The RealReal(REAL)2024-08-06 23:03Financial Data and Key Metrics Changes - The company reported a 17% year-over-year increase in consignment revenue for Q2 2024, with active buyers growing by 9% compared to the same period in 2023 [4] - Adjusted EBITDA for Q2 was negative 21 million year-over-year, marking the 11th consecutive quarter of year-over-year improvement [4] - Revenue for the first half of 2024 grew by 46 million compared to the prior year [4] Business Line Data and Key Metrics Changes - The consignment business remains a focus, contributing to the overall revenue growth [5] - Direct revenue is expected to stay within 9% to 10% of total revenue going forward, with Q2 being at the high end of that range [19] Market Data and Key Metrics Changes - The average selling price (ASP) in Q2 was down 3%, but this was offset by an increase in items per order, resulting in average order value (AOV) being flat year-over-year [8] - The company noted a modest pressure on consumer spending, with some price compression observed [8] Company Strategy and Development Direction - The company aims to deliver sustained growth and expand margins through sales, marketing, and store initiatives [5] - There is a focus on operational efficiencies and leveraging advancements in AI to enhance profitability [5] - The company is optimistic about the luxury resale market and is refining its approach to identify attractive markets for new stores [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA for the full year 2024, citing strong performance in the first half and the resilience of the business model [6][9] - The company is preparing for a seasonal peak in Q4, expecting GMV growth to accelerate compared to the first half [8][16] Other Important Information - The company highlighted the importance of its consignment model, which mitigates the impact of price changes on its bottom line [9] - The management emphasized the need to educate consumers on the value of luxury items compared to primary market prices [14] Q&A Session Summary Question: Clarification on guidance and GMV dynamics - Management expects GMV growth in the second half to accelerate, with a prudent outlook on potential consumer spending slowdown [8] Question: Trends in the luxury landscape and consumer behavior - Management noted increased price sensitivity among consumers but highlighted the ability to compensate through volume growth [13] Question: Insights on Q4 guidance and seasonal patterns - Management confirmed expectations of a typical seasonal increase from Q3 to Q4, with confidence stemming from healthy supply and consignor growth [16][17] Question: Future expectations for direct revenue - Direct revenue is expected to remain stable within the 9% to 10% range of total revenue, with improved margins anticipated [19]