Rent the Runway(US:RENT)2025-09-11 20:08Revenue and Growth - Rent the Runway reported Q2 2025 revenue of $80.9 million, a 2.5% increase from $78.9 million in Q2 2024[7] - Active subscribers reached 146,373, representing a 13.4% year-over-year growth from 129,073 in Q2 2024[7] - Total revenue for the three months ended July 31, 2025, was $80.9 million, a 2.5% increase from $78.9 million in the same period of 2024[28] - Subscription and Reserve rental revenue for the six months ended July 31, 2025, was $131.2 million, down 2.5% from $134.6 million in 2024[28] - The company anticipates double-digit growth in ending active subscribers compared to FY 2024[10] Profitability and Loss - Gross profit was $24.3 million, down 25.0% from $32.4 million in Q2 2024, with a gross margin of 30.0% compared to 41.1% in the prior year[7] - Adjusted EBITDA was $3.6 million, down from $13.7 million in Q2 2024, with an adjusted EBITDA margin of 4.4% compared to 17.4% in the prior year[7] - Net loss for the six months ended July 31, 2025, was $52.5 million, compared to a net loss of $37.6 million in the same period of 2024[30] - Operating loss for the three months ended July 31, 2025, was $20.1 million, an increase from $9.6 million in the same period of 2024[28] - Net loss for the three months ended July 31, 2025, was $(26.4) million, compared to $(15.6) million for the same period in 2024, representing an increase in net loss of 69.9%[34] - Adjusted EBITDA for the six months ended July 31, 2025, was $2.3 million, a decrease of 88.6% from $20.2 million in the same period in 2024[34] - Free Cash Flow for the six months ended July 31, 2025, was $(32.9) million, compared to $(5.9) million in 2024, indicating a significant decline in cash flow[36] - Net Loss as a percentage of revenue for the three months ended July 31, 2025, was (32.6)%, compared to (19.8)% in 2024, indicating a higher loss relative to revenue[34] Financial Position - The company reduced its debt from $340 million to $120 million, extending maturity to 2029, providing financial flexibility for future growth[5] - Total assets as of July 31, 2025, were $219.0 million, down from $240.0 million as of January 31, 2025[26] - Total liabilities increased to $451.1 million as of July 31, 2025, compared to $422.5 million as of January 31, 2025[26] - Cash and cash equivalents at the end of the period were $43.6 million, a decrease from $77.4 million at the beginning of the period[26] - The company incurred $34.3 million in net decrease in cash and cash equivalents and restricted cash during the six months ended July 31, 2025[30] Inventory and Engagement - Engagement with new inventory increased significantly, with share of views up 84% year-over-year and new units at home up 57% year-over-year[7] - Revenue share units from existing partners increased by 40% year-over-year, with total revenue share units up 119% year-over-year[7] - The company plans to add over 80 new brands in FY 2025, with 56 already launched in the first half of the year[7] - Purchases of rental product for the six months ended July 31, 2025, totaled $(42.0) million, compared to $(26.3) million in 2024, showing increased investment in rental inventory[36] - Proceeds from the sale of rental product for the six months ended July 31, 2025, were $11.8 million, down from $13.6 million in 2024, indicating a decline in sales[36] Future Outlook - For Q3 2025, Rent the Runway expects revenue between $82 million and $84 million, with an adjusted EBITDA margin between (2)% and +2%[10] - The company plans to continue focusing on technology and marketing investments to drive future growth[23] - Free Cash Flow Margin for the six months ended July 31, 2025, was (21.9)%, compared to (3.8)% in 2024, reflecting a worsening cash flow situation[36] - Adjusted EBITDA Margin for the three months ended July 31, 2025, was 4.4%, down from 17.4% in the same period in 2024[34] - Non-recurring adjustments for the three months ended July 31, 2025, included $2.0 million of transaction-related costs, impacting overall financial performance[34]