Financial Performance - Total revenue for the three months ended April 30, 2025, was $69.6 million, a decrease of 7.2% year-over-year compared to $75.0 million in the same period of 2024[128] - Gross Profit was $21.9 million, representing a gross margin of 31.5%, down from 37.9% in the previous year[128] - Net Loss for the quarter was $(26.1) million, with a net loss as a percentage of revenue of (37.5)%, compared to (29.3)% in the prior year[128] - Adjusted EBITDA was $(1.3) million for the three months ended April 30, 2025, down from $6.5 million in 2024, with Adjusted EBITDA margins of (1.9)% and 8.7% respectively[158] - Total revenue, net for the three months ended April 30, 2025, was $69.6 million, a decrease of $5.4 million, or 7.2%, compared to $75.0 million for the same period in 2024[173] - Subscription and Reserve rental revenue was $62.0 million for the three months ended April 30, 2025, a decrease of $4.1 million, or 6.2%, compared to $66.1 million for the same period in 2024[174] - Other revenue was $7.6 million for the three months ended April 30, 2025, a decrease of $1.3 million, or 14.6%, compared to $8.9 million for the same period in 2024[175] - Total costs and expenses were $89.3 million for the three months ended April 30, 2025, a decrease of $2.2 million, or 2.4%, compared to $91.5 million for the same period in 2024[176] - General and administrative expenses were $20.7 million for the three months ended April 30, 2025, a decrease of $2.1 million, or 9.2%, compared to $22.8 million for the same period in 2024[183] - Interest expense, net was $(6.3) million for the three months ended April 30, 2025, an increase of $0.7 million, or 12.5%, compared to $(5.6) million for the same period in 2024[191] Subscriber Metrics - Active Subscribers increased by 1% year-over-year, reaching 147,157 as of April 30, 2025, compared to 145,837 in 2024[128] - Active Subscribers increased to 147,157 as of April 30, 2025, up from 145,837 year-over-year, driven by improved retention and promotional activity[152] Customer Engagement - Customer engagement metrics improved, with Spring 2025 rental products showing a 23% higher share of views and 46% more hearts compared to Spring 2024[128] - The company plans to focus on increasing the quantity and desirability of rental product purchases to enhance customer satisfaction and retention in fiscal year 2025[136] Cash Flow and Liquidity - Cash and Cash Equivalents decreased to $70.4 million from $82.0 million year-over-year[128] - Cash flows from operations for the three months ended April 30, 2025 were $8.3 million, an increase from $4.6 million in the same period of 2024[203] - Total cash and cash equivalents, along with restricted cash, decreased to $79.4 million as of April 30, 2025, down from $86.5 million at the beginning of the period[203] - The cash consumption of the business was $(6.4) million for the three months ended April 30, 2025, compared to $(1.4) million for the same period in 2024, indicating higher operational costs[203] Operational Strategy - The company launched 36 new brands and over 1,000 new styles in the first quarter of fiscal year 2025, with a projected 134% increase in rental product receipts year-over-year[126] - The company expects to double the new rental product added to its site in fiscal year 2025 compared to fiscal year 2024[131] - The company is focused on investing in customer value and improving the customer experience to mitigate inflationary pressures and rising labor costs[147] - The company plans to continue leveraging technology and automation to drive efficiencies and improve margins as it scales its operations[140] - The company plans to significantly increase rental product availability, which may impact cash and cash equivalents in fiscal year 2025[197] Financial Challenges - Net loss for the three months ended April 30, 2025, was $26.1 million, compared to a net loss of $22.0 million for the same period in 2024[172] - The company's accumulated deficit reached $(1,149.1) million as of April 30, 2025, indicating ongoing financial challenges since inception[197] - The macroeconomic environment remains uncertain, impacting consumer discretionary spending, price sensitivity, and overall business operations[145] Cost Management - Transportation costs decreased as a percentage of revenue in fiscal year 2024, attributed to higher revenue per order and a new transportation contract, with expectations to further reduce these costs in fiscal year 2025[147] - Fulfillment expenses were $20.4 million for the three months ended April 30, 2025, representing 29.3% of revenue, compared to 27.5% for the same period in 2024[177] - The January 2024 restructuring plan is expected to generate total annual operating expense savings of approximately $12 million[189] Market and Risk Factors - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to adopt new accounting guidance within the same time periods as private companies[214] - There were no material changes to the company's quantitative and qualitative disclosures about market risk in the three months ended April 30, 2025, compared to the 2024 Annual Report[215] - The company experienced seasonality in subscriber acquisition, typically peaking in March through May and September through November, with disruptions noted during fiscal year 2022 and 2023 due to pricing changes and inventory levels[143] Asset Management - The company performed an impairment analysis of its long-lived assets as of April 30, 2025, and January 31, 2025, concluding that undiscounted cash flows exceeded carrying values, resulting in no impairment recognized for the respective periods[212]

Core Points - Rent the Runway, Inc. is conducting its Q1 2025 Earnings Conference Call on June 5, 2025, at 4:30 PM ET [1] - The call will include references to the Q1 2025 earnings presentation available on the Investor Relations website [3] - Forward-looking statements will be made regarding guidance for Q2 2025 and the fiscal year 2025, focusing on business strategies, subscriber growth, customer loyalty, and inventory increases [4] Financial Information - The call will reference non-GAAP financial information, which is not intended to be considered in isolation from GAAP financial information [6]

Financial Data and Key Metrics Changes - The company ended Q1 2025 with 147,157 active subscribers, up approximately 1% year over year, and the highest number of ending subscribers in company history [31] - Total revenue for Q1 2025 was $69.6 million, down $5.4 million or 7.2% year over year [31] - Gross margins decreased to 31.5% in Q1 2025 from 37.9% in Q1 2024, reflecting higher revenue share costs and fulfillment costs [33] - Adjusted EBITDA for Q1 2025 was negative $1.3 million, compared to positive $6.5 million in Q1 2024 [34] - Free cash flow for Q1 2025 was negative $6.4 million, a decrease from negative $1.4 million in Q1 2024 [35] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue decreased by 6.2% year over year in Q1 2025, primarily due to lower average revenue per subscriber [32] - Fulfillment costs were $20.4 million in Q1 2025, slightly down from $20.6 million in Q1 2024 [32] - The company launched 36 new brands and over 1,000 new styles, resulting in a 24% year-over-year increase in inventory volume received [8][9] Market Data and Key Metrics Changes - The company reported a 23% higher share of views, 46% more hearts, and a 14% higher love rate for its spring 2025 inventory compared to the previous year [9] - April add-on gross bookings increased by 11% year over year, indicating higher customer engagement [9] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes increasing inventory breadth and depth, innovating products, and enhancing customer service [4][5] - Plans for Q2 2025 include launching over 40 new brands and posting over 2,700 new styles [12] - The company aims to improve customer retention through personalized services and a new rewards program [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their inventory and product strategies, noting the strongest quarterly customer retention in four years [23] - The company anticipates continued improvement in subscriber growth and retention throughout fiscal year 2025 [30] - Management acknowledged the uncertain environment but emphasized the value of renting over buying for consumers [38] Other Important Information - The company has shifted its marketing strategy towards transparency and community engagement, resulting in a 163% increase in social media engagement [21] - The company is planning to scale customer service initiatives, including a concierge service for new and rejoining customers [16][18] Q&A Session Summary Question: Why has it taken until fiscal year 2025 to implement these strategies? - Management explained that previous focus was on managing cash consumption and reducing costs, which limited inventory purchases until now [26][28] Question: What are the expectations for subscriber growth and revenue? - Management expects double-digit growth in ending active subscribers for fiscal year 2025, with revenue growth lagging behind due to higher promotional spending [36][30] Question: How does the company plan to handle potential tariff impacts? - Management stated that their guidance does not factor in potential tariff impacts, as they have already placed orders for most inventory receipts for fiscal year 2025 [37]

Revenue and Profitability - Revenue for Q1 2025 was $69.6 million, a decrease of 7.2% year-over-year from $75.0 million in Q1 2024[8] - Gross Profit was $21.9 million, down 22.9% from $28.4 million in Q1 2024, with a Gross Margin of 31.5% compared to 37.9% in Q1 2024[8] - Net Loss for Q1 2025 was $(26.1) million, compared to $(22.0) million in Q1 2024, representing a net loss as a percentage of revenue of (37.5)%[8] - Adjusted EBITDA was $(1.3) million, down from $6.5 million in Q1 2024, with an Adjusted EBITDA Margin of (1.9)%[8] - Total revenue for the three months ended April 30, 2025, was $69.6 million, a decrease of 7.2% from $75.0 million in the same period of 2024[29] - Net loss for the three months ended April 30, 2025, was $26.1 million, compared to a net loss of $22.0 million in the same period of 2024, representing a 18.6% increase in losses[29] - Adjusted EBITDA for the three months ended April 30, 2025, was $(1.3) million, a significant decline from $6.5 million in the same period of 2024[35] - Adjusted EBITDA margin for the three months ended April 30, 2025, was (1.9)%, down from 8.7% in the same period of 2024[35] Subscriber Metrics - Active Subscribers at the end of Q1 2025 reached 147,157, an increase of 1% from 145,837 in Q1 2024[8] - Average Active Subscribers decreased by 2% to 133,468 from 135,896 in Q1 2024[8] - The company anticipates double-digit growth in ending Active Subscribers for fiscal year 2025 compared to fiscal year 2024[11] Inventory and Customer Engagement - New inventory strategy led to a 24% increase in new inventory receipts in Q1 2025 versus Q1 2024, with expectations of a 134% year-over-year increase for the remainder of the year[4] - Customer engagement metrics improved, with 23% higher share of views and 46% more hearts for Spring 2025 inventory compared to Spring 2024[7] Cash Flow and Assets - Total current assets decreased to $87.1 million as of April 30, 2025, from $93.9 million as of January 31, 2025[27] - Total liabilities increased to $452.4 million as of April 30, 2025, compared to $422.5 million as of January 31, 2025[27] - Cash and cash equivalents at the end of the period were $70.4 million, down from $77.4 million at the beginning of the period[27] - Free cash flow for the three months ended April 30, 2025, was $8.3 million, compared to $4.6 million in the same period of 2024[31] - Net cash provided by operating activities increased to $8.3 million in Q2 2025 from $4.6 million in Q2 2024[37] Future Outlook - The company expects revenue for Q2 2025 to be between $76 million and $80 million[11] Costs and Expenses - Total costs and expenses for the three months ended April 30, 2025, were $89.3 million, a slight decrease from $91.5 million in the same period of 2024[29] - Free Cash Flow for Q2 2025 was $(6.4) million, compared to $(1.4) million in Q2 2024[37] - Free Cash Flow Margin decreased to (9.2)% in Q2 2025 from (1.9)% in Q2 2024[37] - Purchases of rental products rose to $(19.3) million in Q2 2025 from $(13.1) million in Q2 2024[37] - Proceeds from the sale of rental products decreased to $4.9 million in Q2 2025 from $6.8 million in Q2 2024[37] - Proceeds from the liquidation of rental products were $0.9 million in Q2 2025, down from $1.1 million in Q2 2024[37] - Purchases of fixed and intangible assets increased to $(1.2) million in Q2 2025 from $(0.8) million in Q2 2024[37]

Q1 2025 Earnings Presentation June 5, 2025 RENT THE RUNWAY Forward-Looking Statements Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this presentation that do not relate to maers of historical fact should be considered forward-looking statements. These statements include, but are not limited to, statements regarding Rent the Runway, Inc.'s (the "Company," "our" or "we") guidance and underlying ass ...

Strongest Quarterly Customer Retention in Four Years Return to Subscriber Growth with over 147,000 Active Subscribers, the Highest Quarter Ending Active Subscriber Count in Company History New Inventory Strategy Drove Significant Improvements in Subscriber Count and Customer Retention NEW YORK, June 05, 2025 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. (“Rent the Runway” or "RTR") (NASDAQ: RENT), the company transforming the way women get dressed by pioneering the world’s first Closet in the Cloud, today repor ...

Core Insights - Rent the Runway, Inc. is set to release its first quarter 2025 financial results on June 5, 2025, after market close [1] - A conference call and live webcast will be held at 4:30 p.m. Eastern Time on the same day to discuss the results and provide a business update [1] Company Overview - Founded in 2009, Rent the Runway is transforming the trillion-dollar fashion industry with its "Closet in the Cloud" concept [4] - The company's mission is to empower women to feel their best every day through subscription services, rental items, and resale options from hundreds of designer brands [4] - Rent the Runway offers a diverse assortment of millions of items for various occasions, including evening wear, accessories, workwear, and activewear [4] - The company has developed a two-sided discovery engine that connects engaged customers with differentiated brand partners, leveraging its brand, data, logistics, and technology [4] - Under the leadership of CEO and Co-Founder Jennifer Hyman, Rent the Runway has been recognized multiple times on CNBC's "Disruptor 50" and Fast Company's Most Innovative Companies list [4]

Product Acquisition and Sourcing - The share of products sourced through Share by RTR and Exclusive Designs has increased from approximately 26% in fiscal year 2019 to approximately 70% in fiscal year 2024[47]. - Wholesale represented 30% of product acquisition in fiscal year 2024, with original retail prices set by brands at an approximate 2.5x markup to wholesale prices[48]. - Share by RTR accounted for 48% of product acquisition in fiscal year 2024, with revenue share fees calculated net of logistics fees[49]. - Exclusive Designs made up 22% of product acquisition in fiscal year 2024, offering styles exclusive to Rent the Runway for a limited time[51]. Brand Awareness and Marketing - As of December 2023, unaided brand awareness was 19% among U.S. women ages 18-45 with a household income of $50,000 or more, and 27% among those with a household income of $100,000 or more[53]. - In fiscal year 2024, nearly half of subscribers reported sharing their Rent the Runway experience on social media over five times, indicating strong organic growth[54]. - The company aims to enhance marketing efforts in fiscal year 2025 by focusing on increased product quantity and desirability, improved search placements, and paid influencers[55]. - Marketing efforts will focus on promoting rental product increases and enhancements, including a paid influencer strategy and improved organic social channel performance[79]. Data Utilization and Technology - The company captures thousands of unique data points per subscriber per year, leveraging this data to optimize product offerings and enhance customer experience[58]. - The proprietary product catalog system supports management at the SKU level, facilitating fast ingestion of new styles without sacrificing data collection[71]. - The company has implemented large-scale automation and innovative processes for garment storage and processing, resulting in cost savings and increased shipment capacity[73]. Fulfillment and Capacity - The company has two fulfillment centers with a total capacity to store over 2 million garments and accessories, aiming for delivery within two to three business days[75]. - The company expects to increase its weekly processing capacity to handle at least 4 times its active subscriber count by the end of fiscal year 2024 with minimal additional investment[75]. Financial Overview - As of January 31, 2025, the company had cash and cash equivalents of $77.4 million and $333.7 million of debt outstanding under the 2025 Amended Facility[432]. Customer Retention and Acquisition - The company plans to enhance customer retention and acquisition by increasing the availability and desirability of rental products on its website and app in fiscal year 2025[78]. Employment and Workforce - The company had a total of 912 full-time employees and 141 part-time employees as of January 31, 2025, with a technology team of 131 employees[98]. Legal and Regulatory Environment - The company holds five issued patents in the United States, expiring between 2031 and 2037, and has a total of 23 registered trademarks in the U.S.[94]. - The company is subject to various complex laws and regulations that may evolve and impact its business operations[88]. Seasonal Trends and Expenses - The company experienced typical seasonal patterns in fiscal year 2024, with higher subscriber acquisition in March through May and September through November[82]. - Transportation expenses are typically highest in the fourth fiscal quarter due to carrier rate increases and higher service levels during holidays[83].

Financial Data and Key Metrics Changes - The company improved its cash position significantly, with a decline of $6.6 million in fiscal year 2024 compared to a decline of $70.5 million in fiscal year 2023, resulting in record low cash consumption [5] - Total revenue for Q4 2024 was $76.4 million, an increase of $600,000 or 0.8% year over year [31] - Adjusted EBITDA for Q4 2024 was $17.4 million or 22.8% of revenue, compared to $11.2 million or 14.8% of revenue in the prior year [33] Business Line Data and Key Metrics Changes - Subscription and reserve rental revenue decreased by 1.2% year over year in Q4 2024, primarily due to lower average subscribers [31] - Other revenue increased by 13.5% or $1.4 million year over year [31] - Fulfillment expenses were $20.2 million in Q4 2024, slightly lower than $20.1 million in Q4 2023, with fulfillment expenses as a percentage of revenue at 26.4% [32] Market Data and Key Metrics Changes - Ending active subscribers decreased to 119,778, down approximately 4.9% year over year [29] - Average active subscribers during the quarter were 126,148, a decrease of 2.1% from the prior year [29] - The company plans to double inventory purchases in fiscal year 2025, with 62% of total units expected to come from the share by RTR program [23][36] Company Strategy and Development Direction - The company is focusing on a disciplined growth strategy rather than growth at all costs, emphasizing the importance of inventory investment to unlock customer growth and retention [6][22] - A significant inventory investment is planned for 2025, with a goal to add two times new inventory units year over year and 75% more new styles [16][17] - The company aims to evolve into a discovery engine for consumers to find the latest in designer fashion, leveraging its partnerships with brands [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to operate at nearly breakeven levels while maintaining steady revenue, highlighting improvements in cost structure and working capital [28] - The company anticipates increased cash consumption in fiscal year 2025 due to inventory investments, but expects this to lead to subscriber growth and improved customer satisfaction [37] - Management is cautious about external factors such as tariffs and economic conditions but believes renting offers substantial value compared to buying [40] Other Important Information - The company has restructured its customer service team to focus more on proactive engagement, which has led to improved customer satisfaction scores [10] - The company has implemented a 60-day customer promise for new members, providing risk-free renting for the first two months [19] Q&A Session Summary Question: Can you help us understand the cash flow guidance and the drivers of it? - The cash flow guidance reflects a significant increase in inventory, with a CapEx guidance of $70 million to $75 million for the year, which is a considerable increase from fiscal year 2024 [43][44] Question: What have you seen more recently regarding consumer reactions to tariffs? - The company believes renting provides considerable value versus buying, and the new inventory addresses the primary pain point for customers, which is expected to improve retention [46][47] Question: How do we think about the customer experience changing in 2025? - The company is doubling the number of new units on the platform, which will significantly enhance the customer experience with more new arrivals and greater brand variety [50][51]

Q4 2024 Earnings Presentation April 15, 2025 RENT THE RUNWAY Forward-Looking Statements Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this presentation that do not relate to maers of historical fact should be considered forward-looking statements. These statements include, but are not limited to, statements regarding Rent the Runway, Inc.'s (the "Company," "our" or "we") guidance and underlying a ...