Financial Performance - Total revenue decreased by 72% year-over-year to $696 million in Q1 2025[9] - Gross profit was $219 million with a margin of 315%, a decrease of 6 percentage points year-over-year[9] - Net loss was $261 million with a margin of -375%, a decrease of 8 percentage points year-over-year[9] - Adjusted EBITDA was -$13 million with a margin of -19%, a decrease of 11 percentage points year-over-year[9] Subscriber Metrics - Active subscribers reached 1472 thousand, up 1% year-over-year[9] - Average active subscribers were 1335 thousand, down 2% year-over-year[9] - Total subscribers were 1822 thousand, down 2% year-over-year[9] Inventory and Customer Engagement - Q1 2025 new inventory receipts increased by 24% year-over-year[33, 36] - April add-on gross bookings increased by 11% year-over-year[42] - Share of views increased by 23% year-over-year[43] Guidance - Q2 2025 total revenue is projected to be between $76 million and $80 million[65] - FY2025 free cash flow is projected to be between -$30 million and -$40 million[65]

Core Insights - Rent the Runway reported the strongest quarterly customer retention in four years and a return to subscriber growth with over 147,000 active subscribers, the highest count in the company's history [2][3][4] Business Strategy and Performance - The company is undergoing a multi-year corporate strategy transformation, focusing on aggressive inventory acquisition, enhancing product experience, and rebuilding customer relationships, which has led to improved subscriber growth and retention [3][4] - A significant investment in inventory has resulted in a 24% increase in new inventory receipts in Q1 2025 compared to Q1 2024, with expectations for a 134% year-over-year increase for the remainder of the year [5][10] - The launch of 36 new brands and over 1,000 new styles in Q1 2025 has contributed to increased customer engagement, with metrics showing a 23% higher share of views and 46% more hearts compared to the previous year [5][10] Financial Highlights - Revenue for Q1 2025 was $69.6 million, a decrease of 7.2% from $75.0 million in Q1 2024 [10] - The company reported a net loss of $26.1 million, compared to a net loss of $22.0 million in the same quarter of the previous year, with a net loss as a percentage of revenue at 37.5% [10][27] - Adjusted EBITDA for Q1 2025 was $(1.3) million, down from $6.5 million in Q1 2024, indicating a significant decline in operational performance [10][27] Subscriber Metrics - Ending active subscribers increased by 1% to 147,157 from 145,837 at the end of Q1 2024, while average active subscribers decreased by 2% [10] - The total number of subscribers decreased by 2% to 182,209 from 185,346 in the same period last year [10] Future Outlook - The company expects double-digit growth in ending active subscribers for fiscal year 2025, indicating confidence in the effectiveness of its new strategies [6][7] - Revenue guidance for the second quarter of 2025 is projected between $76 million and $80 million, with an adjusted EBITDA margin expected to range from -2% to +2% [10][7]

Core Insights - Rent the Runway, Inc. is set to release its first quarter 2025 financial results on June 5, 2025, after market close [1] - A conference call and live webcast will be held at 4:30 p.m. Eastern Time on the same day to discuss the results and provide a business update [1] Company Overview - Founded in 2009, Rent the Runway is transforming the trillion-dollar fashion industry with its "Closet in the Cloud" concept [4] - The company's mission is to empower women to feel their best every day through subscription services, rental items, and resale options from hundreds of designer brands [4] - Rent the Runway offers a diverse assortment of millions of items for various occasions, including evening wear, accessories, workwear, and activewear [4] - The company has developed a two-sided discovery engine that connects engaged customers with differentiated brand partners, leveraging its brand, data, logistics, and technology [4] - Under the leadership of CEO and Co-Founder Jennifer Hyman, Rent the Runway has been recognized multiple times on CNBC's "Disruptor 50" and Fast Company's Most Innovative Companies list [4]

Product Acquisition and Sourcing - The share of products sourced through Share by RTR and Exclusive Designs has increased from approximately 26% in fiscal year 2019 to approximately 70% in fiscal year 2024[47]. - Wholesale represented 30% of product acquisition in fiscal year 2024, with original retail prices set by brands at an approximate 2.5x markup to wholesale prices[48]. - Share by RTR accounted for 48% of product acquisition in fiscal year 2024, with revenue share fees calculated net of logistics fees[49]. - Exclusive Designs made up 22% of product acquisition in fiscal year 2024, offering styles exclusive to Rent the Runway for a limited time[51]. Brand Awareness and Marketing - As of December 2023, unaided brand awareness was 19% among U.S. women ages 18-45 with a household income of $50,000 or more, and 27% among those with a household income of $100,000 or more[53]. - In fiscal year 2024, nearly half of subscribers reported sharing their Rent the Runway experience on social media over five times, indicating strong organic growth[54]. - The company aims to enhance marketing efforts in fiscal year 2025 by focusing on increased product quantity and desirability, improved search placements, and paid influencers[55]. - Marketing efforts will focus on promoting rental product increases and enhancements, including a paid influencer strategy and improved organic social channel performance[79]. Data Utilization and Technology - The company captures thousands of unique data points per subscriber per year, leveraging this data to optimize product offerings and enhance customer experience[58]. - The proprietary product catalog system supports management at the SKU level, facilitating fast ingestion of new styles without sacrificing data collection[71]. - The company has implemented large-scale automation and innovative processes for garment storage and processing, resulting in cost savings and increased shipment capacity[73]. Fulfillment and Capacity - The company has two fulfillment centers with a total capacity to store over 2 million garments and accessories, aiming for delivery within two to three business days[75]. - The company expects to increase its weekly processing capacity to handle at least 4 times its active subscriber count by the end of fiscal year 2024 with minimal additional investment[75]. Financial Overview - As of January 31, 2025, the company had cash and cash equivalents of $77.4 million and $333.7 million of debt outstanding under the 2025 Amended Facility[432]. Customer Retention and Acquisition - The company plans to enhance customer retention and acquisition by increasing the availability and desirability of rental products on its website and app in fiscal year 2025[78]. Employment and Workforce - The company had a total of 912 full-time employees and 141 part-time employees as of January 31, 2025, with a technology team of 131 employees[98]. Legal and Regulatory Environment - The company holds five issued patents in the United States, expiring between 2031 and 2037, and has a total of 23 registered trademarks in the U.S.[94]. - The company is subject to various complex laws and regulations that may evolve and impact its business operations[88]. Seasonal Trends and Expenses - The company experienced typical seasonal patterns in fiscal year 2024, with higher subscriber acquisition in March through May and September through November[82]. - Transportation expenses are typically highest in the fourth fiscal quarter due to carrier rate increases and higher service levels during holidays[83].

Financial Data and Key Metrics Changes - The company improved its cash position significantly, with a decline of $6.6 million in fiscal year 2024 compared to a decline of $70.5 million in fiscal year 2023, resulting in record low cash consumption [5] - Total revenue for Q4 2024 was $76.4 million, an increase of $600,000 or 0.8% year over year [31] - Adjusted EBITDA for Q4 2024 was $17.4 million or 22.8% of revenue, compared to $11.2 million or 14.8% of revenue in the prior year [33] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue decreased by 1.2% year over year in Q4 2024, primarily due to lower average subscribers [31] - Other revenue increased by 13.5% or $1.4 million year over year [31] - Fulfillment expenses were $20.2 million in Q4 2024, slightly lower than $20.1 million in Q4 2023, with fulfillment expenses as a percentage of revenue at 26.4% [32] Market Data and Key Metrics Changes - Ending active subscribers decreased to 119,778, down approximately 4.9% year over year [29] - Average active subscribers during the quarter were 126,148, a decrease of 2.1% from the prior year [29] - The company plans to double inventory purchases in fiscal year 2025, with 62% of total units expected to come from the share by RTR program [23][36] Company Strategy and Development Direction - The company is focusing on a disciplined growth strategy rather than growth at all costs, emphasizing the importance of inventory investment to unlock customer growth and retention [6][22] - A significant inventory investment is planned for 2025, with a goal to add two times new inventory units year over year and 75% more new styles [16][17] - The company aims to evolve into a discovery engine for consumers to find the latest in designer fashion, leveraging its partnerships with brands [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to operate at nearly breakeven levels while maintaining steady revenue, highlighting improvements in cost structure and working capital [28] - The company anticipates increased cash consumption in fiscal year 2025 due to inventory investments, but expects this to lead to subscriber growth and improved customer satisfaction [37] - Management is cautious about external factors such as tariffs and economic conditions but believes renting offers substantial value compared to buying [40] Other Important Information - The company has restructured its customer service team to focus more on proactive engagement, which has led to improved customer satisfaction scores [10] - The company has implemented a 60-day customer promise for new members, providing risk-free renting for the first two months [19] Q&A Session Summary Question: Can you help us understand the cash flow guidance and the drivers of it? - The cash flow guidance reflects a significant increase in inventory, with a CapEx guidance of $70 million to $75 million for the year, which is a considerable increase from fiscal year 2024 [43][44] Question: What have you seen more recently regarding consumer reactions to tariffs? - The company believes renting provides considerable value versus buying, and the new inventory addresses the primary pain point for customers, which is expected to improve retention [46][47] Question: How do we think about the customer experience changing in 2025? - The company is doubling the number of new units on the platform, which will significantly enhance the customer experience with more new arrivals and greater brand variety [50][51]

Q4 2024 Earnings Presentation April 15, 2025 RENT THE RUNWAY Forward-Looking Statements Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this presentation that do not relate to maers 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 a ...

Financial Data and Key Metrics Changes - The company improved its cash position, reducing cash consumption from a decline of $70.5 million in fiscal year 2023 to a decline of only $6.6 million at the end of fiscal year 2024, resulting in record low cash consumption [9] - Total revenue for Q4 2024 was $76.4 million, up $0.6 million or 0.8% year-over-year [50] - Adjusted EBITDA for Q4 2024 was $17.4 million or 22.8% of revenue, compared to $11.2 million or 14.8% of revenue in the prior year [53] - Free cash flow for the 12 months ended January 31, 2025, was negative $7.2 million, an improvement from negative $70.3 million in the previous year [54] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue decreased by 1.2% year-over-year in Q4 2024, primarily due to lower average subscribers [51] - Fulfillment expenses were $20.2 million in Q4 2024, slightly higher than $20.1 million in Q4 2023, but lower as a percentage of revenue [51] - Gross margins were 37.7% in Q4 2024, down from 39.4% in Q4 2023, reflecting higher revenue share costs [52] Market Data and Key Metrics Changes - Ending active subscribers decreased to 119,778, down approximately 4.9% year-over-year [48] - Average active subscribers during the quarter were 126,148, a decrease of 2.1% compared to the prior year [48] Company Strategy and Development Direction - The company is focusing on a disciplined growth strategy rather than growth at all costs, with plans to invest in inventory to unlock customer growth and retention [10][36] - A significant investment in inventory is planned for 2025, with expectations to double the number of new inventory units year-over-year [26] - The company aims to enhance customer loyalty and retention through improved inventory depth and variety, responding to customer feedback [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to operate at nearly break-even levels while maintaining steady revenue [46] - The company anticipates double-digit ending active subscriber growth for fiscal year 2025, despite expected cash consumption between negative $30 million and negative $40 million [62] - Management emphasized the importance of inventory in improving customer loyalty and driving growth [82] Other Important Information - The company has restructured its customer service team to focus more on proactive engagement, which has led to improved customer satisfaction scores [17][16] - The company is leveraging its data to identify and collaborate with desirable brands, enhancing its inventory offerings [38][25] Q&A Session Summary Question: Can you help us understand the cash flow guidance and the drivers of it? - Management indicated that the increase in inventory and the share by RTR program are significant factors driving cash flow guidance, with a notable increase in capital expenditures expected [72][74] Question: How are consumers reacting to recent economic volatility and tariffs? - Management noted that renting offers considerable value compared to buying, and they are focused on addressing customer pain points through increased inventory [76][78] Question: Can you speak to the changes in customer experience due to inventory investments? - Management highlighted that the doubling of inventory will significantly enhance customer experience, with more new arrivals and better brand offerings [84][86]

Financial Performance - Revenue for fiscal year 2024 was $306.2 million, a 2.7% increase year-over-year from $298.2 million in fiscal year 2023[15]. - Net loss for fiscal year 2024 was $(69.9) million, compared to $(113.2) million in fiscal year 2023, representing a net loss as a percentage of revenue of (22.8)%, down from (38.0)%[15]. - Adjusted EBITDA for fiscal year 2024 was $46.9 million, compared to $26.9 million in fiscal year 2023, with an adjusted EBITDA margin of 15.3%[15]. - For fiscal year 2025, the company expects revenue between $68 million and $70 million and free cash flow between $(30) million and $(40) million[15]. - The net loss for the year ended January 31, 2025, was $69.9 million, compared to a net loss of $113.2 million for the year ended January 31, 2024, indicating an improvement of 38.2%[34]. - Total revenue for the three months ended January 31, 2025, was $76.4 million, a slight increase from $75.8 million in the same period of 2024, representing a growth of 0.8%[32]. - Subscription and Reserve rental revenue decreased to $64.6 million in Q1 2025 from $65.4 million in Q1 2024, a decline of 1.2%[32]. - Adjusted EBITDA for the three months ended January 31, 2025, was $17.4 million, representing an Adjusted EBITDA margin of 22.8%, compared to $11.2 million and 14.8% in the prior year[38]. - Free Cash Flow for the three months ended January 31, 2025, was $2.1 million, with a Free Cash Flow Margin of 2.7%, contrasting with a Free Cash Flow of $(3.4) million and a margin of (4.5)% in the previous quarter[40]. Subscriber Metrics - Active subscribers at the end of fiscal year 2024 were 119,778, a decrease of 5% from 125,954 at the end of fiscal year 2023[11]. - The company aims to return to subscriber growth in fiscal year 2025, focusing on customer loyalty and inventory reinvestment[2][6]. Cash and Liquidity - Cash and cash equivalents at the end of fiscal year 2024 were $77.4 million, with a decline in cash consumption from $(70.5) million in fiscal year 2023 to $(6.6) million[4][15]. - The company reported a cash and cash equivalents balance of $77.4 million as of January 31, 2025, down from $84.0 million as of January 31, 2024, a decrease of 7.9%[30]. - The company experienced a total net cash used in operating activities of $12.9 million for the year ended January 31, 2025, compared to $(15.7) million in the previous year[40]. - The company reported net cash provided by operating activities of $1.4 million for the three months ended January 31, 2025, compared to $4.7 million for the three months ended October 31, 2024[40]. Inventory and Customer Retention - The company announced the largest inventory acquisition in its history, expecting to approximately double the new inventory in fiscal year 2025[2][7]. - Customer retention improved by 8% in fiscal year 2024 compared to fiscal year 2023, attributed to increased inventory depth[15]. - The company plans to increase units from the Share by RTR program to approximately 62% of total units in fiscal year 2025, a 2.5x increase versus fiscal year 2024[10]. Debt and Liabilities - Long-term debt increased to $333.7 million as of January 31, 2025, from $306.7 million as of January 31, 2024, an increase of 8.8%[30]. - Total liabilities rose to $422.5 million as of January 31, 2025, compared to $400.8 million as of January 31, 2024, reflecting a growth of 5.4%[30]. - Total assets decreased from $278.5 million as of January 31, 2024, to $240.0 million as of January 31, 2025, a reduction of 13.8%[30]. Other Financial Metrics - The weighted-average shares used in computing net loss per share increased to 3,897,238 for the three months ended January 31, 2025, compared to 3,530,973 for the same period in 2024, an increase of 10.4%[32]. - For the three months ended January 31, 2025, the net loss was $13.4 million, an improvement from a net loss of $24.8 million for the same period in 2024[38]. - The company reported a total of $24.2 million in interest expense for the year ended January 31, 2025, down from $33.7 million in the previous year[38]. - The write-off of liquidated assets was $2.7 million for the three months ended January 31, 2025, compared to $0.8 million in the same period of 2024[38]. - The company incurred restructuring charges related to severance and related costs, amounting to $2.0 million for the three months ended January 31, 2024[38]. - Total depreciation for rental products was $17.0 million for the three months ended January 31, 2025, up from $16.7 million in the same period of 2024[38]. - Proceeds from the sale of rental products amounted to $8.0 million for the three months ended January 31, 2025, compared to $6.5 million in the previous quarter[40].

Core Insights - Rent the Runway, Inc. reported a significant improvement in cash consumption, with a decline of only $6.6 million in fiscal year 2024 compared to a decline of $70.5 million in fiscal year 2023, indicating a record low cash burn [1][3][5] - The company announced its largest inventory acquisition in history, with plans to double the new inventory on the platform in fiscal year 2025, aiming to enhance customer experience and drive subscriber growth [1][8][12] - Rent the Runway expects a return to subscriber growth in fiscal year 2025, supported by a disciplined growth strategy and a focus on customer loyalty [4][5][11] Financial Performance - For fiscal year 2024, total revenue was $306.2 million, a 2.7% increase from $298.2 million in fiscal year 2023 [12] - The company reported a net loss of $69.9 million for fiscal year 2024, an improvement from a net loss of $113.2 million in fiscal year 2023 [12][30] - Adjusted EBITDA for fiscal year 2024 was $46.9 million, compared to $26.9 million in fiscal year 2023, with an adjusted EBITDA margin of 15.3% [12][34] Subscriber Metrics - As of January 31, 2025, Rent the Runway had 119,778 active subscribers, a decrease of 5% from 125,954 at the end of fiscal year 2023 [12] - Average active subscribers for fiscal year 2024 were 132,574, reflecting a 2% decrease year-over-year [12] - The company improved customer retention by 8% in fiscal year 2024 compared to fiscal year 2023, attributed to increased inventory depth [12][7] Inventory and Customer Experience Initiatives - The company launched a "We Heard You" customer campaign to enhance customer engagement and satisfaction, focusing on inventory that customers desire [8] - The Share by RTR program is expected to account for approximately 62% of total units in fiscal year 2025, representing a 2.5x increase from fiscal year 2024 [8] - New customer experience initiatives include a 60-day risk-free renting promise and personalized onboarding through customer service calls [8]

Company Overview - Rent the Runway, Inc. is disrupting the trillion-dollar fashion industry with its "Closet in the Cloud" concept, allowing women to feel their best every day [4] - The company offers subscription services, a-la-carte rentals, and resale shopping from hundreds of designer brands, providing a wide assortment of millions of items for various occasions [4] - Under the leadership of CEO and Co-Founder Jennifer Hyman, Rent the Runway has received multiple accolades, including being named to CNBC's "Disruptor 50" five times and Fast Company's Most Innovative Companies list four times [4] Upcoming Financial Results - Rent the Runway is set to release its fourth quarter and fiscal year 2024 financial results on April 15, 2025, before market open [1] - A conference call and live webcast will be held at 8:30 a.m. Eastern Time on the same day to discuss the results and provide a business update [1] Accessing Information - The financial results and live webcast will be accessible through the Investor Relations section of Rent the Runway's website [2] - A replay of the conference call will be available for at least fourteen days after the call [3]