The RealReal(US:REAL)2025-05-08 20:14Financial Performance - For the three months ended March 31, 2025, the Gross Merchandise Value (GMV) was $490,405,000, an increase of 8.5% from $451,941,000 in the same period of 2024[159]. - The Net Merchandise Value (NMV) for the same period was $370,757,000, up from $334,815,000, reflecting an increase of 10.7% year-over-year[159]. - Total revenue for Q1 2025 was $160.0 million, a 11.2% increase from $143.8 million in Q1 2024[185]. - Net income for Q1 2025 was $62.4 million, a significant recovery from a net loss of $31.1 million in Q1 2024[185]. - Adjusted EBITDA for Q1 2025 was $4.1 million, compared to a loss of $2.3 million in Q1 2024[174]. Revenue Breakdown - Consignment revenue reached $123,814,000, compared to $115,648,000 in the prior year, marking a growth of 7.5%[159]. - Direct revenue surged by $7.7 million, or 61%, to $20.5 million in Q1 2025, primarily due to higher sell-through of inventory[189]. - Shipping services revenue rose by $0.3 million, or 2%, to $15.8 million in Q1 2025, attributed to a 3% increase in the number of orders[190]. - Consignment revenue increased by $8.2 million, or 7%, to $123.8 million in Q1 2025, driven by a 5% increase in average order value and a 3% increase in the number of orders[187]. Operational Metrics - Active buyers increased to 985,000 as of March 31, 2025, compared to 922,000 in the same period last year, representing a growth of 6.8%[159]. - The Average Order Value (AOV) rose to $564 in Q1 2025, compared to $538 in Q1 2024, indicating a growth of 4.8%[159]. - Repeat consignors accounted for over 80% of GMV in both Q1 2025 and Q1 2024, highlighting strong retention[153]. - As of March 31, 2025, 15% of buyers also consigned items, while 49% of consignors made purchases, demonstrating a strong cross-engagement[155]. Cost and Expenses - Total operating expenses increased to $132.8 million in Q1 2025, compared to $125.2 million in Q1 2024[185]. - Marketing expenses rose by $0.6 million, or 4%, to $15.9 million, primarily due to increased advertising costs, while as a percentage of revenue, it decreased to 9.9% from 10.6%[199][200]. - Operations and technology expenses increased by $4.0 million, or 6%, to $67.0 million, with a decrease in expenses as a percentage of revenue to 41.9% from 43.8%[201][202]. - Selling, general and administrative expenses increased by $3.2 million, or 7%, to $50.0 million, with a decrease in expenses as a percentage of revenue to 31.2% from 32.5%[203][204]. Profitability Metrics - Gross profit margin improved to 75.0% in Q1 2025, up from 74.6% in Q1 2024[186]. - Total gross margin increased by 40 basis points for the three months ended March 31, 2025, compared to the same period in 2024[198]. Debt and Interest - Gain on extinguishment of debt increased by $32.9 million, or 788%, to $37.1 million for the three months ended March 31, 2025[207]. - Interest income decreased by $0.7 million, or 34%, to $1.4 million due to lower average cash balances[208]. - Interest expense increased by $2.6 million, or 68%, to $6.3 million, attributed to the full-quarter impact of the 2029 Notes and the issuance of the 2031 Notes[209][210]. Cash and Liquidity - As of March 31, 2025, the company had cash and cash equivalents of $139.6 million and an accumulated deficit of $1,191.4 million[211]. - As of March 31, 2025, the Company had unrestricted cash and cash equivalents of $139.6 million, with a hypothetical 10% change in interest rates expected to have no material impact on financial results[236]. Future Outlook - The company expects to maintain a full valuation allowance for its net deferred tax assets for the foreseeable future[184]. - The Company anticipates ongoing inflationary pressures that may affect costs and financial condition[237]. Infrastructure and Technology - The company operates in approximately 1.4 million square feet of leased authentication centers in Arizona and New Jersey to support its operations[156]. - The company continues to invest in technology and infrastructure to enhance operational efficiency and support future growth[156].