Rent The Runway, Inc. · NASDAQ:RENT
Rent The Runway — Q2 2024 Earnings Presentation
31 slides from Rent The Runway's earnings presentation, Sep 5, 2024
Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation September 5, 2024
Slide 2: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer RENT THE RUNWAY This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this presentation that do not relate to maers of historical fact should be considered forward-loo
Slide 3: Contents
Contents RENT THE RUNWAY TBU 01 Q2 2024 Summary 02 Recent Business Highlights 03 Q3 + FY 2024 Guidance 33
Slide 4: Q2 2024 Summary
RENT THE RUNWAY Q2 2024 Summary 4
Slide 5: Q2'24 Key Metrics and Financial Highlights
Q2’24 Key Metrics and Financial Highlights RENT THE RUNWAY TOTAL REVENUE ACTIVE SUBSCRIBERS TOTAL SUBSCRIBERS 129.1K, Down 6% YoY $78.9M AVERAGE ACTIVE SUBSCRIBERS 175.1K Up 4% YoY 137.5K, Down 3% YoY Down 5% YoY GROSS PROFIT / MARGIN NET LOSS / MARGIN ADJ. EBITDA / MARGIN $32.4M / 41% $(15.6)M / (2
Slide 6: Active Subscribers as of July 31, 2024 Down 6.2% YoY
Active Subscribers as of July 31, 2024 Down 6.2% YoY RENT THE RUNWAY SUBSCRIBERS (IN THOUSANDS) YoY Active Subs 40% 80% 78% 110% 82% 27% 15% 10% 8% 11% (2)% (1)% 0% (6)% YoY Avg Active Subs (31)% 60% 79% 93% 94% 51% 20% 12% 9% 9% 4% (1)% (0)% (3)% Paused % of Total 29% 23% 22% 28% 24% 28% 24% 26% 22
Slide 7: Total Revenue Up 4% YoY in Q2'24
Total Revenue Up 4% YoY in Q2’24 RENT THE RUNWAY TOTAL REVENUE, NET ($ IN MILLIONS) Subscriber Highlights ● 89% of revenue from subscribers in Q2’24 ● 25% of subscribers added one or more paid items into their subscriptions in Q2’24 YoY Growth (44)% 62% 66% 91% 100% 64% 31% 18% 11% (1)% (6)% 1% 1% 4
Slide 8: Revenue to Gross Profit - Q2'24 and Q2'23
Revenue to Gross Profit - Q2’24 and Q2’23 RENT THE RUNWAY FISCAL QUARTER ENDED JULY 31, 2024 % of Revenue 26% 21% 12% 41% $ IN MILLIONS FISCAL QUARTER ENDED JULY 31, 2023 % of Revenue 30% 17% 10% 44% $ IN MILLIONS 8 Note: Calculations are based on unrounded figures.
Slide 9: Gross Profit to Adjusted EBITDA - Q2'24 and Q2'23
Gross Profit to Adjusted EBITDA - Q2’24 and Q2’23 RENT THE RUNWAY FISCAL QUARTER ENDED JULY 31, 2024 % of Revenue 41% (10)% (11)% (28)% (4)% (0)% 3% 25% 0% 2% 17% $ IN MILLIONS FISCAL QUARTER ENDED JULY 31, 2023 % of Revenue 44% (11)% (17)% (34)% (5)% 0% 10% 22% 0% 2% 10% $ IN MILLIONS Note: See GAAP
Slide 10: Adjusted EBITDA to Free Cash Flow - 1H'24 and 1H'23
Adjusted EBITDA to Free Cash Flow - 1H’24 and 1H’23 RENT THE RUNWAY SIX MONTHS ENDED JULY 31, 2024 % of Revenue 13% (17)% (1)% 1% 1% 0% (4)% $ IN MILLIONS SIX MONTHS ENDED JULY 31, 2023 % of Revenue 8% (24)% (1)% (0)% (2)% 0% (20)% $ IN MILLIONS Note: See GAAP to Non-GAAP Reconciliation in appendix.
Slide 11: Recent Business Highlights
RENT THE RUNWAY Recent Business Highlights 11
Slide 12: Reserve Business Seeing YoY Improvement in Orders
Our Reserve Business is Seeing Impressive YoY Improvement in Orders RENT THE RUNWAY Due to Recent Cross-Functional Focus and Business Changes YoY Reserve Orders (Overall, New to Brand, Repeat) Recent / Upcoming Changes Increase Booking Window Improve End to End Customer Ongoing Experience Maximize I
Slide 13: Momentum in Marketing as We Bring Our Brand Back to Life
We are Continuing to See Momentum in Our Marketing as RENT THE RUNWAY We Bring Our Brand Back to Life This Fall We are expanding our creative partnerships during New York Southeast roadshow and mobile tour launching this Fall Fashion Week to showcase how to make the most of RTR focused on growing ma
Slide 14: 1H Tech and Product Projects are Showing Positive Results
1H Tech and Product Projects are Showing RENT THE RUNWAY Positive Results Launch of Delayed Account Creation Checkout Completion Rate 2 x ~ 14
Slide 15: Improved Site Experience and Enhanced Merchandising for 2H
Our Improved Site Experience Combined With Enhanced RENT THE RUNWAY Merchandising is Designed to Set Us Up for Success in 2H In 1H 24, we accomplished ~10x faster site load times, which resulted in around 30% lower bounce rate on our grids page. Beer PDPs New Browse Features Increased Photo Reviews
Slide 16: Q3 + FY2024 Guidance
RENT THE RUNWAY Q3 + FY2024 Guidance 16
Slide 17: Q3 & Fiscal Year 2024 Guidance
Q3 & Fiscal Year 2024 Guidance RENT THE RUNWAY Q3 2024 Guidance Total Revenue: $75M - $77M Adjusted EBITDA Margin1: 13%-15% of Total Revenue FY2024 Guidance Total Revenue: $304M - $316M; 2% - 6% YoY Growth Adjusted EBITDA Margin1: 15% - 16% of Total Revenue Rental Product Acquired2: ~$48M - $50M Sha
Slide 18: Projected Free Cash Flow - 1H to 2H
Projected Free Cash Flow - 1H 24 to 2H 24 RENT THE RUNWAY Projected Free Cash Flow Bridge 1H24 to 2H24* ● We anticipate reaching FCF breakeven in FY 24 ~$5.9 M largely due to the contribution from expenses, capex and working capital in 2H 24 ● High visibility on lower operating expenses and ~$0 M ca
Slide 19: Appendix
19 RENT THE RUNWAY Appendix
Slide 20: Our Primary Focus is to Become FCF Breakeven for FY24
Our Primary Focus is to Become FCF Breakeven for FY24 RENT THE RUNWAY Projected Free Cash Flow Bridge FY23 vs. FY24* ● We anticipate reaching FCF breakeven based on ~$0M a wide range of revenue FY23 Debt growth strategies Amendment Placed majority of ● Our cost base has FY24 rental reduced significan
Slide 21: Improved the Financial Profile of RTR Significantly Since FY21
Improved the Financial Profile of RTR Significantly Since FY21 RENT THE RUNWAY Note: See GAAP to Non-GAAP Reconciliation in appendix. Free cash flow defined as net cash (used in) provided by operating activities and net cash (used in) provided by investing activities on a combined 21 basis. Margins calc
Slide 22: Condensed Consolidated Statements of Operations
Condensed RENT THE RUNWAY Consolidated Three Months Ended Three Months Ended Six Months Ended Six Months Ended Year Ended Year Ended Statements (In millions, except per share amounts) 7/31/2024 7/31/2023 7/31/2024 7/31/2023 1/31/2024 1/31/2023 of Operations Total revenue, net $78.9 $75.7 $153.9 $149
Slide 23: Condensed Consolidated Balance Sheets
Condensed RENT THE RUNWAY Consolidated Balance Sheets As Of 7/31/2024 As Of 1/31/2024 (in millions) Cash and cash equivalents $76.6 $84.0 Restricted cash, current 5.2 5.2 Prepaid expenses and other current assets 10.8 13.0 Restricted cash, fixed 4.8 4.8 Rental product, net 85.9 94.0 Fixed and intangi
Slide 24: Condensed Consolidated Statements of Cash Flows
Condensed RENT THE RUNWAY Consolidated Statements of Cash Flows Six Months Six Months Year Ended Ended 7/31/2024 Ended 7/31/2023 1/31/2024 (in millions) Net loss $(37.6) $(56.9) $(113.2) Net cash (used in) provided by operating activities 6.8 (4.1) (15.7) Net cash (used in) provided by investing act
Slide 25: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY of Net Loss to Free Cash Flow Six Months Six Months Ended Ended Year Ended Year Ended Year Ended 7/31/2024 7/31/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net loss $(37.6) $(56.9) $(113.2) $(138.7) $(211.8) Operating loss (26.1) (38.8) (80.0) (103.6) (125.9) Inte
Slide 26: Selected Cash Flows Detail and Supplemental Cash Flow Information
Selected Cash RENT THE RUNWAY Flows Detail and Supplemental Cash Flow Six Months Six Months Year Ended Year Ended Information Ended 7/31/2024 Ended 7/31/2023 1/31/2024 1/31/2023 (in millions) INVESTING ACTIVITIES Purchases of rental product $(26.3) $(36.3) $(77.9) $(62.1) Proceeds from liquidation o
Slide 27: Reconciliation of Purchases of Rental Product to Rental Product Acquired
Reconciliation RENT THE RUNWAY of Purchases of Rental Product to Rental Six Months Ended Six Months Ended Year Ended Year Ended Product (in millions) 7/31/2024 7/31/2023 1/31/2024 1/31/2023 Acquired Purchases of rental product $(26.3) $(36.3) $(77.9) $(62.1) Cost of owned rental product paid for in
Slide 28: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation RENT THE RUNWAY of Net Loss to Adjusted Three Months Ended 7/31/2024 Three Months Ended 7/31/2023 Six Months Ended 7/31/2024 Six Months Ended 7/31/2023 Year Ended 1/31/2024 Year Ended 1/31/2023 Year Ended 1/31/2022 EBITDA (in millions) Net loss $(15.6) $(26.8) $(37.6) $(56.9) $(113.2)
Slide 29: Reconciliation of Cash Used by Operating Activities to Free Cash Flow
Reconciliation RENT THE RUNWAY of Cash Used by Operating Activities to Free Cash Flow Six Months Six Months Ended Ended Year Ended Year Ended Year Ended 7/31/2024 7/31/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net cash (used in) provided by operating activities $6.8 $(4.1) $(15.7) $(47.7) $(4
Slide 30: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY Six Months Ended Six Months Ended 7/31/2024 7/31/2023 of Net Loss to (in millions) Net loss $(37.6) $(56.9) Free Cash Interest (income) / expense, net Rental product depreciation $11.6 $31.1 $18.3 $24.9 Flow Other depreciation and amortization $6.6 $7.5 Share-based com
Slide 31: Operating Expense Detail
Operating RENT THE RUNWAY Expense Detail Three Months Ended Three Months Ended Six Months Ended Six Months Ended 7/31/2024 7/31/2023 7/31/2024 7/31/2023 (in millions) Technology $8.7 $12.9 $18.3 $26.0 Marketing $7.8 $8.2 $16.8 $17.5 General and administrative $22.2 $25.9 $45.0 $52.4 Total operating