Rent the Runway Reports Fiscal Third Quarter 2024 Financial Results
Intellectia.AI
Rent the Runway, Inc. (NASDAQ:RENT), a leader in the fashion rental industry, announced its financial results for the fiscal quarter ended October 31, 2024.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | YoY Change |
|---|---|---|---|
| Revenue | $75.9M | $72.5M | +4.7% |
| Gross Profit | $26.3M | $25.2M | +4.4% |
| Gross Margin | 34.7% | 34.8% | -0.1 pp |
| Net Loss | $(18.9)M | $(31.5)M | Improved |
| Adjusted EBITDA | $9.3M | $3.5M | +165.7% |
| Adjusted EBITDA Margin | 12.3% | 4.8% | +7.5 pp |
Rent the Runway reported a revenue of $75.9 million, marking a 4.7% increase year-over-year. The company significantly improved its net loss and adjusted EBITDA compared to the same quarter last year, showcasing operational efficiency and cost management efforts.
Revenue Breakdown by Segment
| Segment | Performance |
|---|---|
| Reserve Orders | Fastest Y-o-Y Growth since Q1 2022 |
| Subscription Revenue | Sequential Growth in Non-branded Traffic |
The company's revenue growth was driven primarily by strong performance in its Reserve and Subscription offerings. The launch of a new 1-Shipment Subscription Plan contributed to an increase in non-branded traffic, and broader product availability amplified demand.
Key Developments and Operational Highlights
- Improved free cash flow consumption, with a $9M expenditure for the nine months ending October 31, 2024.
- Launch of a new subscription plan at $119 per month.
- Enhanced SEO strategies achieving new YTD highs in keyword rankings.
- A 'Own Nothing, Have Everything' brand campaign launched during RTR's 15-year anniversary.
- Chief Product Officer hired to elevate product strategy.
Executive Commentary
CEO Jennifer Hyman emphasized the organization's restructured approach towards achieving free cash flow breakeven. The company realigned its strategies to boost growth across all revenue lines, focusing on Reserve and Resale offerings, customer acquisition cost reduction, and enhanced inventory strategies.
CFO Sid Thacker highlighted improved revenue growth, return to subscriber growth, and a clear focus on accelerating the Subscription business.
Forward Guidance
Rent the Runway projects: - Fiscal fourth quarter revenue between $74.4 million and $80.3 million. - Fiscal year 2024 revenue growth between 2% and 4% and an adjusted EBITDA margin of 15% to 16%. - Free Cash Flow Breakeven on a full-year basis.
This report underscores Rent the Runway's commitment to strategic reorientation and growth through customer-driven initiatives and operational efficiencies, positioning it advantageously for the upcoming fiscal year.
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