Rent the Runway (RENT) Q3 2026 earnings summary

Executive summary

• Q3 2025 revenue reached $87.6M, up 15.4% year-over-year, with active subscribers up 12.4% to 148,916 and total subscribers at 185,200.

• Net income for Q3 2025 was $76.5M, primarily due to a one-time $96.3M gain on debt restructuring from a major recapitalization.

• Recapitalization reduced debt to $120M, extended maturity to 2029, and raised $32.5M in new capital through a cash infusion and rights offering.

• Major inventory expansion nearly doubled new inventory and increased new styles by 1.5x year-over-year, supporting improved retention and loyalty.

• Community-driven marketing and product innovations, including personalized app features and engagement programs, drove organic growth and lower acquisition costs.

Financial highlights

• Q3 2025 revenue: $87.6M (+15.4% YoY); gross profit: $25.9M (29.6% margin), down from 34.7% YoY.

• Adjusted EBITDA for Q3 2025: $4.3M (4.9% margin), down from $9.3M (12.3%) YoY.

• Free cash flow for the nine months ended October 31, 2025: $(46.5)M, margin (19.5)%.

• Cash and cash equivalents at quarter end: $50.7M.

• Operating loss for Q3 2025: $16.2M; long-term debt: $159.1M.

Outlook and guidance

• Q4 2025 revenue expected between $85M and $87M; Adjusted EBITDA margin of 11%–13%.

• FY 2025 revenue guidance: $323.1M–$325.1M; Adjusted EBITDA margin of 4.9%–5.5%.

• Double-digit growth in ending active subscribers anticipated for FY 2025.

• Free cash flow for FY 2025 expected to be below $(40)M, mainly due to recapitalization costs.

• Fulfillment and technology expenses as a percentage of revenue expected to remain flat or slightly increase; marketing and G&A expenses expected to decrease.