The RealReal(US:REAL)2025-11-10 21:25Financial Performance - For the three months ended September 30, 2025, Gross Merchandise Value (GMV) was $519.8 million, an increase of 20% from $433.1 million in the same period of 2024[161]. - Net Merchandise Value (NMV) for the same period was $397.1 million, up 18.5% from $335.2 million year-over-year[161]. - Total revenue for the three months ended September 30, 2025, was $173.6 million, a 17.4% increase from $147.8 million in the same period of 2024[187]. - Adjusted EBITDA for the three months ended September 30, 2025, was $9.3 million, compared to $2.3 million in the same period of 2024[187]. - The net loss for the three months ended September 30, 2025, was $54.1 million, compared to a net loss of $17.9 million in the same period of 2024[187]. Revenue Breakdown - Consignment revenue reached $134.4 million, representing a 15% increase compared to $116.9 million in the prior year[161]. - Direct revenue rose by $7.3 million, or 47%, to $22.9 million for the three months ended September 30, 2025, primarily due to higher sell-through of high-value inventory[191]. - Shipping services revenue increased by $1.0 million, or 7%, to $15,224,000 for the three months ended September 30, 2025, driven by a 7% increase in the number of orders[192]. - Direct revenue increased by $18.8 million, or 42%, to $63,877,000 for the nine months ended September 30, 2025, primarily driven by higher sell-through of high-value inventory[214]. - Shipping services revenue increased by $1.9 million, or 4%, to $48,054,000 for the nine months ended September 30, 2025, primarily due to a 6% increase in the number of orders[215]. Cost and Expenses - Total cost of revenue for the three months ended September 30, 2025, was $44.7 million, up from $37.0 million in the same period of 2024[187]. - Marketing expenses for the three months ended September 30, 2025, were $14.1 million, compared to $11.6 million in the same period of 2024[187]. - Operations and technology expenses increased to $70.7 million for the three months ended September 30, 2025, from $66.2 million in the same period of 2024[187]. - Selling, general and administrative expenses were $51.6 million for the three months ended September 30, 2025, compared to $47.5 million in the same period of 2024[187]. - Cost of direct revenue increased by $11.6 million, or 30%, to $38,970,000 for the nine months ended September 30, 2025, attributed to the increase in direct revenue[218]. Customer Metrics - Active buyers increased to 1,024 in Q3 2025, up from 958 in Q3 2024, indicating a growth in the customer base[161]. - Repeat consignors accounted for over 80% of Gross Merchandise Value (GMV) in both Q3 2025 and Q3 2024, highlighting strong customer loyalty[155]. - As of September 30, 2025, 16% of buyers also consigned items, while 49% of consignors made purchases, indicating a strong network effect within the marketplace[157]. Market and Operational Insights - The company continues to invest in technology and infrastructure, with approximately 1.4 million square feet of leased authentication centers in Arizona and New Jersey to support growth[158]. - The company expects operating expenses to decrease as a percentage of revenue over the longer term[182]. - Total gross margin decreased by 60 basis points for the three months ended September 30, 2025, compared to the same period in 2024[199]. - Operations and technology expenses increased by $12.1 million, or 6%, but decreased as a percentage of revenue from 45% to 41%[225][226]. - Selling, general and administrative expenses increased by $8.2 million, or 6%, and decreased as a percentage of revenue from 32% to 30%[227][228]. Financial Position and Debt - As of September 30, 2025, the company had cash and cash equivalents of $108.4 million and an accumulated deficit of $1,256.8 million[234]. - Net cash used in operating activities was $12.5 million, primarily due to a net loss of $3.0 million and cash outflows from operating assets and liabilities[240]. - 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[252]. - Cash requirements related to the 2031 Notes amount to $234.9 million, with $7.6 million expected to be paid within the next 12 months[258]. - The Company anticipates ongoing inflationary pressures that may affect costs and financial condition[261].