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]

Financial Data and Key Metrics Changes - The company ended Q1 2025 with 147,157 active subscribers, up approximately 1% year over year, and the highest number of ending subscribers in company history [31] - Total revenue for Q1 2025 was $69.6 million, down $5.4 million or 7.2% year over year [31] - Gross margins decreased to 31.5% in Q1 2025 from 37.9% in Q1 2024, reflecting higher revenue share costs and fulfillment costs [33] - Adjusted EBITDA for Q1 2025 was negative $1.3 million, compared to positive $6.5 million in Q1 2024 [34] - Free cash flow for Q1 2025 was negative $6.4 million, a decrease from negative $1.4 million in Q1 2024 [35] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue decreased by 6.2% year over year in Q1 2025, primarily due to lower average revenue per subscriber [32] - Fulfillment costs were $20.4 million in Q1 2025, slightly down from $20.6 million in Q1 2024 [32] - The company launched 36 new brands and over 1,000 new styles, resulting in a 24% year-over-year increase in inventory volume received [8][9] Market Data and Key Metrics Changes - The company reported a 23% higher share of views, 46% more hearts, and a 14% higher love rate for its spring 2025 inventory compared to the previous year [9] - April add-on gross bookings increased by 11% year over year, indicating higher customer engagement [9] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes increasing inventory breadth and depth, innovating products, and enhancing customer service [4][5] - Plans for Q2 2025 include launching over 40 new brands and posting over 2,700 new styles [12] - The company aims to improve customer retention through personalized services and a new rewards program [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their inventory and product strategies, noting the strongest quarterly customer retention in four years [23] - The company anticipates continued improvement in subscriber growth and retention throughout fiscal year 2025 [30] - Management acknowledged the uncertain environment but emphasized the value of renting over buying for consumers [38] Other Important Information - The company has shifted its marketing strategy towards transparency and community engagement, resulting in a 163% increase in social media engagement [21] - The company is planning to scale customer service initiatives, including a concierge service for new and rejoining customers [16][18] Q&A Session Summary Question: Why has it taken until fiscal year 2025 to implement these strategies? - Management explained that previous focus was on managing cash consumption and reducing costs, which limited inventory purchases until now [26][28] Question: What are the expectations for subscriber growth and revenue? - Management expects double-digit growth in ending active subscribers for fiscal year 2025, with revenue growth lagging behind due to higher promotional spending [36][30] Question: How does the company plan to handle potential tariff impacts? - Management stated that their guidance does not factor in potential tariff impacts, as they have already placed orders for most inventory receipts for fiscal year 2025 [37]