The RealReal(REAL) - 2024 Q4 - Annual Report

Financial Performance - In 2024, the company's Gross Merchandise Value (GMV) reached $1,829,463, an increase from$1,725,983 in 2023, while the Net Merchandise Value (NMV) rose to $1,382,875 from$1,269,880[199]. - Total revenue for 2024 was $600.5 million, compared to$549.3 million in 2023, reflecting overall growth despite a decline in direct revenue[220]. - The net loss for the year ended December 31, 2024, was $134.2 million, an improvement from a net loss of$168.5 million in 2023 and $196.4 million in 2022[266]. - Adjusted EBITDA for the year ended December 31, 2024, was$9.3 million, compared to a loss of $55.2 million in 2023 and a loss of$112.5 million in 2022[266]. Revenue Breakdown - The consignment revenue for 2024 was $473,396, up from$415,572 in 2023, reflecting a take rate increase to 38.4% from 37.5%[199]. - Direct revenue decreased by $14.6 million, or 18$7.9 million, or 15%, in 2024 compared to 2023, primarily due to an increase in the standard shipping fee per order[224]. - Consignment revenue increased by $57.8 million, or 14$545 in 2024, up from $523 in 2023, indicating higher spending per transaction[199]. Operational Efficiency - The company reported a sell-through ratio of approximately 85$4.3 million, or 7%, in 2024 compared to 2023, attributed to reduced overhead costs[225]. - Cost of direct revenue decreased by $18.5 million, or 25$3.0 million, or 5%, in 2024 compared to 2023, primarily due to a reduction in advertising costs[232]. Future Outlook - Operations and technology expenses are expected to increase in future periods to support growth, including investments in automation and technology improvements[215]. - Selling, general and administrative expenses are anticipated to decrease as a percentage of revenue over the longer term[216]. - The company expects operating losses and negative cash flows to continue in the foreseeable future but believes existing cash will meet needs for at least the next 12 months[246]. Debt and Cash Flow - As of December 31, 2024, the company had cash and cash equivalents of $172.2 million and an accumulated deficit of$1,253.8 million[244]. - Net cash provided by operating activities was $26.8 million in 2024, despite a net loss of$134.2 million[251]. - Net cash used in investing activities was $25.6 million, primarily for property and equipment purchases and capitalized software costs[252]. - The company exchanged$145.8 million of 2025 Notes and $6.5 million of 2028 Notes for$135.0 million of 2029 Notes, which bear an interest rate of 13.00% per annum[259]. Interest and Liabilities - Interest income decreased by $0.9 million, or 10$8.8 million, due to lower average cash balances[242]. - Interest expense increased by $10.7 million, or 100$21.4 million, due to contractual interest from the 2029 Notes[243]. - The fair value of warrant liability increased by $68.2 million, or 100$68.2 million, indicating significant fluctuations in the valuation of the warrants issued[266].