Core Insights - The RealReal will release its financial results for Q2 2025 on August 7, 2025, after market close [1] - A conference call to discuss the financial results will take place at 2:00 p.m. Pacific Time [1] Company Overview - The RealReal is the largest online marketplace for authenticated resale luxury goods, boasting over 40 million members [2] - The company employs a rigorous authentication process with hundreds of in-house experts, including gemologists and brand authenticators [2] - The RealReal supports the circular economy by giving new life to luxury items across various categories, including fashion, jewelry, art, and home [2] - The company offers services such as free virtual appointments, in-home pickup, and direct shipping to facilitate the selling process for consignors [2]

Core Insights - The RealReal has successfully paid off the remaining $26,749,000 of its 3% Convertible Senior Notes due 2025, marking a significant step in reducing its overall debt [1][2] - The company has reduced its total indebtedness by $63 million year to date and $81 million over the last 16 months, indicating a strong focus on deleveraging [1][2] - The CFO highlighted that the paydown enhances financial flexibility and supports strategic growth initiatives, reinforcing the company's position in the luxury resale market [2] Company Overview - The RealReal is the largest online marketplace for authenticated resale luxury goods, boasting over 38 million members [3] - The company employs a rigorous authentication process with hundreds of in-house experts to ensure the reliability of its platform for buying and selling luxury items [3] - The RealReal promotes sustainability by supporting the circular economy, offering services such as free virtual appointments, in-home pickups, and direct shipping for consignors [3]

Core Insights - The RealReal has opened its 16th store in Summit, New Jersey, continuing its expansion in the tri-state area and enhancing its presence in the luxury resale market [1][3] Store Design and Experience - The Summit store features a design that combines sustainability and luxury, with a color palette of burgundy and brass, light wood flooring, and a unique installation by textile artist Kiva Motnyk [2] - The store aims to be a destination for both shopping and inspiration, showcasing a curated mix of vintage furniture, art, and décor [2] Community Engagement - The Chief Merchandising Officer of The RealReal highlighted the success of previous pop-up events in the area, indicating strong community demand for a permanent store [3] Company Overview - The RealReal is the largest online marketplace for authenticated resale luxury goods, boasting 38 million members and a rigorous authentication process [4] - The company supports the circular economy by giving new life to luxury items across various categories, including fashion, jewelry, art, and home goods [4] Store Offerings and Services - The store provides personalized consultations and valuations for luxury items, along with a constantly refreshed selection of authenticated goods [6] - The RealReal offers various services to consignors, including free virtual appointments, in-home pickup, and direct shipping, ensuring a seamless selling experience [4]

Q1 2025 FINANCIAL RESULTS May 8, 2025 Q1 2025 FINANCIAL RESULTS Safe Harbor/Disclosure Statement These materials contain forward-looking statements relating to, among other things, the future performance of The RealReal that are based on the company's current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "target," "contemplate," "p ...

Financial Data and Key Metrics Changes - In Q1 2025, GMV increased by 9% year over year to $490 million, while revenue rose by 11% to $160 million [25][8] - Adjusted EBITDA reached $4 million, an increase of $6 million compared to Q1 of the previous year, marking the third consecutive quarter of positive adjusted EBITDA [29][24] - Gross margin improved by 40 basis points year over year to 75%, driven by operational efficiencies [28][8] Business Line Data and Key Metrics Changes - Consignment revenue increased by 7%, while direct revenue surged by 61% compared to Q1 2024 [25] - Average order value (AOV) rose by 5% year over year to $564, indicating strong buyer engagement [8][57] - The company reported its highest number of new consignors in over two years, contributing to supply growth [8][9] Market Data and Key Metrics Changes - Active buyers increased by 7% on a trailing twelve-month basis, reaching 985,000 [25] - The company expects direct revenue to remain between 10% to 15% of total revenues going forward [26][46] Company Strategy and Development Direction - The company is focused on three strategic pillars: unlocking supply through a growth playbook, driving operational efficiencies, and obsessing over service [9][24] - The "Get Paid Now" program aims to enhance direct revenue by allowing consignors to receive upfront payments for high-demand items [14][26] - The company is leveraging AI and automation to improve operational efficiencies and customer experience [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainties in the macroeconomic environment, particularly due to its unique position in the luxury resale market [5][32] - The company anticipates that rising prices in the primary market could motivate consumers to monetize their closets, potentially increasing supply [88][87] - Guidance for Q2 2025 includes GMV expectations of $476 million to $486 million, reflecting 9% growth year over year [32][30] Other Important Information - The company ended Q1 2025 with $154 million in cash and cash equivalents [30] - Operating cash flow for Q1 was negative $28 million due to timing of incentive payments and working capital seasonality [30] Q&A Session Summary Question: Can you provide context around the improvements in direct gross margin? - Management noted that direct revenues consist of out-of-policy returns and vendor purchases, with the "Get Paid Now" initiative significantly improving profitability, achieving a margin of 25.5% compared to 3% last year [37][27] Question: What signals are being observed in consumer behavior amid macro uncertainty? - Management indicated that consumer health has been resilient, with consistent strength in buyer engagement and new consignor growth [39][41] Question: Is there seasonality in direct revenue as a percentage of total revenue? - Management confirmed that direct revenue is expected to remain between 10% to 15% of total revenues without inherent seasonality [46][46] Question: How did the revenue mix play out in Q1? - The revenue mix was consistent with expectations, with direct revenue comprising about 10% to 15% of total revenue [82][81] Question: What is the outlook for the second quarter revenue guidance? - Management reiterated that the guidance reflects a consistent growth pattern, with revenue expected to grow by 9% year over year [92][93]