RENT reported an earnings per share of $13.65, significantly outperforming expectations.The company saw a 15.4% rise in revenue, reaching $87.6 million.Despite a low P/E ratio, RENT's stock appears undervalued, with a price-to-earnings (P/E) ratio of 3.50.Rent the Runway, Inc. (NASDAQ:RENT) is a fashion company that offers clothing and accessory rentals. It aims to transform how women dress by providing access to designer fashion without the need to purchase. The company competes with other fashion rental s ...

Core Viewpoint - Rent the Runway is conducting its Third Quarter 2025 Earnings Call, focusing on financial performance and future guidance Group 1: Earnings Presentation - The earnings presentation for Q3 2025 is available on the Investor Relations website [2] - The call will reference forward-looking statements regarding guidance for Q4 and fiscal year 2025, as well as recapitalization transactions and business initiatives [3] Group 2: Risks and Assumptions - Various risks, uncertainties, and assumptions could lead to actual results differing materially from the forward-looking statements [3] - Detailed risks and uncertainties are outlined in the press release and SEC filings, including the upcoming Form 10-Q [4] Group 3: Financial Information - The call will include references to non-GAAP financial information, which should not be considered in isolation from GAAP financial information [4][5] - Reconciliations of GAAP to non-GAAP measures are available in the press release and on the Investor Relations website [5]

Financial Data and Key Metrics Changes - Total debt reduced from approximately $319 million to approximately $120 million, with maturity extended to 2029 [4] - Revenue for Q3 2025 was $87.6 million, up 15.4% year-over-year, and up 8.3% quarter-over-quarter [19] - Adjusted EBITDA for Q3 2025 was $4.3 million or 4.9% of revenue, down from $9.3 million or 12.3% of revenue in Q3 2024 [22] - Free cash flow for Q3 2025 was -$13.6 million, compared to -$3.4 million in Q3 2024 [22] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue increased by $10.7 million or 16.1% year-over-year in Q3 2025, primarily due to higher average subscribers and average revenue per subscriber [19] - Inventory-related cancellations decreased by nearly 30% year-over-year in Q3 [6] - Revenue per subscriber increased, driven by a price increase and changes to late fee policies [8] Market Data and Key Metrics Changes - Ending active subscribers grew by 12.4% year-over-year, reaching 148,916 [18] - Average active subscribers during Q3 were 147,645, an increase of 12.9% year-over-year [18] - Customer engagement metrics, including Net Promoter Score, visits, and hearts, all showed significant improvement [6][7] Company Strategy and Development Direction - Focus on strategic recapitalization to strengthen the balance sheet and return to growth through inventory strategy and product innovation [4] - Emphasis on improving customer acquisition through organic community-driven channels and enhancing customer experience [12] - Plans to activate community engagement and leverage customer advocacy for growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved growth momentum and customer engagement [24] - Anticipated continued strong revenue growth in Q4, with guidance for revenue between $85 million and $87 million [23] - Management highlighted the importance of inventory investment for driving customer satisfaction and growth [17] Other Important Information - The company has nearly doubled its units of inventory purchased this fiscal year, impacting gross margins [17] - The completion of recapitalization transactions provides additional financial flexibility and support for growth plans [18] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Financial Data and Key Metrics Changes - Total debt reduced from approximately $319 million to approximately $120 million, with maturity extended to 2029 [4] - Revenue for Q3 2025 was $87.6 million, up 15.4% year-over-year, and up 8.3% quarter-over-quarter [19] - Adjusted EBITDA for Q3 2025 was $4.3 million or 4.9% of revenue, down from $9.3 million or 12.3% of revenue in Q3 2024 [22] - Free cash flow for Q3 2025 was negative $13.6 million, compared to negative $3.4 million in Q3 2024 [22] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue increased by $10.7 million or 16.1% year-over-year in Q3 2025, driven by higher average subscribers and average revenue per subscriber [19] - Inventory-related cancellations decreased by nearly 30% year-over-year in Q3 [5] - Revenue per subscriber increased, primarily due to a price increase and changes to late fee policies [8] Market Data and Key Metrics Changes - Ending active subscribers grew by 12.4% year-over-year, reaching 148,916 [18] - Average active subscribers during Q3 were 147,645, an increase of 12.9% year-over-year [18] - Customer engagement metrics such as net promoter score and app visits increased significantly, with average visits per subscriber up 34% year-over-year [6][7] Company Strategy and Development Direction - Focus on strategic recapitalization to strengthen the balance sheet and return to growth through inventory strategy and product innovation [4] - Emphasis on improving customer acquisition through organic community-driven channels and enhancing customer experience [12] - Plans to activate community engagement and leverage customer advocacy for growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved growth momentum and customer engagement [24] - Anticipated continued strong revenue growth in Q4 2025, with guidance for revenue between $323.1 million and $325.1 million for fiscal year 2025 [23] - Management acknowledged challenges with cash consumption due to inventory investments but expects improved cash flow generation over time [17] Other Important Information - The company has made significant changes to its app to enhance customer experience, resulting in increased engagement [9] - The introduction of community-driven content and ambassador programs has generated substantial impressions and referrals [13] Q&A Session Summary Question: What are the expectations for revenue growth in Q4? - Management expects revenue to be between $85 million and $87 million for Q4 2025 [23] Question: How is the company managing cash flow amid increased inventory investments? - Management noted that cash consumption has increased due to inventory investments but expects improved cash flow generation in the future [17]

Financial Data and Key Metrics Changes - Total debt reduced from approximately $319 million to approximately $120 million, with maturity extended to 2029 [4] - Revenue for Q3 2025 was $87.6 million, up 15.4% year-over-year, and up 8.3% quarter-over-quarter [17] - Adjusted EBITDA for Q3 2025 was $4.3 million, or 4.9% of revenue, down from $9.3 million, or 12.3% of revenue in Q3 2024 [20] - Free cash flow for Q3 2025 was negative $13.6 million, compared to negative $3.4 million in Q3 2024 [20] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue increased by $10.7 million, or 16.1% year-over-year, primarily due to higher average subscribers and average revenue per subscriber [17] - Active subscribers grew by 12% year-over-year, with ending active subscribers at 148,916 [5][16] - Revenue per subscriber increased, driven by a price increase and changes to late fee policies [7] Market Data and Key Metrics Changes - Inventory-related cancellations decreased by over 20% year-over-year, with a nearly 30% reduction in Q3 [6] - Customer engagement metrics, including net promoter score and app visits, showed significant improvement, with visits up 34% year-over-year [6] Company Strategy and Development Direction - Focus on strategic recapitalization to strengthen the balance sheet and return to growth through inventory strategy and product innovation [4] - Shift towards organic community-driven marketing channels to enhance customer acquisition [10][11] - Emphasis on improving customer experience through personalized app features and better onboarding processes [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum, expecting continued strong revenue growth in Q4 2025 [14][22] - The company aims to manage investments prudently to sustain growth and improve customer satisfaction [22] - Management highlighted the importance of community advocacy and customer experience in driving future growth [11][12] Other Important Information - The company has nearly doubled its inventory purchases this fiscal year, impacting gross margins, which were 29.6% in Q3 2025 compared to 34.7% in Q3 2024 [15][18] - The Muse Program generated 10 million impressions in Q3, showcasing the product in real life [12] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Financial Performance - Revenue for the third quarter of fiscal year 2025 was $87.6 million, representing a 15.4% year-over-year growth[154] - Net Income for the third quarter was $76.5 million, compared to a loss of $(18.9) million in the same period last year, resulting in a net income margin of 87.3%[154] - Total revenue, net for the three months ended October 31, 2025, was $87.6 million, an increase of $11.7 million, or 15.4%, compared to $75.9 million for the same period in 2024[203] - Subscription and Reserve rental revenue was $77.0 million for the three months ended October 31, 2025, an increase of $10.7 million, or 16.1%, compared to $66.3 million for the same period in 2024[204] - Net income for the three months ended October 31, 2025, was $76.5 million, compared to a net loss of $18.9 million for the same period in 2024[202] - Total revenue, net for the nine months ended October 31, 2025, was $238.1 million, an increase of $8.3 million, or 3.6%, compared to $229.8 million for the same period in 2024[224] - Subscription and Reserve rental revenue was $208.2 million for the nine months ended October 31, 2025, an increase of $7.3 million, or 3.6%, compared to $200.9 million for the same period in 2024[225] Subscriber Metrics - Active Subscribers increased to 148,916, a 12.4% year-over-year increase, while Total Subscribers reached 185,166, up 6.1% year-over-year[154] - Active Subscribers increased to 148,916 as of October 31, 2025, up from 132,518 a year earlier, driven by higher promotional activity and improved retention[179] - Average Active Subscribers rose to 147,645 for the three months ended October 31, 2025, compared to 130,796 for the same period in 2024[180] Profitability and Margins - Gross Profit for the third quarter was $25.9 million, with a gross margin of 29.6%, down from 34.7% in the prior year[154] - Gross Profit for the three months ended October 31, 2025, was $25.9 million, down from $26.3 million in 2024, with Gross Margins decreasing from 34.7% to 29.6%[183] - Adjusted EBITDA was $4.3 million for the three months ended October 31, 2025, down from $9.3 million in 2024, with margins decreasing from 12.3% to 4.9%[186] - Net income was $76.5 million for the three months ended October 31, 2025, compared to a net loss of $(18.9) million for the same period in 2024[245] Expenses and Costs - Total costs and expenses were $103.8 million for the three months ended October 31, 2025, an increase of $14.2 million, or 15.8%, compared to $89.6 million for the same period in 2024[206] - Fulfillment expenses were $24.0 million for the three months ended October 31, 2025, an increase of $2.6 million, or 12.1%, representing 27.4% of revenue[207] - Technology expenses were $10.5 million for the three months ended October 31, 2025, an increase of $1.8 million, or 20.7%, compared to $8.7 million for the same period in 2024[209] - General and administrative expenses were $22.7 million for the three months ended October 31, 2025, an increase of $1.5 million, or 7.1%, compared to $21.2 million for the same period in 2024[213] - Rental product depreciation and revenue share was $37.7 million for the three months ended October 31, 2025, an increase of $9.5 million, or 33.7%, compared to $28.2 million for the same period in 2024[215] Cash Flow and Debt - Cash and Cash Equivalents as of October 31, 2025, were $50.7 million, down from $74.1 million in the previous year[154] - Cash flows from operations for the nine months ended October 31, 2025, were $(3.6) million, compared to $11.5 million for the same period in 2024[257] - The company had total debt outstanding of approximately $159.1 million as of October 31, 2025, with no maturities within the next 12 months[263] - The company completed recapitalization transactions on October 28, 2025, reducing existing indebtedness by exchanging $100 million for new term loans and issuing 26,175,193 shares of Class A Common Stock[252] Strategic Plans and Market Conditions - The company plans to nearly double the new inventory added to its site in fiscal year 2025, driving substantial growth[151] - The company expects to incur higher purchases of rental products in fiscal year 2025 compared to fiscal year 2024 due to increased inventory[156] - The company faces significant macroeconomic uncertainties, including inflation and supply chain issues, which may impact consumer spending and operational costs[172] - The company plans to invest in customer experience and optimize shipping methods to drive growth and efficiencies despite rising costs[174] - Fulfillment expenses are expected to fluctuate due to competitive labor market pressures, with a focus on automation to improve operational efficiency[191] Other Financial Metrics - Gain on Debt Restructuring was $96.3 million for the three months ended October 31, 2025, recognized from the troubled debt restructuring completed in October 2025[221] - Gain on Debt Restructuring was $96.3 million for the nine months ended October 31, 2025, recognized from the troubled debt restructuring completed in October 2025[239] - The company reported net income from operations of $76.5 million for the three months ended October 31, 2025, primarily due to a Gain on Debt Restructuring of $96.3 million[250] - The 2023 Amended Temasek Facility eliminated all interest payments for six fiscal quarters and reduced the minimum liquidity maintenance covenant from $50 million to $30 million[251] - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to adopt new accounting guidance in line with private companies[268] - There were no material changes to the company's quantitative and qualitative disclosures about market risk in the three months ended October 31, 2025, compared to the 2024 Annual Report[269]

Forward-Looking Statements Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements herein that do not relate to matters of historical fact should be considered forward-looking statements. These statements include, but are not limited to, statements regarding Rent the Runway, Inc.'s (the "Company," "our" or "we") guidance and underlying assumptions for fiscal year 2025 and the anticipated benefits of the recap ...

Subscriber Growth - Active subscribers increased by 12.4% year-over-year, reaching 148,916 at the end of Q3 2025[6] - Average active subscribers rose by 12.9% year-over-year, totaling 147,645[7] - The company anticipates double-digit growth in ending active subscribers for fiscal year 2025 compared to fiscal year 2024[10] Revenue Performance - Revenue for Q3 2025 was $87.6 million, a 15.4% increase from $75.9 million in Q3 2024[7] - Total revenue for the three months ended October 31, 2025, was $87.6 million, a 15.5% increase from $75.9 million in the same period of 2024[28] - Subscription and Reserve rental revenue increased to $77.0 million, up 16.8% from $66.3 million year-over-year[28] - For Q4 2025, the company expects revenue between $85 million and $87 million[10] Net Income and Gains - Net income for Q3 2025 included a one-time gain of $96.3 million from debt restructuring[7] - Net income for the nine months ended October 31, 2025, was $24.0 million, compared to a net loss of $56.5 million in the same period of 2024[30] - Net income for the three months ended October 31, 2025, was $76.5 million, compared to a loss of $18.9 million in the same period of 2024[34] - The company reported a gain on debt restructuring of $96.3 million for the three months ended October 31, 2025[28] Costs and Expenses - The company incurred total costs and expenses of $103.8 million for the three months ended October 31, 2025, compared to $89.6 million in the same period of 2024[28] - The company incurred $2.8 million in non-ordinary course legal fees related to securities lawsuits for the three months ended October 31, 2025[34] Profitability Metrics - Gross profit was $25.9 million, with a gross margin of 29.6%, down from 34.7% in Q3 2024[7] - Adjusted EBITDA was $4.3 million, with an adjusted EBITDA margin of 4.9%, compared to 12.3% in Q3 2024[7] - Adjusted EBITDA for the nine months ended October 31, 2025, was $6.6 million, down from $29.5 million in 2024[34] - Adjusted EBITDA Margin for the three months ended October 31, 2025, was 4.9%, down from 12.3% in 2024[34] Cash Flow and Assets - Free Cash Flow for the nine months ended October 31, 2025, was $(46.5) million, compared to $(9.3) million in 2024, indicating a significant decline[36] - Free Cash Flow Margin for the nine months ended October 31, 2025, was (19.5)%, compared to (4.0)% in 2024[36] - Cash and cash equivalents at the end of the period were $50.7 million, down from $77.4 million at the beginning of the year[26] - Total current assets decreased to $66.7 million as of October 31, 2025, from $93.9 million as of January 31, 2025[26] Debt and Liabilities - The company completed a transformative recapitalization, reducing total outstanding debt to $120 million and extending maturity to 2029[5] - Total liabilities decreased to $266.1 million as of October 31, 2025, from $422.5 million as of January 31, 2025[26] - The company reported a gain on debt restructuring of $(96.3) million for the nine months ended October 31, 2025[34] Customer Loyalty - Inventory-related churn decreased by nearly 30% year-over-year in Q3 2025, indicating improved customer loyalty[5] Future Expectations - Adjusted EBITDA margin expectations for fiscal year 2025 are not available due to high variability and complexity in excluded items[23]

Core Insights - Rent the Runway reported a 12.4% year-over-year increase in active subscribers and a 15.4% increase in revenue for Q3 2025, indicating strong business growth [1][12] - The company successfully closed a transformative recapitalization plan, which significantly improved its balance sheet by reducing debt and extending maturity dates [2][5] - A community-driven organic growth strategy has been expanded to enhance brand awareness and customer acquisition [5][12] Financial Performance - Revenue for Q3 2025 was $87.6 million, up from $75.9 million in Q3 2024, marking a 15.4% increase [12] - The number of ending active subscribers reached 148,916, a 12.4% increase from 132,518 in the previous year [12] - Net income for Q3 2025 was $76.5 million, compared to a net loss of $18.9 million in Q3 2024, reflecting a significant turnaround [12][30] Strategic Initiatives - The company made its largest inventory investment in history, nearly doubling the new inventory added to its site, which has driven substantial growth [2][5] - Subscriber retention improved, leading to a nearly 30% reduction in inventory-related churn year-over-year [5] - New community-driven initiatives, such as the RTR Muse and City Ambassador programs, were launched to enhance customer engagement and acquisition [5][12] Operational Metrics - Average active subscribers increased by 12.9% year-over-year, reaching 147,645 [12] - Gross profit for Q3 2025 was $25.9 million, with a gross margin of 29.6%, down from 34.7% in Q3 2024 [12] - Adjusted EBITDA for Q3 2025 was $4.3 million, down from $9.3 million in the same quarter last year, with an adjusted EBITDA margin of 4.9% [12][36] Future Outlook - For the fiscal fourth quarter of 2025, Rent the Runway expects revenue between $85 million and $87 million and an adjusted EBITDA margin between 11% and 13% [13] - The company anticipates continued double-digit growth in ending active subscribers compared to fiscal year 2024 [13]

NEW YORK, Nov. 21, 2025 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. (“Rent the Runway”) (Nasdaq: RENT) announced today that it expects to release its third quarter 2025 financial results for the quarter ended October 31, 2025 on Friday, December 12, 2025, before market open. Rent the Runway will host a conference call and live webcast with the investment community at 8:30 a.m. Eastern Time that same day to discuss its results and to provide a business update. The financial results and live webcast, including ...