Business
The RealReal Announces Second Quarter 2023 Results
Q2 2023 Gross Profit Margin Increased 908 basis points Year-Over-YearQ2 2023 Net Income of $(41.3) million or (31.6)% of Total RevenueQ2 2023 Adjusted EBITDA
About this update from The Realreal, Inc.
[{"type":"text","content":"Q2 2023 Gross Profit Margin Increased 908 basis points Year-Over-YearQ2 2023 Net Income of $(41.3) million or (31.6)% of Total RevenueQ2 2023 Adjusted EBITDA of $(22.3) million or (17.1)% of Total Revenue SAN FRANCISCO, Aug. 08, 2023 (GLOBE NEWSWIRE) -- The RealReal (Nasdaq: REAL)—the world’s largest online marketplace for authenticated, resale luxury goods—today reported financial results for its second quarter ended June 30, 2023. Second quarter 2023 gross merchandise value (GMV) and total revenue decreased 7% and 15% respectively, compared to the second quarter of 2022, which was driven in part by our purposeful reduction in direct revenue. For the second quarter of 2023, direct revenue was 16% of total revenue compared to 28% of total revenue during the same period in 2022. As a result, the company reported higher gross margins compared to the same period in 2022. “Our strategic shift to re-focus on the higher margin portion of the consignment business is showing results. In the second quarter of 2023, GMV and revenue exceeded the mid-point of our guidance, and Adjusted EBITDA exceeded the high-end of our guidance range for the quarter,” said John Koryl, Chief Executive Officer of The RealReal. Koryl continued, “During the second quarter, we continued to transition away from company-owned inventory and consigned items that sell for under $100, which are not profitable for The RealReal. These actions resulted in higher average order value, a higher gross margin rate, reduced company-owned inventory, and a smaller Adjusted EBITDA loss compared to the prior year. We view the shift to a higher gross margin rate as a structural change to our business model. Therefore, we believe the changes implemented in 2023 will reset the company to a slightly smaller but more profitable business. With this new margin structure, we expect to return to profitable top-line growth next year and we continue to project that we are on track to achieve Adjusted EBITDA profitability on a full year basis in 2024.” Second Quarter Financial Highlights GMV was $423 million, a decrease of 7% compared to the same period in 2022Total Revenue was $131 million, a decrease of 15% compared to the same period in 2022Gross Margin was 65.9%, an increase of 908 basis points compared to the same period in 2022Net Loss was $41.3 million or (31.6)% of total revenue com...