Rent the Runway (RENT) Q2 2025 earnings summary

Executive summary

• Q2 2024 revenue reached $78.9 million, up 4.2% year-over-year, exceeding guidance and driven by higher units per subscriber and strong Reserve momentum.

• Adjusted EBITDA was $13.7 million (17.4% margin), up from $7.7 million (10.2%) in Q2 2023, marking the ninth consecutive quarter of positive EBITDA.

• Net loss narrowed to $15.6 million (19.8% of revenue), a 42% improvement year-over-year, reflecting cost reductions and improved operating leverage.

• Active subscribers declined 6% year-over-year to 129,073, mainly due to reduced promotional activity, but retention improved.

• Major tech upgrades and operational improvements enhanced site speed, doubled checkout completion, and increased customer engagement.

Financial highlights

• Q2 2024 revenue was $78.9 million, up $3.2 million (4.2%) year-over-year and $3.9 million (5.2%) quarter-over-quarter.

• Gross margin was 41.1% in Q2 2024, down from 43.9% in Q2 2023 but up from 37.9% in Q1 2024.

• Adjusted EBITDA for Q2 was $13.7 million (17.4% margin), up from $7.7 million (10.2%) in Q2 2023.

• Free cash flow for Q2 2024 was -$4.5 million, a significant improvement from -$17.5 million in Q2 2023; 1H 2024 free cash flow consumption was $6 million, $24 million lower than 1H 2023.

• Operating expenses, excluding share-based compensation, were $36.3 million, down from $39.6 million in Q2 2023.

Outlook and guidance

• Q3 2024 revenue is expected between $75 million and $77 million, with Adjusted EBITDA margin of 13% to 15%.

• Full-year 2024 revenue guidance raised to $304 million–$316 million (2%–6% growth), with Adjusted EBITDA margin expected between 15% and 16%.

• Free cash flow breakeven is reiterated as a goal for fiscal 2024, with high visibility on lower operating expenses and capital expenditures.

• Management expects revenue growth in fiscal 2024, driven by customer base expansion, improved experience, and focus on resale.

• Plans to further reduce rental product purchases and increase capital-efficient product acquisition channels.