Rent the Runway(US:RENT)2025-12-12 14:16Financial Performance - Revenue for the third quarter of fiscal year 2025 was $87.6 million, representing a 15.4% year-over-year growth[154] - Net Income for the third quarter was $76.5 million, compared to a loss of $(18.9) million in the same period last year, resulting in a net income margin of 87.3%[154] - Total revenue, net for the three months ended October 31, 2025, was $87.6 million, an increase of $11.7 million, or 15.4%, compared to $75.9 million for the same period in 2024[203] - Subscription and Reserve rental revenue was $77.0 million for the three months ended October 31, 2025, an increase of $10.7 million, or 16.1%, compared to $66.3 million for the same period in 2024[204] - Net income for the three months ended October 31, 2025, was $76.5 million, compared to a net loss of $18.9 million for the same period in 2024[202] - Total revenue, net for the nine months ended October 31, 2025, was $238.1 million, an increase of $8.3 million, or 3.6%, compared to $229.8 million for the same period in 2024[224] - Subscription and Reserve rental revenue was $208.2 million for the nine months ended October 31, 2025, an increase of $7.3 million, or 3.6%, compared to $200.9 million for the same period in 2024[225] Subscriber Metrics - Active Subscribers increased to 148,916, a 12.4% year-over-year increase, while Total Subscribers reached 185,166, up 6.1% year-over-year[154] - Active Subscribers increased to 148,916 as of October 31, 2025, up from 132,518 a year earlier, driven by higher promotional activity and improved retention[179] - Average Active Subscribers rose to 147,645 for the three months ended October 31, 2025, compared to 130,796 for the same period in 2024[180] Profitability and Margins - Gross Profit for the third quarter was $25.9 million, with a gross margin of 29.6%, down from 34.7% in the prior year[154] - Gross Profit for the three months ended October 31, 2025, was $25.9 million, down from $26.3 million in 2024, with Gross Margins decreasing from 34.7% to 29.6%[183] - Adjusted EBITDA was $4.3 million for the three months ended October 31, 2025, down from $9.3 million in 2024, with margins decreasing from 12.3% to 4.9%[186] - Net income was $76.5 million for the three months ended October 31, 2025, compared to a net loss of $(18.9) million for the same period in 2024[245] Expenses and Costs - Total costs and expenses were $103.8 million for the three months ended October 31, 2025, an increase of $14.2 million, or 15.8%, compared to $89.6 million for the same period in 2024[206] - Fulfillment expenses were $24.0 million for the three months ended October 31, 2025, an increase of $2.6 million, or 12.1%, representing 27.4% of revenue[207] - Technology expenses were $10.5 million for the three months ended October 31, 2025, an increase of $1.8 million, or 20.7%, compared to $8.7 million for the same period in 2024[209] - General and administrative expenses were $22.7 million for the three months ended October 31, 2025, an increase of $1.5 million, or 7.1%, compared to $21.2 million for the same period in 2024[213] - Rental product depreciation and revenue share was $37.7 million for the three months ended October 31, 2025, an increase of $9.5 million, or 33.7%, compared to $28.2 million for the same period in 2024[215] Cash Flow and Debt - Cash and Cash Equivalents as of October 31, 2025, were $50.7 million, down from $74.1 million in the previous year[154] - Cash flows from operations for the nine months ended October 31, 2025, were $(3.6) million, compared to $11.5 million for the same period in 2024[257] - The company had total debt outstanding of approximately $159.1 million as of October 31, 2025, with no maturities within the next 12 months[263] - The company completed recapitalization transactions on October 28, 2025, reducing existing indebtedness by exchanging $100 million for new term loans and issuing 26,175,193 shares of Class A Common Stock[252] Strategic Plans and Market Conditions - The company plans to nearly double the new inventory added to its site in fiscal year 2025, driving substantial growth[151] - The company expects to incur higher purchases of rental products in fiscal year 2025 compared to fiscal year 2024 due to increased inventory[156] - The company faces significant macroeconomic uncertainties, including inflation and supply chain issues, which may impact consumer spending and operational costs[172] - The company plans to invest in customer experience and optimize shipping methods to drive growth and efficiencies despite rising costs[174] - Fulfillment expenses are expected to fluctuate due to competitive labor market pressures, with a focus on automation to improve operational efficiency[191] Other Financial Metrics - Gain on Debt Restructuring was $96.3 million for the three months ended October 31, 2025, recognized from the troubled debt restructuring completed in October 2025[221] - Gain on Debt Restructuring was $96.3 million for the nine months ended October 31, 2025, recognized from the troubled debt restructuring completed in October 2025[239] - The company reported net income from operations of $76.5 million for the three months ended October 31, 2025, primarily due to a Gain on Debt Restructuring of $96.3 million[250] - The 2023 Amended Temasek Facility eliminated all interest payments for six fiscal quarters and reduced the minimum liquidity maintenance covenant from $50 million to $30 million[251] - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to adopt new accounting guidance in line with private companies[268] - There were no material changes to the company's quantitative and qualitative disclosures about market risk in the three months ended October 31, 2025, compared to the 2024 Annual Report[269]