The RealReal(US:REAL)2025-02-21 21:11Financial Performance - In 2024, the company's Gross Merchandise Value (GMV) reached $1,829,463, an increase from $1,725,983 in 2023, while the Net Merchandise Value (NMV) rose to $1,382,875 from $1,269,880[199]. - Total revenue for 2024 was $600.5 million, compared to $549.3 million in 2023, reflecting overall growth despite a decline in direct revenue[220]. - The net loss for the year ended December 31, 2024, was $134.2 million, an improvement from a net loss of $168.5 million in 2023 and $196.4 million in 2022[266]. - Adjusted EBITDA for the year ended December 31, 2024, was $9.3 million, compared to a loss of $55.2 million in 2023 and a loss of $112.5 million in 2022[266]. Revenue Breakdown - The consignment revenue for 2024 was $473,396, up from $415,572 in 2023, reflecting a take rate increase to 38.4% from 37.5%[199]. - Direct revenue decreased by $14.6 million, or 18%, in 2024 compared to 2023, primarily due to planned actions to rebalance vendor-purchased company-owned inventory[223]. - Shipping services revenue increased by $7.9 million, or 15%, in 2024 compared to 2023, primarily due to an increase in the standard shipping fee per order[224]. - Consignment revenue increased by $57.8 million, or 14%, in 2024 compared to 2023, driven by a 4% increase in average order value (AOV) and a 240 basis point improvement in the take rate[222]. Customer Metrics - Active buyers increased to 972,000 in 2024, compared to 922,000 in 2023, demonstrating growth in the buyer base[199]. - Repeat consignors accounted for over 80% of GMV in both 2024 and 2023, showcasing strong customer loyalty[191]. - The Average Order Value (AOV) improved to $545 in 2024, up from $523 in 2023, indicating higher spending per transaction[199]. Operational Efficiency - The company reported a sell-through ratio of approximately 85% in 2024, indicating strong demand relative to supply[190]. - The buyer acquisition cost (BAC) has declined over time, reflecting improved efficiency in attracting new buyers[194]. - The company operates in approximately 1.4 million square feet of leased authentication centers, supporting its operational scalability[195]. - The company continues to invest in technology and infrastructure to enhance operational efficiency and support future growth[195]. Cost Management - Total gross margin increased by 603 basis points in 2024 compared to 2023, driven by higher margin consignment revenue and a decrease in lower margin direct revenue[231]. - Cost of consignment revenue decreased by $4.3 million, or 7%, in 2024 compared to 2023, attributed to reduced overhead costs[225]. - Cost of direct revenue decreased by $18.5 million, or 25%, in 2024 compared to 2023, reflecting the decrease in direct revenue[227]. - Marketing expense decreased by $3.0 million, or 5%, in 2024 compared to 2023, primarily due to a reduction in advertising costs[232]. Future Outlook - Operations and technology expenses are expected to increase in future periods to support growth, including investments in automation and technology improvements[215]. - Selling, general and administrative expenses are anticipated to decrease as a percentage of revenue over the longer term[216]. - The company expects operating losses and negative cash flows to continue in the foreseeable future but believes existing cash will meet needs for at least the next 12 months[246]. Debt and Cash Flow - As of December 31, 2024, the company had cash and cash equivalents of $172.2 million and an accumulated deficit of $1,253.8 million[244]. - Net cash provided by operating activities was $26.8 million in 2024, despite a net loss of $134.2 million[251]. - Net cash used in investing activities was $25.6 million, primarily for property and equipment purchases and capitalized software costs[252]. - The company exchanged $145.8 million of 2025 Notes and $6.5 million of 2028 Notes for $135.0 million of 2029 Notes, which bear an interest rate of 13.00% per annum[259]. Interest and Liabilities - Interest income decreased by $0.9 million, or 10%, in 2024, totaling $8.8 million, due to lower average cash balances[242]. - Interest expense increased by $10.7 million, or 100%, in 2024, reaching $21.4 million, due to contractual interest from the 2029 Notes[243]. - The fair value of warrant liability increased by $68.2 million, or 100%, in 2024, attributed to the issuance of warrants for up to 7,894,737 shares[239]. - The change in fair value of warrant liability for the year ended December 31, 2024, was $68.2 million, indicating significant fluctuations in the valuation of the warrants issued[266].