention and resources, subjecting the company to new risks related to local cultures, laws, and regulations[291](index=291&type=chunk) - Growth strategies, including initiatives to pursue new revenue streams like third-party advertising, may not be successfully implemented or generate sustainable revenue and profit[292](index=292&type=chunk) [Risks Relating to Supply](index=57&type=section&id=Risks%20Relating%20to%20Supply) - The company's success depends on its ability to obtain sufficient new and recurring supply of pre-owned luxury goods by attracting and retaining consignors cost-effectively[293](index=293&type=chunk) - Challenges include attracting and retaining talented sales professionals, which is critical for driving the supply of luxury goods[294](index=294&type=chunk) - Maintaining brand partnerships is essential for enhancing product offerings and increasing supply, requiring trust in authentication and customer service[296](index=296&type=chunk) [Risks Relating to Demand](index=58&type=section&id=Risks%20Relating%20to%20Demand) - Continued growth depends on attracting new and retaining repeat buyers, which requires appealing to diverse customer segments and cost-effective marketing[297](index=297&type=chunk) - Promotional pricing by national retailers and brands on new luxury goods could adversely affect the company's value proposition to consignors and buyers[298](index=298&type=chunk) - The company must successfully gauge and respond to changing preferences among consignors and buyers, which is challenging given its unique, single-SKU inventory[299](index=299&type=chunk) - Reliance on consumer discretionary spending makes the business vulnerable to economic downturns, inflation, and geopolitical instability, potentially leading to decreased sales and AOV[302](index=302&type=chunk) - The industry is highly competitive, with many competitors possessing greater resources, which could force the company to decrease take rates and negatively impact financial performance[304](index=304&type=chunk) [Risks Related to Marketing and Brand Management](index=59&type=section&id=Risks%20Related%20to%20Marketing%20and%20Brand%20Management) - The company's success depends on the accuracy and reliability of its authentication processes; any failure or perceived failure could damage its reputation and impact revenue[305](index=305&type=chunk) - Promoting and sustaining The RealReal brand is critical, requiring consistent luxury service and trust from consignors, buyers, and brand partners[307](index=307&type=chunk) - Marketing and advertising activities may fail to efficiently drive growth in consignors and buyers, potentially increasing expenses without proportional sales increases[308](index=308&type=chunk) - Reliance on third parties for website traffic, such as search engines and mobile app stores, exposes the company to risks from algorithm changes or increased competition for advertisements[309](index=309&type=chunk) - Public disclosure of Environmental, Social and Governance (ESG) metrics and goals may subject the company to increased scrutiny, compliance costs, and reputational risks if goals are not met or methodologies change[311](index=311&type=chunk)[312](index=312&type=chunk) [Risks Related to Our Merchandising and Fulfillment](index=61&type=section&id=Risks%20Related%20to%20Our%20Merchandising%20and%20Fulfillment) - The company may be unable to attract, train, and retain specialized personnel and skilled employees required for its complex merchandising and fulfillment operations[313](index=313&type=chunk) - Challenges in identifying and leasing suitable authentication centers in appropriate geographic regions could adversely affect business growth and operating results[314](index=314&type=chunk) - Damage or destruction to authentication centers or retail stores, such as the May 2024 warehouse fire, could result in significant liabilities, business disruption, and costs exceeding insurance coverage[315](index=315&type=chunk)[316](index=316&type=chunk) - Shipping is a critical part of the business; changes in arrangements, costs, interruptions, or damage to products in transit could adversely affect operating results and customer satisfaction[317](index=317&type=chunk) - Failure to successfully leverage technology, including artificial intelligence and machine learning, to automate and drive efficiencies in operations could harm the business due to flaws, failures, or unforeseen third-party use[318](index=318&type=chunk) [Risks Related to Data Security, Privacy and Fraud](index=62&type=section&id=Risks%20Related%20to%20Data%20Security,%20Privacy%20and%20Fraud) - Reliance on third-party hosts for the website and mobile app, and third-party payment processors, makes the company vulnerable to service interruptions, errors, or outages[319](index=319&type=chunk)[320](index=320&type=chunk) - Failure of data or cyber security could lead to unexpected expenses, compromise data assets, disrupt operations, damage reputation, and result in litigation or regulatory action[321](index=321&type=chunk)[322](index=322&type=chunk) - The company may incur significant losses from various types of fraudulent transactions, including stolen or counterfeit goods and unauthorized credit card use, which could damage its reputation and lead to litigation[323](index=323&type=chunk)[324](index=324&type=chunk) [Risks Relating to Our Leadership and Employees](index=63&type=section&id=Risks%20Relating%20to%20Our%20Leadership%20and%20Employees) - The company's success depends on its ability to attract and retain key personnel on its executive team and effectively manage leadership succession, as departures could adversely affect the business[326](index=326&type=chunk) - Labor-related matters, including potential unionization or disputes, could disrupt operations, cause delays, and increase labor costs, materially affecting the business[327](index=327&type=chunk) [Risks Relating to Our Intellectual Property](index=64&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) - The company relies on intellectual property rights (copyright, trade secret, trademark) to protect its brand, proprietary information, technologies, and processes; failure to do so could harm its competitive position[328](index=328&type=chunk) - Disputes over the fair use doctrine, particularly regarding referencing third-party trademarks, could lead to litigation and adversely affect the business[329](index=329&type=chunk) [Risks Relating to Litigation and Regulatory Uncertainty](index=64&type=section&id=Risks%20Relating%20to%20Litigation%20and%20Regulatory%20Uncertainty) - The company is currently involved in lawsuits, including a trademark dispute with Chanel and a shareholder class action, with uncertain outcomes that could impose significant costs and adversely affect the business[329](index=329&type=chunk)[330](index=330&type=chunk)[332](index=332&type=chunk) - Use and processing of personal information are subject to evolving privacy and data protection laws (e.g., CCPA, GDPR), increasing compliance obligations, potential penalties, and requiring significant changes to business practices[333](index=333&type=chunk)[334](index=334&type=chunk) - Restrictions on 'cookie' tracking technologies or changes in technology could decrease internet user information, harming marketing effectiveness and operating results[339](index=339&type=chunk) - Application of existing tax laws is subject to interpretation, potentially leading to additional tax liabilities, interest, and penalties, and new tax laws could increase obligations[346](index=346&type=chunk)[347](index=347&type=chunk) - Failure to comply with applicable laws and regulations (e.g., product safety, secondhand goods) may subject the company to fines, penalties, loss of licensure, or facility closures[342](index=342&type=chunk)[343](index=343&type=chunk) - The company's ability to use its net operating loss carryforwards (NOLs) and other tax attributes may be limited by ownership changes under Sections 382 and 383 of the Code and the Tax Cuts and Jobs Act[348](index=348&type=chunk) [Risks Related to Ownership of Our Common Stock](index=68&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) - The market price of the common stock may be volatile or decline steeply regardless of operating performance, influenced by economic conditions, analyst expectations, and stock sales[351](index=351&type=chunk)[352](index=352&type=chunk) - Short sellers may manipulate and drive down the market price of the common stock, particularly for securities with limited trading volumes or high volatility[353](index=353&type=chunk)[355](index=355&type=chunk) - Delaware law and provisions in the company's certificate of incorporation and bylaws could make a merger, tender offer, or proxy contest difficult, potentially depressing the trading price of common stock[356](index=356&type=chunk)[357](index=357&type=chunk) [Risks Related to Our Outstanding Notes and Warrants](index=69&type=section&id=Risks%20Related%20to%20Our%20Outstanding%20Notes%20and%20Warrants) - The company has incurred a significant amount of debt (**$97.7 million** 2028 Notes, **$140.8 million** 2029 Notes, **$146.7 million** 2031 Notes) and may incur additional indebtedness, which could strain cash flows and limit financing options[359](index=359&type=chunk) - Indentures governing the 2029 Notes contain restrictive covenants (e.g., liquidity not less than **$25 million**) and events of default, which could hinder strategy execution or materially affect financial position[362](index=362&type=chunk)[363](index=363&type=chunk) - Transactions relating to Convertible Senior Notes or Warrants may dilute the ownership interest of stockholders upon conversion or exercise[364](index=364&type=chunk) - The conditional conversion of Convertible Senior Notes or cash settlement of Warrants, if triggered, could adversely affect liquidity and net working capital[365](index=365&type=chunk) - The accounting method for Warrants (as liabilities at fair value) and Convertible Senior Notes (as a single liability post-ASU 2020-06) materially affects reported financial results due to fair value remeasurements and diluted EPS calculations[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred in Q2 2025, and IPO proceeds information is unchanged - No unregistered sales of equity securities occurred during the second quarter of 2025[371](index=371&type=chunk) - Information regarding the use of proceeds from the initial public offering has not changed since the last periodic report[372](index=372&type=chunk) [Item 3. Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable - This item is not applicable[373](index=373&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - This item is not applicable[374](index=374&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) Reports on recent corporate governance and personnel changes, including a new board member and interim Chief People Officer - Mark McCaffrey was appointed to the Board of Directors as a Class I Director, effective August 5, 2025, with an annual cash retainer of **$35,000** and an annual equity award of **$165,000** in restricted stock units[375](index=375&type=chunk)[377](index=377&type=chunk) - Chatelle Lynch, Chief People Officer, departed effective August 15, 2025, with her separation treated as an involuntary termination without cause, entitling her to severance benefits[379](index=379&type=chunk)[380](index=380&type=chunk) - Todd Suko was appointed Interim Chief People Officer, effective August 15, 2025, in addition to his Chief Legal Officer and Secretary roles, and will receive an additional stipend of **$10,000** per month[379](index=379&type=chunk)[382](index=382&type=chunk) - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the fiscal quarter ended June 30, 2025[384](index=384&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the Form 10-Q, including agreements, certifications, and XBRL documents - The exhibits include the Separation Agreement with Chatelle Lynch (10.1), Letter Agreement with Todd Suko (10.2), certifications from principal executive and financial officers (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents[386](index=386&type=chunk) [Signatures](index=75&type=section&id=Signatures) The Form 10-Q was signed on August 7, 2025, by the Chief Executive Officer and Chief Financial Officer - The report was signed by Rati Sahi Levesque, Chief Executive Officer, and Ajay Madan Gopal, Chief Financial Officer, on August 7, 2025[390](index=390&type=chunk)

Exhibit 99.1 We have not reconciled forward-looking Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, because we cannot predict with reasonable certainty the ultimate outcome of certain components of 1 • GMV was $504 million, an increase of 14% compared to the same period in 2024 • Total Revenue was $165 million, an increase of 14% compared to the same period in 2024 • Gross Profit was $123 million, an increase of $15 million compared to the same period in 2024 • Gross Margin ...

(all amounts are expressed in millions of U.S. dollars, excluding per share amounts and unless otherwise stated) TORONTO, July 31, 2025 (GLOBE NEWSWIRE) -- Real Matters Inc. (TSX: REAL) (“Real Matters” or the “Company”), a leading network management services platform for the mortgage and insurance industries, today announced its financial results for the third quarter ended June 30, 2025. “Consolidated revenues increased 22% sequentially in the third quarter to $45.4 million, in line with a seasonal uptick ...

Company Overview - The RealReal (REAL) shares increased by 8.8% to close at $6.43, with trading volume significantly higher than usual, and a total gain of 20.6% over the past four weeks [1] - The company operates at the intersection of luxury and value, supported by a domestic sourcing model, which may provide resilience [2] Financial Performance - The RealReal is projected to report a quarterly loss of $0.15 per share, reflecting a year-over-year decline of 15.4%, while revenues are expected to reach $160.17 million, an increase of 10.5% from the previous year [3] - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] Industry Context - The RealReal is part of the Zacks Consumer Products - Discretionary industry, where Reynolds Consumer Products (REYN) also operates, with REYN's stock rising 2.6% to $22.11 [4] - Reynolds Consumer Products has a consensus EPS estimate of $0.37, which is a decrease of 19.6% from the previous year, and it also holds a Zacks Rank of 3 (Hold) [5]

Core Insights - The RealReal will release its financial results for Q2 2025 on August 7, 2025, after market close [1] - A conference call to discuss the financial results will take place at 2:00 p.m. Pacific Time [1] Company Overview - The RealReal is the largest online marketplace for authenticated resale luxury goods, boasting over 40 million members [2] - The company employs a rigorous authentication process with hundreds of in-house experts, including gemologists and brand authenticators [2] - The RealReal supports the circular economy by giving new life to luxury items across various categories, including fashion, jewelry, art, and home [2] - The company offers services such as free virtual appointments, in-home pickup, and direct shipping to facilitate the selling process for consignors [2]

Core Viewpoint - Real Matters Inc. will announce its third quarter fiscal 2025 financial results on July 31, 2025, before market open [1] Group 1: Company Overview - Real Matters is a leading network management services provider for the mortgage lending and insurance industries [3] - The company combines proprietary technology and network management capabilities with a large pool of independent qualified field professionals [3] - Real Matters serves top 100 mortgage lenders in the U.S. and major banks and insurance companies in Canada [3] - The company is a leading independent provider of residential real estate appraisals and title and mortgage closing services in the U.S. [3] - Real Matters is headquartered in Markham, Ontario, with principal offices in Buffalo, New York, and Middletown, Rhode Island [3] - The company is listed on the Toronto Stock Exchange under the symbol REAL [3] Group 2: Conference Call Details - A conference call to review the financial results will occur at 10:00 a.m. (ET) on July 31, 2025, hosted by the CEO and CFO [2] - An accompanying slide presentation will be available on the Investor Relations section of the company's website before the call [2] - Participants must pre-register to join the conference call, with registration details provided [4]