Revolve Group (RVLV) Q1 2025 earnings summary

Executive summary

• Achieved double-digit net sales growth (up to $297 million) and a 57% increase in operating income year-over-year for Q1 2025, with operating cash flow of $45 million and cash exceeding $300 million.

• Adjusted EBITDA rose 45% to $19.3 million, with margin improvement and strong free cash flow.

• Net income reached $11.4 million ($0.16 per diluted share), up from $10.9 million ($0.15 per share) last year.

• Active customers grew 6% year-over-year to 2.7 million, with total orders up 4% to 2.3 million.

• Continued investment in AI, personalization, international expansion, own brands, and customer experience despite macroeconomic uncertainty.

Financial highlights

• Net sales: $297 million, up 10% year-over-year; gross margin: 52.0%, down 30 bps due to deeper markdowns and lower full-price mix, partially offset by higher own brand mix.

• Operating income up 57% year-over-year; Adjusted EBITDA up 45% to $19.3 million; free cash flow reached $42.8 million.

• Cash and cash equivalents at $300.8 million, up $44 million sequentially and 17% year-over-year; no debt.

• Inventory at $213.7 million, down 7% from year-end 2024, up 6% year-over-year, with net sales growth outpacing inventory growth.

• Fulfillment, selling/distribution, and marketing costs as a percentage of net sales all improved year-over-year.

Outlook and guidance

• FY 2025 gross margin expected at 50%-52%, lower than prior outlook, reflecting tariff impact and mitigation efforts; Q2 2025 gross margin guidance: 52%-53%.

• Fulfillment costs expected at 3%-3.2% of net sales for 2025; selling/distribution at 17.2%-17.5%; marketing at 14.9%-15.1%; G&A at $154-$157 million.

• Effective tax rate: 27%-28% for 2025, returning to 24%-26% in 2026.

• April 2025 net sales grew mid-single digits year-over-year, with international outpacing U.S.

• Guidance reflects ongoing macroeconomic headwinds, tariffs, inflation, supply chain disruptions, and FX volatility.