The RealReal (REAL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 11% year-over-year to $145 million, with GMV up 4% to $441 million and consignment revenue rising 17% year-over-year.

• Adjusted EBITDA improved by $21 million year-over-year to $(1.8) million, marking the 11th consecutive quarter of improvement.

• Net loss narrowed to $16.7 million, or (11.5)% of revenue, a $25 million improvement year-over-year.

• Active buyers reached 381,000, up 9% year-over-year on a trailing three-month basis.

• Strategic focus on profitable growth, operational efficiencies, and leveraging AI and data assets.

Financial highlights

• Gross margin improved to 74.1%–75%, up over 800 basis points year-over-year, with gross profit rising to $107 million.

• Consignment revenue grew 17% year-over-year to $112.7 million, while direct revenue declined 20% to $16.7 million.

• Adjusted EBITDA margin improved to (1.2)% from (17.1)% in Q2 2023.

• Cash and equivalents at quarter end were $150.7 million, with inventory at $21 million.

• Free cash flow for Q2 was $(11.7) million, improved from $(41.8) million in Q2 2023.

Outlook and guidance

• Q3 2024 guidance: GMV $410–$430 million, revenue $135–$142 million, Adjusted EBITDA $(2)–$1 million.

• Full year 2024 guidance: GMV $1.79–$1.82 billion, revenue $580–$595 million, Adjusted EBITDA $0–$6 million; midpoint of Adjusted EBITDA guidance raised.

• Guidance reflects expectation of usual seasonal pattern and a prudent view on potential consumer spending slowdown.