Financial Data and Key Metrics Changes - Total debt reduced from approximately $319 million to approximately $120 million, with maturity extended to 2029 [4] - Revenue for Q3 2025 was $87.6 million, up 15.4% year-over-year, and up 8.3% quarter-over-quarter [19] - Adjusted EBITDA for Q3 2025 was $4.3 million or 4.9% of revenue, down from $9.3 million or 12.3% of revenue in Q3 2024 [22] - Free cash flow for Q3 2025 was negative $13.6 million, compared to negative $3.4 million in Q3 2024 [22] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue increased by $10.7 million or 16.1% year-over-year in Q3 2025, driven by higher average subscribers and average revenue per subscriber [19] - Inventory-related cancellations decreased by nearly 30% year-over-year in Q3 [5] - Revenue per subscriber increased, primarily due to a price increase and changes to late fee policies [8] Market Data and Key Metrics Changes - Ending active subscribers grew by 12.4% year-over-year, reaching 148,916 [18] - Average active subscribers during Q3 were 147,645, an increase of 12.9% year-over-year [18] - Customer engagement metrics such as net promoter score and app visits increased significantly, with average visits per subscriber up 34% year-over-year [6][7] Company Strategy and Development Direction - Focus on strategic recapitalization to strengthen the balance sheet and return to growth through inventory strategy and product innovation [4] - Emphasis on improving customer acquisition through organic community-driven channels and enhancing customer experience [12] - Plans to activate community engagement and leverage customer advocacy for growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved growth momentum and customer engagement [24] - Anticipated continued strong revenue growth in Q4 2025, with guidance for revenue between $323.1 million and $325.1 million for fiscal year 2025 [23] - Management acknowledged challenges with cash consumption due to inventory investments but expects improved cash flow generation over time [17] Other Important Information - The company has made significant changes to its app to enhance customer experience, resulting in increased engagement [9] - The introduction of community-driven content and ambassador programs has generated substantial impressions and referrals [13] Q&A Session Summary Question: What are the expectations for revenue growth in Q4? - Management expects revenue to be between $85 million and $87 million for Q4 2025 [23] Question: How is the company managing cash flow amid increased inventory investments? - Management noted that cash consumption has increased due to inventory investments but expects improved cash flow generation in the future [17]

Core Viewpoint - The clothing rental market is experiencing significant growth driven by sustainable consumption and the sharing economy, particularly among younger consumers seeking personalized and unique fashion options [1][10]. Group 1: Market Trends - The clothing rental market is expanding into various consumer sectors, with a notable increase in demand for unique attire, especially in tourist areas and among students [1][5]. - In tourist spots like Nanjing, rental shops offering traditional costumes are thriving, enhancing visitors' cultural experiences [3]. - The rise of online short dramas has led to increased demand for diverse costumes and props, prompting rental businesses to expand their inventories [7]. Group 2: Consumer Behavior - Students are a significant demographic for clothing rentals, as they often require costumes for events and activities, making rental services a cost-effective solution [5]. - Wedding attire, particularly wedding dresses, remains the largest segment in the rental market, with a 109% year-on-year increase in search volume for wedding dress rentals [9]. Group 3: Future Opportunities - The clothing rental industry is projected to continue its growth, with an online platform reporting a user base exceeding 50 million by mid-2025 and a 52% increase in order volume [12]. - Experts suggest exploring innovative business models such as "rental + subscription" and "rental + purchase" to meet diverse consumer needs and enhance the rental market's efficiency [12].