Rent the Runway (RENT) 5 Sep 242025 Q2 Earnings call transcript

Welcome to Rent the Runway Second Quarter 2024 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Rent the Runway's, Chief Legal and Administrative Officer, Cara Schembri. Thank you.

You may begin.

Good afternoon, everyone, and thanks for joining us today.

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or our various like which our These Before we will results forward-looking risks, be afternoon's are information, or including as with uncertainties growth. actual and next regarding These obligation and These detailed required update statements. as targets, remind could expectations will to in except that include future results, revise We this SEC, statements include within our materially. filed assumptions to our risks, any law. statements press this are financial days. forward-looking our the differ begin, assumptions that no few call well you market cause statements uncertainties would and we release XX-Q by guidance to the opportunities Form as subject undertake filings and to

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can dramatically guidance that momentum. pursue result, full our results the opportunity end I'm XXXX, highlighted breakeven a squarely believe report up and our it's EBITDA as is to in for you're flow We you, was our X flow to are organizational and $XX where million, revenue free Cara, was that for that revenue, at an to our of goals quarter 'XX the biggest and $XX high million for and growth. We've QX X of internal for our the we ninth so excited of year. What cash business. inflection demonstrating $XX.X the returning calls, within continued XX% everyone, thank growth guidance. On results exceeding structure reach. QX getting EBITDA consecutive business or year-over-year, to exciting and year free our Thanks, our expectations, million last we're our for X.X% raising earnings $XX.X big of goals aggressively seeing our the areas high this XX.X% joining. that revenue I cash is simplified margin positive exceeding Adjusted to and XX% guidance. end million our breakeven beat

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much You nearly by tax organic improve QX, can new with XX%. see expect year-over-year higher our frequency. In saw content we to launch on channels

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Thanks, Jen, you, joining everyone, for and thank us.

We make and QX EBITDA of quarter. in progress our good high revenue range. end guidance continued exceeded adjusted Both the to second the

the at $XX $XX QX guidance Our X% million continued XXXX fiscal implies QX versus guidance midpoint growth acceleration and the or XXXX revenue growth of of QX QX million of X% revenue XXXX versus a revenue to to of range.

I a to year. for XXXX to short, also As profitability the primary discuss guidance decline ending this are year. I flow last our further, take in discuss fiscal the second would raising moment reductions reason revenue for the reach this we grow In decline our to we the year's believe free full quarter. active is expect commitment for will in reiterating breakeven year quarter and revenue significantly improve significant like and QX We promotions year-over-year versus year-over-year subscribers. to cash this

year-over-year. X% would as In already active reported from than QX X, the promotions subscriber ending of subscribers as 'XX, flat growth the better were we level subscribers of been XXXX of generated much roughly have September our fact, excluding in highest 'XX. Notably, year-over-year QX decline

We also strategy ending success to believe QX of our less be active performance our promotional. lower XXXX stronger demonstrates that subscribers the revenue in despite

across Jen every experience customer to outlined, focused innovation of As enhancements driving business. we nearly our aspect on and the are

half will in year, through in second The go-forward the of which position financial more versus I plan. flow, our with are by growing and excited are cash meaningful our detail. expectations last company revenue underlying stronger and We considerably improvement walk

QX guidance full of are XXXX financial positive year further and Our progress. indicators

while We promotions. less are growing revenue on spending

demonstrating Our high versus stronger and levels on a growing is Reserve business trends year. Resale at last is year-over-year basis

XX.X% lower a expenses marketing improvement of higher revenue due in revenue versus and EBITDA revenue QX partially offset million fixed costs versus months products rates $XX.X million negative year-over-year revenue costs. negative increased revenue for slightly fulfillment 'XX investment expenses. which due contract EBITDA reduction drove was payments X.X% the by due XX, gross subscribers subscribers flow compensation year. $XX.X of XX.X% to with versus revenue QX of in was $XX.X revenue in X.X% down efforts approximately percentage up 'XX higher of in review growth or the of per for revenue. Operating July year's and of the Free July XXX,XXX a XXX,XXX year to to G&A, $XX.X 'XX, QX positive acquisitions. Total 'XX on XX, compared 'XX, for revenue revenue year-over-year second to quarter-over-quarter. expected cash to fiscal months or year-over-year in technology, costs due end XX.X% Reserve $XX.X million 'XX beyond. business. Gross of up of in XXX,XXX and margins greater costs, of $X.X fiscal primarily of payments the benefited or million X.X% Increased inventory quarter. last XXXX XX, Reserve units. Free reduction financial negative Subscription investment efficiencies up million reflects QX QX million of Average Ending in year-over-year our margins subscriber million revenue or revenue Fulfillment XXXX. promotional X.X% $X.X and and order the QX XX.X% 'XX. partially year-over-year transportation efforts, of for our from reflects in with 'XX 'XX as per ending cash seasonally cost cost primarily inventory were our XX.X% offset the a $X.X were adjustments active QX cash or the of higher be as due the 'XX XX.X% inventory QX $XX.X rental cash UPS, ended $X versus quarter-over-quarter XXXX flow share XX.X% XXXX subscribers revenue due 'XX. in continued of in quarter XX.X% prior million include prior million XX.X% or fiscal seasonally due share depth from fulfillment the to primarily was decreased six $X.X XX.X% was increase million. revenue Fulfillment in from Fulfillment business, in QX July and loyalty. rental Resale of of lower year-over-year subscribers costs million margins higher 'XX. Adjusted 'XX. now months favorable improved product increased revenue of in in lower primarily in 'XX quarter spending. Other and prior impact XX.X% XXX,XXX XX.X% the increased million the approximately revenue $XX.X million $XX.X million, versus Resale to XX.X% average and quarter stock-based in-stock half to X.X%. QX in QX new six operating negative active lower lower were revenue by Adjusted QX QX profitability. fulfillment reflect warehouse ending share impact is flow for Adjusted during cost result our a year, QX lower due ending me QX to and of higher was to active Let We in and costs EBITDA to year-over-year. revenue to 'XX in proportion versus at weaker the was in subscribers, which customer million XXXX as gross our and a six Total QX focus QX incremental in were from XX% costs higher in versus the lower the at were for of primarily and results rental flow revenue in were percentage 'XX decrease 'XX or 'XX increased million Free $X.X 'XX revenue in versus $X.X and year. $XX.X improved ending our QX expenses,

largely expenses to We the are be weighted half operating lower expect the that expenses Lower half due expenses. first driven by improvement and half operating the second will in of XXXX. capital primarily expenditures fiscal marketing versus lower first

capital of fiscal second versus improved revenue of higher We 'XX. the working fiscal in also the first and half expect half 'XX

half improvement capital guidance good QX cash 'XX will second we the that flow XXXX. for timing operating fiscal and year where be free will driven visibility. I the have in discuss by and expect expenditures, majority of We of now

with start me QX. Let

between revenue and adjusted be of XX% XX% million between and expect be million EBITDA to We and to $XX $XX margins revenue.

guidance outlined As implies X% QX revenue range. growth earlier, QX versus 'XX, trajectory improving guidance of midpoint to continuing the and X% growth the at revenue

approximately and be X.X% As QX year-over-year QX QX 'XX QX 'XX, year-over-year a in X% X.X% 'XX, between in reminder, 'XX, is to revenue in QX negative in X% positive growth positive was year-over-year expected year-over-year 'XX. and X.X% flat year-over-year in

business confidence in XXXX business increase revenue to progress X% 'XX. guidance our and to our the improving business, reflects on Reserve trends fiscal performance growth per versus growing 'XX. us full current gives increase revenue X% Resale improved Our versus solid subscriber year This between fiscal our and

We continue EBITDA to margins adjusted of between revenue. and of XX% XX% expect

for free continue flow you, we questions. to your fiscal as 'XX expect take mentioned and also to be now breakeven We cash previously. Thank will

Instructions] [Operator first comes the with from Securities. JMP Matt Citizens line Condon question of Our

My And talk talk seeing on opportunity. past one just maybe Can about first you're is about you just the there users. just currently? broader then resurrecting what

rates we're of past seeing in strength So customers. rejoin

lists, notice marketing kind we've experience, that in who that we actively are the as people improvements make seen on always people of engaged customers think been I who have customer are to people first comms our before.

way more we've at been that's on the early that's growing few the Runway is now, mainstream. focused adopter the this has years being behavior profitability. It -- and source a heavily our Rent to gone being rejoiners. And is rental actually us Obviously, of XXXX, opportunity tremendous So from behavior cost market an us then And being quickly. past for seeing behavior big. very just that until growth a we're over a for

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these are deployed, excited really tremendous into I'm about I'm how really that for XXXX half, us going help to simplified So we've goals, on strategies XXXX put and and business about excited mini second particularly we start-ups where our RTR. growth cross-functional ignite

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Our next Ashley with line comes question Helgans of from the Jefferies.

marketing. with for It's to Blake off I wanted start on Ashley.

initiatives talk to terms several You marketing lean depending sales kind exciting talked And most marketing could on your Can do half? about what excited kind what you growth see? about you initiatives. willingness your you you're of in of into stimulate in the to different marketing second about ROI discuss maybe of if

I Marketing have we Yes. historically important a never Look, realize even Chief the is think to had thing Officer. here

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of to about to kind decision just I from thinking consumer, really promos to how wanted the that talk of so your kind points. revisit your challenged in and revisit you're decision of I learnings helpful. reduce That's wanted then light and And price far about

Sure.

and a that were a so quick do multi-month of just nature, promotions discussed So we've to promotions. previously. used X- would we in Historically, we X-month have of lot recap what

We have largely be promotion. focused gone to single out so those promotions month all and X-month of changed focused,

The other is continue to retention targeted promotional promotions customer to of strategies, thought to on, of and beneficial that QX to to were time to segments promotions not dollars and of beneficial not last so in. were 'XX. thing were have returning learned discontinue at the we was we discussed variety in us, adequate a when year that that bringing high, tested what And low, some we some some we the different customers

the of you're levels a particularly QX particularly versus really just we terms or repeating sub weren't with. not promotions what high that some 'XX in 'XX so for of is seeing of the And count discontinuing reflection of satisfied QX

out, we as And count flat year-over-year. sub in pointed roughly is September, so

promotions those promotional didn't we the is. cadence with retention element the where think is clearly, I of So think now business satisfied are have We pretty strong spending where a to drive and them. And really customers. we're focused focused for on to our all other healthy of our place, of a but on the promotions, ways retention all and growth really time it's not in

promotions, that's that nature in incremental the where, focusing maximizing we've momentum we've business the can customers there, those of that designer and the already into to Reserve XX% that a arenas in think that, due our on marketing growth is due competitive into think give I makes of of testament customer lot price. fashion business, retail dollars, her price it's And August fast around you I by customer rent without the more RTR. And had That value. and detrimenting inventory the traditional a seen price this that business by value the points again, availability, new the fashion. our nature That to fit and more to of to that experience customer drive huge product market without improving without XX% is designer enabling with than for XX% dress we with

That's of great best color. half. the And luck for second

like at comments. the back turn I no the now over closing There you. Thank further management questions for to this call time. to are would any

tuned. second year, Thanks really hope half the us stay and excited of We're you today. for joining about the

much. so you Thank

this And disconnect today's this conference, concludes at your you may lines time. and