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]

Financial Performance - Q1 2024 - Total revenue reached $75.0 million, a 1.1% increase year-over-year[10] - Gross profit was $28.4 million with a gross margin of 38%, a decrease of 4 percentage points year-over-year[10] - Net loss amounted to $(22.0) million, representing a margin of (29)%, an improvement of 11 percentage points year-over-year[10] - Adjusted EBITDA was $6.5 million, resulting in a margin of 9%, an increase of 3 percentage points year-over-year[10] Subscriber Metrics - Q1 2024 - Active subscribers totaled 145.8K, showing a slight increase year-over-year[10] - Average active subscribers were 135.9K, relatively flat year-over-year[10] - Total subscribers, including both active and paused, remained relatively flat year-over-year[10] - 88% of revenue was derived from subscribers[22] - 26% of subscribers added one or more paid items to their subscriptions[22] Financial Guidance - Q2 2024 total revenue is projected to be between $76 million and $78 million[60] - Q2 2024 adjusted EBITDA margin is expected to be 14%-15% of total revenue[60] - FY2024 total revenue is forecasted to be between $301 million and $316 million, indicating a 1% to 6% year-over-year growth[60] - FY2024 adjusted EBITDA margin is anticipated to be 15% to 16% of total revenue[60] - The company aims to achieve free cash flow breakeven for FY24[61]

Q2 2024 Earnings Presentation September 5, 2024 3 3 Contents Recent Business Highlights 02 Q3 + FY 2024 Guidance 03 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 ...

Q3 2024 Earnings Presentation December 9, 2024 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") future results of opera ...

Revenue and Growth - Revenue for the three months ended October 31, 2024 was $75.9 million, representing 4.7% year-over-year growth[120] - Revenue for the nine months ended October 31, 2024 was $229.8 million, representing 3.3% year-over-year growth[120] - Total revenue increased by $3.4 million (4.7%) to $75.9 million for the three months ended October 31, 2024, driven by higher Reserve revenue and increased average selling price per unit[160] - Subscription and Reserve rental revenue grew by $1.6 million (2.5%) to $66.3 million, driven by higher Reserve revenue and average revenue per subscriber[161] - Other revenue increased by $1.8 million (23.1%) to $9.6 million, representing 12.6% of total revenue, up from 10.8% in the same period last year[162] - Total revenue increased by $7.4 million (3.3%) to $229.8 million for the nine months ended October 31, 2024, driven by higher units purchased per subscriber[179] - Other revenue increased by $6.0 million (26.2%) to $28.9 million for the nine months ended October 31, 2024, representing 12.6% of total revenue, up from 10.3% in the same period last year[182] Gross Profit and Margin - Gross Profit for the three months ended October 31, 2024 was $26.3 million, with a gross margin of 34.7%[120] - Gross Profit for the nine months ended October 31, 2024 was $87.1 million, with a gross margin of 37.9%[120] - Gross Profit for the three months ended October 31, 2024 was $26.3 million, with a Gross Margin of 34.7%, compared to $25.2 million and 34.8% for the same period in 2023[140] Net Loss and Adjusted EBITDA - Net Loss for the three months ended October 31, 2024 was $(18.9) million, representing (24.9)% of revenue[120] - Net Loss for the nine months ended October 31, 2024 was $(56.5) million, representing (24.6)% of revenue[120] - Adjusted EBITDA for the three months ended October 31, 2024 was $9.3 million, with an Adjusted EBITDA Margin of 12.3%[120] - Adjusted EBITDA for the nine months ended October 31, 2024 was $29.5 million, with an Adjusted EBITDA Margin of 12.8%[120] - Adjusted EBITDA for the three months ended October 31, 2024 was $9.3 million, with a margin of 12.3%, compared to $3.5 million and 4.8% for the same period in 2023[142] - Adjusted EBITDA increased to $29.5 million for the nine months ended October 31, 2024, with a margin of 12.8%, up from $15.7 million and 7.1% in the same period last year[201] - Net loss for the three months ended October 31, 2024 was $(18.9) million, compared to $(31.5) million for the same period in 2023[203] - Adjusted EBITDA for the three months ended October 31, 2024 was $9.3 million, compared to $3.5 million for the same period in 2023[203] - Adjusted EBITDA margin for the three months ended October 31, 2024 was 12.3%, compared to 4.8% for the same period in 2023[203] Subscribers and Retention - Active Subscribers as of October 31, 2024 were 132,518, showing 1% year-over-year growth[120] - Active Subscribers increased to 132,518 as of October 31, 2024, up from 131,725 as of October 31, 2023, driven by improved subscriber retention[136] Costs and Expenses - Total costs and expenses decreased by $4.8 million (5.1%) to $89.6 million, primarily due to cost savings from the January 2024 restructuring plan and improved warehouse labor productivity[163] - Fulfillment expenses decreased by $0.1 million (0.5%) to $21.4 million, representing 28.2% of revenue, down from 29.7% in the same period last year[165] - Technology expenses decreased by $3.4 million (28.1%) to $8.7 million, representing 11.5% of revenue, down from 16.7% in the same period last year[167] - Marketing expenses remained flat at $7.1 million, with non-personnel costs at $6.4 million, representing 8.4% of revenue[169] - General and administrative expenses decreased by $3.2 million (13.1%) to $21.2 million, representing 27.9% of revenue, down from 33.7% in the same period last year[171] - Rental product depreciation and revenue share increased by $2.4 million (9.3%) to $28.2 million, representing 37.2% of revenue, up from 35.6% in the same period last year[173] - Other depreciation and amortization decreased by $0.5 million (14.3%) to $3.0 million for the three months ended October 31, 2024, driven by lower depreciation from machinery and equipment and reusable packaging[174] - Total costs and expenses decreased by $13.5 million (4.8%) to $269.6 million for the nine months ended October 31, 2024, driven by lower share-based compensation and cost savings from the January 2024 restructuring plan[183] - Fulfillment expenses decreased by $3.3 million (5.0%) to $62.6 million for the nine months ended October 31, 2024, representing 27.2% of revenue, down from 29.6% in the same period last year[184] - Technology expenses decreased by $11.1 million (29.1%) to $27.0 million for the nine months ended October 31, 2024, driven by cost savings from the January 2024 restructuring plan[187] - General and administrative expenses decreased by $10.6 million (13.8%) to $66.2 million for the nine months ended October 31, 2024, representing 28.8% of revenue, down from 34.5% in the same period last year[191] - Rental product depreciation and revenue share increased by $13.4 million (20.1%) to $80.1 million for the nine months ended October 31, 2024, representing 34.9% of revenue, up from 30.0% in the same period last year[193] Cash and Liquidity - Cash and Cash Equivalents as of October 31, 2024 was $74.1 million[120] - Cash and cash equivalents as of October 31, 2024 were $74.1 million, with restricted cash of $9.0 million[204] - Net cash provided by operating activities for the nine months ended October 31, 2024 was $11.5 million, compared to $(7.7) million for the same period in 2023[213] - Net cash used in investing activities for the nine months ended October 31, 2024 was $(20.8) million, compared to $(39.6) million for the same period in 2023[213] - The company expects to achieve cash flow break-even in fiscal year 2024[208] - The 2023 Amended Temasek Facility eliminates all interest payments for six full fiscal quarters starting from Q4 2023[207] - The company filed a shelf registration statement allowing it to offer securities up to $40 million[210] - Net cash used in investing activities for the nine months ended October 31, 2023 was $(39.6) million, primarily due to $(56.3) million in rental product purchases and $(3.2) million in fixed and intangible asset purchases[218] - The company had $326.7 million of total debt outstanding as of October 31, 2024, with none maturing within the next 12 months[220] - The 2023 Amended Temasek Facility eliminated all interest for six fiscal quarters starting Q4 2023 and reduced the minimum liquidity covenant from $50 million to $30 million[220] Debt and Interest - Net interest expense decreased by $3.9 million (39.0%) to $6.1 million for the three months ended October 31, 2024, primarily due to reduced PIK and cash interest from the 2023 Amended Temasek Facility[177] - The 2023 Amended Temasek Facility is expected to reduce cash interest payments during fiscal years 2024 and 2025, improving overall liquidity[129] - The 2023 Amended Temasek Facility eliminates all interest payments for six full fiscal quarters starting from Q4 2023[207] - The 2023 Amended Temasek Facility eliminated all interest for six fiscal quarters starting Q4 2023 and reduced the minimum liquidity covenant from $50 million to $30 million[220] Operational Efficiency and Cost Management - The company expects transportation costs to decrease as a percentage of sales in fiscal year 2024 due to transportation efficiencies and a new transportation contract[133] - The company anticipates higher sales projections and the impact of increasing rental product depth to decrease purchases of rental product as a percentage of revenue in fiscal year 2024[127] - The company plans to continue driving fulfillment and operational efficiency gains to offset cost increases and strategically evolve its mix of revenue and product acquisition[140] - The company expects to reduce fixed costs as a percentage of total revenue in fiscal year 2024, with operating costs growing more slowly than total revenue[127] - Purchases of rental product as a percentage of revenue decreased to 26% in fiscal year 2023 from 21% in 2022 and 15% in 2021, with expectations of further decrease in fiscal year 2024[127] - 61% of new items were acquired through non-Wholesale channels in fiscal year 2023, up from 58% in 2022 and 55% in 2021, with plans to further increase this percentage in fiscal year 2024[127] Internal Controls and Financial Reporting - Material weaknesses in internal control over financial reporting were identified as of October 31, 2024, including insufficient evidence of control operation and ineffective IT general controls[230] - Remediation efforts include formalizing control procedures, improving segregation of duties, and implementing IT general controls[232] - The company continues to implement comprehensive access control protocols and program change management controls to address material weaknesses[234] - No changes in internal control over financial reporting during the quarter ended October 31, 2024 materially affected the company's controls[235] - The company concluded no impairment was necessary for long-lived assets as of October 31, 2023, as undiscounted cash flows exceeded carrying values[224]

Core Viewpoint - Rent the Runway, Inc. is set to release its third quarter 2024 financial results on December 9, 2024, before market open, and will host a conference call to discuss these 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, 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, featuring 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 been recognized multiple times on CNBC's "Disruptor 50" and Fast Company's Most Innovative Companies list, highlighting its significant impact in the fashion industry [4].

Core Viewpoint - Rent the Runway, Inc. (RENT) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks Consensus Estimate for Rent the Runway indicates an expected loss of -$19.08 per share for the fiscal year ending January 2025, reflecting a year-over-year change of 40.2% [5]. - Over the past three months, analysts have raised their earnings estimates for Rent the Runway by 14.1% [5]. Impact of Earnings Estimates - Changes in a company's future earnings potential, as shown through earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, which influences their buying and selling actions, subsequently affecting stock prices [3]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - The upgrade of Rent the Runway to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [6].

Group 1: Company Overview - Rent the Runway (RTR) is a fashion company that allows customers to rent high-priced designer garments, specifically catering to women, providing access to luxury clothing at a lower cost than purchasing [2][3] - The company aims to offer an "unlimited closet" experience, allowing customers to swap garments whenever they like, generating revenue primarily through subscription fees ranging from $94 to $235 per month [3] Group 2: Financial Performance - RTR has improved its profitability, increasing its gross margin by nearly 600 basis points since fiscal year 2021, with an adjusted EBITDA margin exceeding 17% last quarter, a 700+ basis point increase from the previous year [4] - Free cash flow has significantly improved, with a loss of $6 million in the first half of 2024 compared to a loss of $30 million in the same period of 2023, with expectations to break even on cash flow in 2024 [5][6] Group 3: Competitive Landscape - RTR's active subscribers have declined by 3% year over year, while competitors like Nuuly have seen a 55% growth in active subscribers, indicating a competitive disadvantage for RTR [8][10] - Nuuly, owned by Urban Outfitters, has a significant advantage in offering a wider variety of clothing options and a lower price point, which contributes to its superior growth compared to RTR [10] Group 4: Market Sentiment and Valuation - Despite challenges, RTR's low valuation is notable, trading at nearly one-tenth of its projected sales over the next twelve months, which has attracted interest from some Wall Street analysts [12] - Analysts have set a price target of $26 per share for RTR, suggesting a potential upside of 180% from its current trading price of $9.31 [1][11]