Rent the Runway(US:RENT)2025-12-12 13:04Subscriber Growth - Active subscribers increased by 12.4% year-over-year, reaching 148,916 at the end of Q3 2025[6] - Average active subscribers rose by 12.9% year-over-year, totaling 147,645[7] - The company anticipates double-digit growth in ending active subscribers for fiscal year 2025 compared to fiscal year 2024[10] Revenue Performance - Revenue for Q3 2025 was $87.6 million, a 15.4% increase from $75.9 million in Q3 2024[7] - Total revenue for the three months ended October 31, 2025, was $87.6 million, a 15.5% increase from $75.9 million in the same period of 2024[28] - Subscription and Reserve rental revenue increased to $77.0 million, up 16.8% from $66.3 million year-over-year[28] - For Q4 2025, the company expects revenue between $85 million and $87 million[10] Net Income and Gains - Net income for Q3 2025 included a one-time gain of $96.3 million from debt restructuring[7] - Net income for the nine months ended October 31, 2025, was $24.0 million, compared to a net loss of $56.5 million in the same period of 2024[30] - Net income for the three months ended October 31, 2025, was $76.5 million, compared to a loss of $18.9 million in the same period of 2024[34] - The company reported a gain on debt restructuring of $96.3 million for the three months ended October 31, 2025[28] Costs and Expenses - The company incurred total costs and expenses of $103.8 million for the three months ended October 31, 2025, compared to $89.6 million in the same period of 2024[28] - The company incurred $2.8 million in non-ordinary course legal fees related to securities lawsuits for the three months ended October 31, 2025[34] Profitability Metrics - Gross profit was $25.9 million, with a gross margin of 29.6%, down from 34.7% in Q3 2024[7] - Adjusted EBITDA was $4.3 million, with an adjusted EBITDA margin of 4.9%, compared to 12.3% in Q3 2024[7] - Adjusted EBITDA for the nine months ended October 31, 2025, was $6.6 million, down from $29.5 million in 2024[34] - Adjusted EBITDA Margin for the three months ended October 31, 2025, was 4.9%, down from 12.3% in 2024[34] Cash Flow and Assets - Free Cash Flow for the nine months ended October 31, 2025, was $(46.5) million, compared to $(9.3) million in 2024, indicating a significant decline[36] - Free Cash Flow Margin for the nine months ended October 31, 2025, was (19.5)%, compared to (4.0)% in 2024[36] - Cash and cash equivalents at the end of the period were $50.7 million, down from $77.4 million at the beginning of the year[26] - Total current assets decreased to $66.7 million as of October 31, 2025, from $93.9 million as of January 31, 2025[26] Debt and Liabilities - The company completed a transformative recapitalization, reducing total outstanding debt to $120 million and extending maturity to 2029[5] - Total liabilities decreased to $266.1 million as of October 31, 2025, from $422.5 million as of January 31, 2025[26] - The company reported a gain on debt restructuring of $(96.3) million for the nine months ended October 31, 2025[34] Customer Loyalty - Inventory-related churn decreased by nearly 30% year-over-year in Q3 2025, indicating improved customer loyalty[5] Future Expectations - Adjusted EBITDA margin expectations for fiscal year 2025 are not available due to high variability and complexity in excluded items[23]