Core Insights - Rent the Runway has successfully transformed its business model over 15 years, creating a new market category in clothing rental and achieving nearly break-even operations [1] - The company is focusing on a multi-year transformation plan aimed at improving customer satisfaction and loyalty through significant inventory investments [6][17] - Financial discipline has led to a substantial improvement in cash position, with a decline in cash consumption from $70.5 million in fiscal year 2023 to $6.6 million in fiscal year 2024 [5] Financial Performance - Total revenue for Q4 2024 was $76.4 million, reflecting a year-over-year increase of 0.8% [33] - Average active subscribers decreased by 2.1% year-over-year, with ending active subscribers at 119,778, down 4.9% from the previous year [32] - Adjusted EBITDA for Q4 2024 was $17.4 million, representing 22.8% of revenue, an improvement from 14.8% in the prior year [35] Inventory Strategy - The company plans to double its inventory units year-over-year in 2025, with a focus on high-demand brands and exclusive designs [17][26] - An investment in inventory is expected to enhance customer loyalty, which improved by 8% in 2024 due to better inventory depth [15][54] - The "Share by RTR" model is projected to account for approximately 62% of total inventory purchases in fiscal year 2025, significantly reducing upfront costs [25][31] Customer Engagement - Rent the Runway is enhancing customer service by restructuring teams to focus on proactive engagement, with 50% of new customers receiving personal follow-up calls [11][12] - The company has initiated various customer feedback initiatives, including town hall meetings and direct communication with leadership [13][19] - A new personalized onboarding experience and technology updates are being rolled out to improve customer interactions [22][21] Future Outlook - The company anticipates double-digit growth in active subscribers for fiscal year 2025, with cash consumption expected to be between negative $30 million and negative $40 million [41] - The focus will remain on disciplined growth rather than growth at all costs, with a commitment to maintaining cost efficiency while expanding inventory [24][39] - Rent the Runway aims to evolve into a discovery engine for designer fashion, leveraging its unique inventory acquisition strategies to enhance customer experience [28][29]