The RealReal (NasdaqGS:REAL) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Company ParticipantsAjay Gopal - CFOCaitlin Howe - SVP of FinanceJay Sole - Managing DirectorRati Levesque - President and CEOConference Call ParticipantsAnna Glaessgen - Senior Research AnalystAshley Owens - VP and Equity Research AnalystBobby Brooks - VP and Senior Research AnalystDylan Carden - Senior AnalystIke Boruchow - Managing Director and Senior Analyst for Retailing, Specialty Softlines and E-commerceMark Altschwager ...

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved $616 million in GMV, representing a 22% growth year-over-year, with an Adjusted EBITDA margin of 11% [4][13] - Full year GMV reached $2.13 billion, a 16% increase compared to the previous year, with revenue of $693 million, up 15% [17][18] - Adjusted EBITDA for the full year was $42 million, or 6.1% of total revenue, reflecting a 450 basis points increase year-over-year [18][21] Business Line Data and Key Metrics Changes - Q4 total revenue was $194 million, an 18% increase, with consignment revenue up 16% and direct revenue up 39% year-over-year [14][16] - Active buyer growth accelerated to 9% on a trailing 12-month basis, with orders up 10% and average order value increasing by 11% [15][16] - The take rate in Q4 was 36.5%, a decline of 120 basis points year-over-year, attributed to a favorable mix shift towards higher value items [15][16] Market Data and Key Metrics Changes - The company noted that 47% of consumers consider resale value when making primary market purchases, indicating a shift in consumer behavior towards luxury resale [5] - The luxury resale market is experiencing a fundamental shift, with younger consumers increasingly preferring resale options [5][11] Company Strategy and Development Direction - The company is focused on three strategic pillars: growth playbook, operational excellence, and obsessing over service [6][10] - The growth playbook aims to unlock supply by meeting customers where they are, while operational excellence focuses on profitability through technology and automation [6][10] - The company is enhancing customer experience through initiatives like My Closet, which aims to provide tools for tracking and capitalizing on closet value [11][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, projecting full year GMV growth of 12%-15% and revenue growth of 10%-13% for 2026 [19][20] - The company anticipates Adjusted EBITDA to be in the range of $57 million-$65 million for 2026, representing an expansion of nearly 200 basis points [19][20] - Management highlighted the resilience of buyers and sellers, with no slowdown observed since Q4 [35][36] Other Important Information - The company ended Q4 with $166 million in cash equivalents and restricted cash, with free cash flow of $43 million, up $23 million year-over-year [17][21] - The company has reduced total indebtedness by over $80 million over the past two years, strengthening its balance sheet [18] Q&A Session Summary Question: Update on Athena's impact on operational model - Management confirmed that 35% of units are processed through Athena, contributing to operating leverage and plans to extend its use to mid-value items [25][26] Question: Q1 guidance and confidence in growth - Management noted strong buyer and seller resilience, with double-digit growth expected in Q1, driven by effective sales and marketing strategies [32][34] Question: Dropshipping testing and future plans - Management indicated that dropshipping is being tested in categories like watches and handbags, with plans to expand further [40] Question: Supply pipeline visibility and ASP trends - Management reported a healthy balance between volume and price growth, with a strong supply pipeline for higher value items like fine jewelry [56] Question: AI's role in supply procurement - Management emphasized AI's potential to enhance supply procurement and improve seller experiences through targeted approaches [83][85]