The RealReal(US:REAL)2026-02-26 21:38Financial Performance - In 2025, the Gross Merchandise Value (GMV) reached $2,130,007, an increase of 16.4% from $1,829,463 in 2024[199] - The Net Merchandise Value (NMV) for 2025 was $1,614,120, up 16.7% from $1,382,875 in 2024[199] - Total revenue for 2025 was $692.8 million, up from $600.5 million in 2024, marking a significant growth[220] - The gross profit for 2025 was $516.8 million, compared to $447.5 million in 2024[220] - The net loss for 2025 was $41.8 million, an improvement from a net loss of $134.2 million in 2024[220] - Adjusted EBITDA for the year ended December 31, 2025, was $42.1 million, compared to $9.3 million in 2024 and a loss of $55.2 million in 2023[269] - The net loss for the year ended December 31, 2025, was $41.8 million, an improvement from a loss of $134.2 million in 2024 and $168.5 million in 2023[269] Revenue Breakdown - Consignment revenue increased to $535,877 in 2025, representing a growth of 13.2% compared to $473,396 in 2024[199] - Direct revenue rose by $26.5 million, or 41%, in 2025 compared to 2024, primarily due to higher sales from businesses and individual sellers[224] - Shipping services revenue increased by $3.4 million, or 5%, in 2025 compared to 2024, attributed to a 7% increase in the number of orders[226] - Consignment revenue increased by $62.5 million, or 13%, in 2025 compared to 2024, driven by a 15% increase in consignment GMV[222] Operational Metrics - The number of active buyers grew to 1,056 in 2025, a 8.6% increase from 972 in 2024[199] - The Average Order Value (AOV) rose to $594 in 2025, reflecting a 9% increase from $545 in 2024[199] - The online marketplace sell-through ratio was over 80% in 2025, indicating strong demand relative to supply[186] - Repeat consignors accounted for over 80% of GMV in both 2025 and 2024, highlighting the importance of existing consignor relationships[187] Expenses and Costs - Operations and technology expense increased by $15.1 million, or 6%, in 2025 compared to 2024, driven by higher employee costs[236] - Marketing expense rose by $8.0 million, or 14%, in 2025 compared to 2024, primarily due to increased advertising costs[234] - Selling, general and administrative expense increased by $13.9 million, or 7%, in 2025 compared to 2024, primarily due to increased employee costs[238] - The total cost of revenue was $176.0 million in 2025, up from $153.0 million in 2024[220] - Operations and technology expense decreased to 40% of revenue in 2025 from 43% in 2024 due to increased consignment revenue and improved operating efficiencies[237] - Selling, general and administrative expenses decreased to 29% of revenue in 2025 from 31% in 2024[239] Cash and Debt Management - As of December 31, 2025, the company had cash and cash equivalents of $151.2 million and an accumulated deficit of $1,295.6 million[246] - Net cash provided by operating activities was $37.0 million in 2025, with a net loss of $41.8 million adjusted by $88.1 million of non-cash inflows[252] - Cash requirements related to operating leases as of December 31, 2025, were $104.6 million, with $30.1 million expected to be paid within the next 12 months[277] - Cash requirements for Convertible Senior Notes as of December 31, 2025, totaled $281.3 million, with $8.1 million due within the next 12 months[277] - The Company issued $135.0 million in aggregate principal amount of 4.25%/8.75% PIK/Cash Senior Secured Notes due 2029, with a total interest rate of 13.00% per annum[263] Market and Economic Conditions - The Company anticipates ongoing inflationary pressures that may affect costs and financial performance[283] - The fair value of the 2029 Notes was estimated using projected future payments discounted at the effective yield, highlighting the critical nature of this estimate[279] Other Financial Activities - The company incurred a loss of $35.8 million due to the increase in the fair value of warrants in 2025, a 48% increase from the previous year[242] - Gain on extinguishment of debt increased by $36.6 million, or over 100%, in 2025 compared to 2024[243] - Interest income decreased by $3.7 million, or 46%, in 2025 due to lower average cash balances[244] - Interest expense increased by $6.3 million, or 30%, in 2025 due to the full-period impact of the 2029 Notes and the issuance of the 2031 Notes[245] - The Company recorded a gain on extinguishment of debt of $37.1 million in February 2025 and $3.7 million in August 2025 due to debt exchanges[278] - The Company issued Warrants to acquire up to 7,894,737 shares of common stock at an exercise price of $1.71, subject to adjustments[263]