Rent the Runway (RENT) Q3 2025 earnings summary

Executive summary

• Q3 2024 revenue grew 4.7%–5% year-over-year to $75.9 million, marking the fourth consecutive quarter of positive growth and the fastest of the four.

• Net loss narrowed to $18.9 million from $31.5 million year-over-year, reflecting cost reductions and improved operating leverage.

• Adjusted EBITDA improved to $9.3 million (12.3% margin), up from $3.5 million (4.8% margin) year-over-year, driven by fixed cost reductions and lower fulfillment costs.

• Active subscribers increased 1% year-over-year to 132,518, with improved retention and a return to subscriber growth.

• Strategic initiatives included a new subscription plan, enhanced onboarding, improved merchandising, SEO-driven growth, and a new Chief Product Officer.

Financial highlights

• Gross profit for Q3 2024 was $26.3 million, with gross margin stable at 34.7%–35% year-over-year.

• Net loss for Q3 2024 was $(18.9) million, improved from $(31.5) million in Q3 2023.

• Adjusted EBITDA for Q3 2024 was $9.3 million (12.3% margin), up from $3.5 million (4.8% margin) in Q3 2023.

• Free cash flow for the nine months ended October 31, 2024, was negative $9.3 million, a significant improvement from negative $47.3 million in the prior year.

• Cash and cash equivalents were $74.1 million as of October 31, 2024.

Outlook and guidance

• Q4 2024 revenue guidance is $74.4 million to $80.3 million; Adjusted EBITDA expected between $16.1 million and $20.1 million.

• Fiscal year 2024 revenue expected to grow 2%–4% year-over-year; full-year adjusted EBITDA margin guidance is 15%–16%.

• Free cash flow breakeven is expected for fiscal year 2024, supported by cost reductions and lower inventory spend.

• Interest expense is expected to decrease in fiscal 2024 due to the amended Temasek Facility eliminating cash interest for six quarters.