The Economics of Resale, From Investment Jewelry to Nostalgic Comebacks SAN FRANCISCO, Sept. 04, 2025 (GLOBE NEWSWIRE) -- The RealReal (Nasdaq: REAL) – the world’s largest online marketplace for authenticated resale luxury goods – today released its annual Resale Report. For the past 14 years, The RealReal has been at the forefront of a cultural shift, redefining luxury resale as both desirable and accessible. With a community of more than 40 million members, the company enables people to discover pieces th ...

Financial Data and Key Metrics Changes - The company reported a record GMV of $5.04 billion and record revenue of $165 million, both up 14% year over year [8][20] - Adjusted EBITDA was $6.8 million, representing a 4.1% margin, which was a substantial beat versus expectations [9][23] - Gross profit for Q2 was $123 million, with a gross margin of 74.3%, an increase of 20 basis points year over year [21][22] - Operating expenses were $133 million, improved by 690 basis points year over year as a percentage of revenue [22][23] - The company ended the quarter with $109 million in cash and cash equivalents, and reduced total debt by $27 million [24][25] Business Line Data and Key Metrics Changes - Consignment revenue grew 14%, while direct revenue increased 23% compared to the previous year, representing 12% of total revenue [20][21] - The consignment gross margin was 89.3%, an improvement of 93 basis points year over year [21][22] - Direct gross margin was 16.2%, fluctuating based on the category mix of products sold [21] Market Data and Key Metrics Changes - The active buyer base increased by 6% on a trailing twelve-month basis, exceeding 1 million active buyers [20] - The company noted that 53% of its customers are millennials and Gen Z, indicating a strong generational appeal [7] Company Strategy and Development Direction - The company is focused on a growth playbook centered on sales, marketing, and stores, with a new sales team compensation plan emphasizing retail value [10] - The strategy includes leveraging AI for operational efficiency and enhancing customer engagement through innovative features [13][16] - The company is expanding its dropship initiative to include jewelry, aiming to partner with larger luxury good aggregators [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of the business, with expectations for continued growth in Q3 and Q4 [32][30] - The company raised its full-year guidance, expecting GMV in the range of $2.03 billion to $2.045 billion, and revenue between $667 million and $674 million [26][27] - Management highlighted the favorable cash dynamics of the business model, anticipating strong positive free cash flows in the second half of the year [25][29] Other Important Information - The company is actively addressing counterfeiting issues in luxury goods through collaboration with law enforcement and proprietary technology [14] - The introduction of the reconsigned program has strengthened supply and created a circular loop for luxury assets [11] Q&A Session Summary Question: Can you comment on the cadence seen over the past couple of months? - Management noted that momentum has kept pace in Q3, with double-digit new seller growth continuing [32] Question: How should we think about the take rate and gross margin going forward? - Management explained that the take rate is influenced by the average order value, which was up 8%, and that consignment gross margins remain strong [36][37] Question: Can you elaborate on the expansion to luxury vendors and international consignors? - Management indicated that the dropship channel is still in early stages but has potential for growth, especially with international partners [42] Question: What drove the increase in new consignors? - Management attributed the growth to marketing reinvestment and the effectiveness of the growth playbook, including the reconsign feature [51][52] Question: How is Athena impacting operational efficiency? - Management stated that Athena is currently processing 20% of items, with plans to increase to 30-40% by year-end, aiming to reduce costs per unit [55][88]

Q2 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," "project," "believe," "estimate," "predi ...

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]

Financial Performance - GMV reached $490 million, a 9% year-over-year increase, with fine jewelry sales showing strong growth[25] - Revenue increased by 11% year-over-year, driven by healthy supply trends and strong sell-through[30] - Adjusted EBITDA improved by $6 million year-over-year, representing a 410 basis points increase as a percentage of revenue[32] - Gross margin increased by 40 basis points year-over-year due to operating efficiencies[33] Operational Efficiency - Operating expenses improved by 410 basis points compared to the prior year period[22] - Athena, the AI-driven intake process, processed 10% of items, reducing processing time by up to 20% in some cases[22] - Algorithmic pricing modules were applied to over 85% of items[22] User Engagement - Active buyers increased by 7% year-over-year on a trailing 12-month basis[27] 2025 Outlook - The company projects GMV to be between $196 billion and $199 billion for the full year 2025[34] - The company projects revenue to be between $645 million and $660 million for the full year 2025[34] - The company projects Adjusted EBITDA to be between $20 million and $30 million for the full year 2025[34]

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]