The RealReal (REAL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $148 million, up 11% year-over-year, with GMV of $433 million, up 6% year-over-year.

• Adjusted EBITDA turned positive at $2.3 million, a $9.3 million improvement year-over-year, driven by gross margin expansion and operating leverage.

• Active buyers grew 7% to 389,000, with average order value at $522, reflecting strong consumer demand.

• Net loss narrowed to $(18) million, or (12.1)% of revenue, improved from $(23) million, or (17.2)% in Q3 2023.

• Raised full-year 2024 guidance for GMV, revenue, and Adjusted EBITDA, citing continued momentum and strong supply trends.

Financial highlights

• Consignment revenue grew 14% year-over-year to $116.9 million; direct revenue declined 10% to $15.6 million.

• Gross profit was $111 million, up $17 million year-over-year; gross margin rose to 74.9%, up 430 basis points.

• Adjusted EBITDA was $2.3 million (1.6% of revenue), a significant improvement from $(7.0) million in Q3 2023.

• Free cash flow for Q3 was $2.1 million, compared to negative $19.1 million in Q3 2023.

• Cash and cash equivalents at quarter-end were $153 million, down from $176 million at year-end 2023.

Outlook and guidance

• Full-year 2024 GMV guidance raised to $1.81–$1.83 billion; Q4 GMV expected at $484–$500 million.

• Full-year 2024 revenue guidance increased to $595–$602 million; Q4 revenue expected at $158–$165 million.

• Full-year 2024 Adjusted EBITDA guidance raised to $4.7–$7.7 million; Q4 Adjusted EBITDA expected at $6.5–$9.5 million.

• Management expects continued operating losses and negative cash flows in the near term but believes current cash reserves are sufficient for at least the next 12 months.

• The company anticipates ongoing seasonality, with stronger supply and demand in Q4.