The RealReal(US:REAL)2025-12-03 16:30Financial Data and Key Metrics Changes - The company reported a 20% growth in GMV (Gross Merchandise Value) in Q3, following a 14% growth in Q2, indicating strong performance in the luxury resale market [10][20][70] - EBITDA margin expanded by 380 basis points in Q3, reaching approximately 5%, with expectations to close the year at 5.5% [70][71] Business Line Data and Key Metrics Changes - The company is focusing on unlocking supply from consumers' closets, with a target of accessing approximately $200 billion in potential supply [34] - The retail presence is contributing significantly, with stores bringing in about 25% of new consignors [13] Market Data and Key Metrics Changes - The luxury resale market is estimated to be growing at high single digits, potentially reaching 10%, while the primary luxury market is expected to grow in low single digits [20][26] - The company is the market leader in luxury resale, closing in on $2 billion in GMV, compared to the $85 billion annual spending in the U.S. luxury resale category [4][30] Company Strategy and Development Direction - The company is implementing a growth playbook that includes a sales team, marketing efforts, and retail presence to unlock supply [11][34] - The strategy includes leveraging AI for efficiency in the intake and authentication processes, with the Athena initiative processing 27% of items in Q3 [48][51] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation in the primary market increases consideration for the resale platform, as consumers seek value [15] - The company is optimistic about its growth trajectory, with plans to achieve 15%-20% EBITDA margins over the next four to six years [71][72] Other Important Information - The company has seen a significant increase in brand trust, with an eight-point rise year-on-year [32] - The company is actively working to expand its presence in the men's luxury segment, which currently under-indexes compared to women's fashion [65][66] Q&A Session Summary Question: How is the company addressing the supply issue in the luxury resale market? - The company is focused on unlocking supply through a combination of sales teams, marketing, and retail presence, targeting the estimated $200 billion in consumer closets [34] Question: What is the company's approach to pricing in the current inflationary environment? - The company stated that the market sets the price, and they help sellers find the optimal balance between price and speed of sale [15][16] Question: How does the company plan to improve margins in the future? - The company aims to achieve 15%-20% EBITDA margins by focusing on operational efficiencies and leveraging AI technologies like Athena [71][72] Question: What is the company's strategy for international expansion? - While international expansion is a growth area, the company is currently prioritizing growth in the U.S. market due to existing potential [42] Question: How is the company leveraging AI in its operations? - The Athena initiative is streamlining the intake process, allowing for faster processing and authentication of items, which is expected to improve efficiency significantly [48][51]