Core Insights - Rent the Runway, Inc. is on the verge of achieving profitability for the first time in its history [1] Company Overview - The company operates in a highly competitive market where its pricing power appears to be limited [1]

Financial Performance - Q3 2025 - Total revenue reached $87.6 million, a 15% year-over-year increase[9] - Active subscribers increased by 12% year-over-year, reaching 148900[9, 10] - Total subscribers increased by 6% year-over-year, reaching 185200[9] - Gross profit was $25.9 million with a margin of 29.6%, a 5 percentage point decrease year-over-year[9] - Net income was $76.5 million with a margin of 87.3%, which includes a one-time $96.3 million gain on debt restructuring[9] - Adjusted EBITDA was $4.3 million with a margin of 4.9%, a 7 percentage point decrease year-over-year[9] Recapitalization and Debt - A $20 million cash contribution was made to the balance sheet by investors[4] - Total outstanding debt balance was reduced to $120 million and its maturity extended to 2029[4] - An incremental amount of approximately $12.5 million of primary gross proceeds was received in a concurrent rights offering[4] Q4 2025 and FY2025 Guidance - Q4 2025 total revenue is projected to be between $85 million and $87 million[55] - Q4 2025 adjusted EBITDA margin is expected to be between 11% and 13%[55] - FY2025 total revenue is projected to be between $323.1 million and $325.1 million[55]

Core Insights - Rent the Runway reported a 12.4% year-over-year increase in active subscribers and a 15.4% increase in revenue for Q3 2025, indicating strong business growth [1][12] - The company successfully closed a transformative recapitalization plan, which significantly improved its balance sheet by reducing debt and extending maturity dates [2][5] - A community-driven organic growth strategy has been expanded to enhance brand awareness and customer acquisition [5][12] Financial Performance - Revenue for Q3 2025 was $87.6 million, up from $75.9 million in Q3 2024, marking a 15.4% increase [12] - The number of ending active subscribers reached 148,916, a 12.4% increase from 132,518 in the previous year [12] - Net income for Q3 2025 was $76.5 million, compared to a net loss of $18.9 million in Q3 2024, reflecting a significant turnaround [12][30] Strategic Initiatives - The company made its largest inventory investment in history, nearly doubling the new inventory added to its site, which has driven substantial growth [2][5] - Subscriber retention improved, leading to a nearly 30% reduction in inventory-related churn year-over-year [5] - New community-driven initiatives, such as the RTR Muse and City Ambassador programs, were launched to enhance customer engagement and acquisition [5][12] Operational Metrics - Average active subscribers increased by 12.9% year-over-year, reaching 147,645 [12] - Gross profit for Q3 2025 was $25.9 million, with a gross margin of 29.6%, down from 34.7% in Q3 2024 [12] - Adjusted EBITDA for Q3 2025 was $4.3 million, down from $9.3 million in the same quarter last year, with an adjusted EBITDA margin of 4.9% [12][36] Future Outlook - For the fiscal fourth quarter of 2025, Rent the Runway expects revenue between $85 million and $87 million and an adjusted EBITDA margin between 11% and 13% [13] - The company anticipates continued double-digit growth in ending active subscribers compared to fiscal year 2024 [13]

Financial Data and Key Metrics Changes - Reported revenue for Q4 2025 was $712 million, normalized to approximately $660 million when excluding a $52 million benefit from an additional operating week, representing a year-over-year decline of $24 million or 3.5% [13][14] - Adjusted EBITDA for Q4 was $65 million, with an adjusted margin of 9.1%, down from 11.8% in the same quarter last year [16][20] - The effective tax rate for the full year 2025 was 9.2%, with an expected range of 25-30% for fiscal 2026 [15][16] Business Line Data and Key Metrics Changes - Rental revenue decreased by $18 million, while direct sales revenue fell by $5 million, contributing to the overall revenue decline [13][14] - Business retention measured in revenue dollars was 91.8% at the end of Q4, remaining flat compared to the previous quarter [14] Market Data and Key Metrics Changes - The normalized revenue impact from churn or lost business was approximately $60 million compared to the same quarter in the prior year [14] - The company plans to stabilize revenue by implementing strategic pricing and increasing penetration with existing customers [21][67] Company Strategy and Development Direction - The company has initiated a multi-year business transformation plan focused on commercial excellence, operational excellence, and asset and network optimization, expected to be substantially completed by the end of fiscal 2027 [10][18] - The transformation plan aims to generate run-rate operating cost savings of at least $75 million by the end of 2026 [18][19] - The company is committed to improving customer service quality and operational efficiency to drive sustainable, profitable growth [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the transformation plan, indicating that 2026 will mark the beginning of a stronger, more resilient company [25] - The company acknowledges challenges related to customer churn and aims to improve retention as a key driver of long-term revenue stability [23][66] - The near-term focus is on increasing profitability and cash flow to support stronger financial performance [22] Other Important Information - The company generated $31 million in operating cash flow and $16 million in free cash flow during the quarter, reflecting positive improvement [17] - Net debt at the end of the fiscal quarter was $1.34 billion, with no debt maturities until 2028 [17] Q&A Session Summary Question: Employee engagement levels and turnover trends - Management acknowledged that employee engagement levels are not at their highest due to recent challenges but emphasized the importance of convincing employees that a new day is coming at the company [81] Question: Pricing strategy implementation - The company plans to align pricing decisions with the cost of service to create value, moving away from the previous approach that led to customer churn [86] Question: Capacity consolidation and network optimization - Management indicated that optimizing plant operations is the priority before making decisions on consolidating delivery networks, emphasizing the importance of plant performance [38][60] Question: Free cash flow guidance and capital needs - The company expects free cash flow to be between $50 million and $60 million, with no immediate need to raise capital for planned investments [46][53]

Financial Data and Key Metrics Changes - Reported revenue for Q4 2025 was $712 million, normalized to approximately $660 million when excluding a $52 million benefit from an additional operating week, representing a decline of $24 million or 3.5% year-over-year [12][13] - Adjusted EBITDA for Q4 was $65 million, with an adjusted margin of 9.1%, down from 11.8% in the same quarter last year [16][20] - Full-year effective tax rate for 2025 was 9.2%, with an expected range of 25-30% for 2026 [15][16] Business Line Data and Key Metrics Changes - Rental revenue decreased by $18 million, while direct sales revenue fell by $5 million, contributing to the overall revenue decline [12][13] - Business retention measured in revenue dollars was 91.8% at the end of Q4, flat compared to the previous quarter [13] Market Data and Key Metrics Changes - The normalized revenue impact from churn or lost business was approximately $60 million compared to the same quarter in the prior year [12][13] - The company plans to stabilize revenue by implementing strategic pricing and increasing penetration with existing customers [20][67] Company Strategy and Development Direction - The company has initiated a multi-year business transformation plan focusing on commercial excellence, operational excellence, and asset and network optimization [4][18] - The transformation plan aims to generate run-rate operating cost savings of at least $75 million by the end of 2026 [18][19] - The company is committed to improving customer service quality and operational efficiency to drive sustainable growth [10][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the transformation plan, emphasizing that 2026 will mark the beginning of a stronger, more resilient company [22][24] - The company anticipates revenue for fiscal 2026 to be flat to down 2% compared to normalized fiscal 2025 revenue, with adjusted EBITDA expected to range from $285 million to $315 million [19][20] Other Important Information - The company generated $31 million in operating cash flow and $16 million in free cash flow during the quarter, reflecting improvements over the previous quarter [17] - Net debt at the end of the fiscal quarter was $1.34 billion, with no debt maturities until 2028 [17] Q&A Session Summary Question: Regarding the cultural transformation and team readiness - Management acknowledged the importance of culture in the transformation and expressed confidence in having the right team in place to execute the strategic transformation [26][32] Question: Financial framework for mid to long term growth - Management indicated that more details about financial performance beyond 2026 would be available as the company executes its plans in the early quarters of 2026 [33] Question: Logistics and network rationalization - Management clarified that the focus is on optimizing existing plants before making decisions about consolidating capacity in certain regions [35][36] Question: Free cash flow guidance for fiscal 2026 - Management provided details on the assumptions behind the $50-$60 million free cash flow guidance, including capital expenditures and working capital considerations [46][51] Question: Employee engagement and turnover trends - Management recognized the challenges faced by employees and emphasized the need to improve engagement levels as part of the transformation [78][81] Question: Strategic pricing initiatives - Management highlighted the differences in the new pricing strategy, focusing on aligning service quality with pricing decisions to reduce churn and improve customer retention [70][86]

Core Insights - Rent the Runway, Inc. has successfully completed a recapitalization transaction aimed at improving its financial position by reducing debt and extending maturity [1][2][3] Financial Position - The recapitalization involved converting a significant portion of existing debt into common equity and raising $20 million in cash from an investor group [2] - Following the recapitalization, the total outstanding debt was reduced to $120 million, with maturity extended to 2029 [2] - An additional $12.5 million was raised through a concurrent rights offering [2] Strategic Goals - The CEO of Rent the Runway emphasized that this recapitalization is a crucial milestone for the company's transformation, allowing it to focus on customer service and profitable growth [3] - The company aims to continue its mission of reinventing how women access fashion while maintaining its status as a public company trading under the ticker symbol "RENT" on Nasdaq [3] Company Overview - Founded in 2009, Rent the Runway is disrupting the fashion industry by offering a subscription-based model for renting and purchasing designer items [6] - The platform provides a wide range of products, including evening wear, workwear, and activewear, through its "Closet in the Cloud" concept [6] - The company has received multiple accolades for its innovation and impact in the industry, including being named to CNBC's "Disruptor 50" list five times [7]

TABLE OF CONTENTS As filed with the Securities and Exchange Commission on September 29, 2025 Registration No. 333-290358 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 RENT THE RUNWAY, INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) (Primary Standard Industrial Classification Code Number) Delaware 7389 80-0376379 (I.R.S. Emplo ...

TABLE OF CONTENTS As filed with the Securities and Exchange Commission on September 18, 2025 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 RENT THE RUNWAY, INC. Copies to: Nicole Brookshire Paul Scrivano Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000 (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Orga ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $80.9 million, an increase of $2 million or 2.5% year-over-year, and up $11.3 million or 16.2% quarter-over-quarter [17] - Adjusted EBITDA for Q2 2025 was $3.6 million or 4.4% of revenue, compared to $13.7 million or 17.4% of revenue in Q2 2024, primarily due to higher revenue share expenses [19] - Free cash flow for Q2 2025 was negative $26.5 million, a decrease from negative $4.5 million in Q2 2024, mainly due to lower adjusted EBITDA and higher purchases of rental products [20] Business Line Data and Key Metrics Changes - Subscription and Reserve rental revenue increased by $0.7 million or 1% year-over-year in Q2 2025, primarily due to higher average subscribers [18] - Fulfillment costs were $22.5 million in Q2 2025, up from $20.6 million in Q2 2024, reflecting higher transportation and warehouse processing costs [18] - Gross margins decreased to 30% in Q2 2025 from 41.1% in Q2 2024, impacted by higher revenue share costs and fulfillment costs [19] Market Data and Key Metrics Changes - Active subscribers at the end of Q2 2025 were 146,400, a 13.4% year-over-year increase, showing significant growth compared to previous quarters [8][17] - Year-to-date, the company added 2,200 new styles and 56 new brands to the platform, enhancing customer experience [9] Company Strategy and Development Direction - The company announced a recapitalization plan aimed at reducing total debt from over $340 million to approximately $120 million, enhancing financial flexibility [4][5] - The strategy focuses on inventory growth, product innovation, and improving customer experience, with significant investments made in inventory this fiscal year [15][16] - The company plans to continue adding inventory and enhancing customer engagement through organic marketing strategies [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position, indicating that the recapitalization will allow for sustainable growth and improved customer care [22] - The company expects revenue for Q3 2025 to be between $82 million and $84 million, with adjusted EBITDA margins projected to be between negative 2% and 2% of revenue [20] - Management believes that the business is showing improved momentum, with a focus on prudent investment management to drive growth [22] Other Important Information - The company implemented a price increase for subscription plans, with an average increase of $2 per item, reflecting inflationary pressures [13][14] - Engagement with new inventory has significantly increased, with metrics such as share of views up 84% year-over-year [10] Q&A Session Summary Question: What are the expectations for subscriber growth moving forward? - Management indicated that they expect double-digit growth in ending active subscribers for fiscal year 2025, driven by improved inventory and customer experience [21] Question: How will the recapitalization impact the company's financials? - The recapitalization is expected to significantly reduce debt, lower interest expenses, and extend maturity to 2029, providing a stronger financial position [16]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $80.9 million, an increase of $2 million or 2.5% year-over-year, and up $11.3 million or 16.2% quarter-over-quarter [17] - Adjusted EBITDA for Q2 2025 was $3.6 million, or 4.4% of revenue, compared to $13.7 million, or 17.4% of revenue in Q2 2024 [19] - Free cash flow for Q2 2025 was negative $26.5 million, compared to negative $4.5 million in Q2 2024 [20] Business Line Data and Key Metrics Changes - Subscriber growth ended Q2 with 146,400 active subscribers, a 13.4% year-over-year increase, accelerating from -4.9% in Q4 2024 and 0.9% in Q1 2025 [8][15] - Subscription and Reserve rental revenue increased by $0.7 million, or 1% year-over-year in Q2 2025, primarily due to higher average subscribers [18] - Revenue share units from existing partners were up 40% year-over-year, and total revenue share units increased by 119% year-over-year [10] Market Data and Key Metrics Changes - Engagement with new inventory in Q2 overperformed last year across every key metric, including share of views up 84% year-over-year and hearts per style up 15% year-over-year [10] - Organic channel acquisitions had the best performing quarter in years, with engagement on social media channels up 796% and views up 175% year-over-year [12] Company Strategy and Development Direction - The company announced a recapitalization plan aimed at reducing total debt from over $340 million to approximately $120 million, which is expected to strengthen the balance sheet and provide financial flexibility [4][5] - The strategy focuses on capturing subscribers through a new inventory strategy, increased product innovation, and improved customer connection [6][8] - The company plans to continue adding inventory and enhancing customer experience, with a focus on organic growth through community engagement [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the company is on the right track to generate strong medium and long-term performance, with improved momentum evidenced by subscriber growth [21] - The company expects revenue for Q3 2025 to be between $82 million and $84 million, with adjusted EBITDA margins projected to be between negative 2% and 2% of revenue [20] - Management believes the recapitalization transaction is a key step forward for continued investment in customer experience [16] Other Important Information - The company implemented a price increase for subscription plans on August 1, with an average increase of $2 per item, and the most popular plan increasing from $144 to $164 per month, a 14% increase [13][14] - The company is excited about the future and views the recapitalization as a new chapter, akin to an "IPO 2.0" [5][6] Q&A Session Summary Question: What are the expectations for subscriber growth moving forward? - Management indicated that they expect double-digit growth in ending active subscribers for fiscal year 2025 [20] Question: How will the recapitalization impact the company's operations? - The recapitalization is expected to significantly reduce debt, lower interest expenses, and provide cash infusion for continued investment in inventory and customer experience [16] Question: What are the anticipated challenges in the upcoming quarters? - Management acknowledged that free cash flow is expected to be lower than negative $40 million due to costs associated with the recapitalization transaction [20]