Rent The Runway, Inc. · NASDAQ:RENT
Rent The Runway — Q3 2024 Earnings Presentation
32 slides from Rent The Runway's earnings presentation, Dec 9, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation December 9, 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 Q3 2024 Summary 02 Recent Business Highlights 03 Q4 + FY 2024 Guidance 33
Slide 4: Q3 2024 Summary
RENT THE RUNWAY Q3 2024 Summary 4
Slide 5: Q3'24 Key Metrics and Financial Highlights
Q3’24 Key Metrics and Financial Highlights RENT THE RUNWAY TOTAL REVENUE ACTIVE SUBSCRIBERS TOTAL SUBSCRIBERS 132.5K, Up 1% YoY $75.9M AVERAGE ACTIVE SUBSCRIBERS 174.5K Up 5% YoY 130.8K, Down 3% YoY Down 1% YoY GROSS PROFIT / MARGIN NET LOSS / MARGIN ADJ. EBITDA / MARGIN $26.3M / 35% $(18.9)M / (25)
Slide 6: Active Subscribers as of October 31, 2024 Up 0.6% YoY
Active Subscribers as of October 31, 2024 Up 0.6% YoY RENT THE RUNWAY SUBSCRIBERS (IN THOUSANDS) YoY Active Subs 40% 80% 78% 110% 82% 27% 15% 10% 8% 11% (2)% (1)% 0% (6)% 1% YoY Avg Active Subs (31)% 60% 79% 93% 94% 51% 20% 12% 9% 9% 4% (1)% (0)% (3)% (3)% Paused % of Total 29% 23% 22% 28% 24% 28% 2
Slide 7: Total Revenue Up 5% YoY in Q3'24
Total Revenue Up 5% YoY in Q3’24 RENT THE RUNWAY TOTAL REVENUE, NET ($ IN MILLIONS) Subscriber Highlights ● 87% of revenue from subscribers in Q3’24 ● 24% of subscribers added one or more paid items into their subscriptions in Q3’24 YoY Growth (44)% 62% 66% 91% 100% 64% 31% 18% 11% (1)% (6)% 1% 1% 4
Slide 8: Revenue to Gross Profit - Q3'24 and Q3'23
Revenue to Gross Profit - Q3’24 and Q3’23 RENT THE RUNWAY FISCAL QUARTER ENDED OCTOBER 31, 2024 % of Revenue 28% 22% 15% 35% $ IN MILLIONS FISCAL QUARTER ENDED OCTOBER 31, 2023 % of Revenue 30% 21% 14% 35% $ IN MILLIONS 8 Note: Calculations are based on unrounded figures.
Slide 9: Gross Profit to Adjusted EBITDA - Q3'24 and Q3'23
Gross Profit to Adjusted EBITDA - Q3’24 and Q3’23 RENT THE RUNWAY FISCAL QUARTER ENDED OCTOBER 31, 2024 % of Revenue 35% (9)% (11)% (28)% (4)% (0)% 3% 26% 0% 2% 12% $ IN MILLIONS FISCAL QUARTER ENDED OCTOBER 31, 2023 % of Revenue 35% (10)% (17)% (34)% (5)% 0% 7% 26% 0% 2% 5% $ IN MILLIONS Note: See G
Slide 10: Adjusted EBITDA to Free Cash Flow - YTD'24 and YTD'23
Adjusted EBITDA to Free Cash Flow - YTD’24 and YTD’23 RENT THE RUNWAY NINE MONTHS ENDED October 31, 2024 % of Revenue 13% (18)% (1)% 1% 1% 0% (4)% $ IN MILLIONS NINE MONTHS ENDED October 31, 2023 % of Revenue 7% (25)% (1)% (0)% (1)% 0% (21)% $ IN MILLIONS Note: See GAAP to Non-GAAP Reconciliation in
Slide 11: Recent Business Highlights
RENT THE RUNWAY Recent Business Highlights 11
Slide 12: Our Reserve Offering Saw Strong YoY Improvement in Orders Throughout Q3
Our Reserve Offering Saw Strong YoY Improvement in Orders RENT THE RUNWAY Throughout Q3 YoY Reserve Orders (Overall, New to Brand, Repeat) Q3 Reserve Highlights ➔ New Customers into Reserve were up 22% YTD YoY and 36% Q3 YoY ➔ Increased the productivity of our highest demanded reserve styles ➔ Octob
Slide 13: We Continue to Re-Ignite Our Brand By Highlighting Our Customers and Launching New Partnerships
We Continue to Re-Ignite Our Brand By Highlighting Our RENT THE RUNWAY Customers and Launching New Partnerships In celebration of our 15 year anniversary, we launched our new As part of our ongoing RTR Icons franchise, we launched a tagline “Own Nothing, Have Everything” and celebrated by two season
Slide 14: SEO Improvements Drove Growth in Impressions
SEO Improvements Drove Growth in Impressions RENT THE RUNWAY Impressions and Ranking Growth Q3 SEO Highlights ➔ Optimized pages and content to improve the ranking for keywords +26% +55% +53% ➔ Total site organic search impressions grew 55% Q-o-Q ➔ Total non-branded impressions grew 53% Q-o-Q ➔ Total
Slide 15: Launched a New Subscription Plan Giving Access to RTR Marquee Designer Brands
Launched a New Subscription Plan that for the First Time gives Access to RENT THE RUNWAY RTR Marquee Designer Brands in a 1-Shipment a Month Plan $119 5-Item/1 Shipment Plan Rationale ➔ For segment of customers who are more price sensitive and want 1-shipment per month (easier entry into the brand)
Slide 16: We Improved How We Merchandise Inventory, Making it Easier to Discover Styles
We Improved How We Merchandise Inventory, Making it Easier to Discover RENT THE RUNWAY Styles to Rent Q3 Merchandising Highlights ➔ Added site placements and merchandising for top viewed categories and grids ➔ Personalization enhancements led to 3x improvement in CTR ➔ Increased frequency of visual
Slide 17: Initiatives to Enhance the Onboarding Experience for Our Subscribers
We Launched Several Initiatives Designed to Enhance the Onboarding RENT THE RUNWAY Experience for Our Subscribers Customer Promise Style Quiz 1:1 Styling Appointments We want her to rent with confidence without any Right after she joins, she’s asked to complete a Style Survey She can book styling app
Slide 18: Q4 + FY 2024 Guidance
RENT THE RUNWAY Q4 + FY 2024 Guidance 18
Slide 19: Q4 & Fiscal Year 2024 Guidance
Q4 & Fiscal Year 2024 Guidance RENT THE RUNWAY Q4 2024 Guidance Total Revenue: $74.4 M - $80.3 M Adjusted EBITDA: $16.1 M - $20.1 M FY2024 Guidance Total Revenue: $304.2 M - $310.1 M; 2% - 4% YoY Growth Adjusted EBITDA Margin1: 15% - 16% of Total Revenue Rental Product Acquired2: ~$48M - $51M Share-
Slide 20: Appendix
20 RENT THE RUNWAY Appendix
Slide 21: 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 22: 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 22 basis. Margins calc
Slide 23: Condensed Consolidated Statements of Operations
Condensed RENT THE RUNWAY Consolidated Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended Year Ended Year Ended 10/31/2024 10/31/2023 10/31/2024 10/31/2023 1/31/2024 1/31/2023 Statements (In millions, except per share amounts) Total revenue, net $75.9 $72.5 $229.8 $222.4 $298.
Slide 24: Condensed Consolidated Balance Sheets
Condensed RENT THE RUNWAY Consolidated Balance Sheets As Of 10/31/2024 As Of 1/31/2024 (in millions) Cash and cash equivalents $74.1 $84.0 Restricted cash, current 4.6 5.2 Prepaid expenses and other current assets 9.6 13.0 Restricted cash, fixed 4.4 4.8 Rental product, net 89.1 94.0 Fixed and intangi
Slide 25: Condensed Consolidated Statements of Cash Flows
Condensed RENT THE RUNWAY Consolidated Statements of Cash Flows Nine Months Nine Months Ended Ended Year Ended 10/31/2024 10/31/2023 1/31/2024 (in millions) Net loss $(56.5) $(88.4) $(113.2) Net cash (used in) provided by operating activities 11.5 (7.7) (15.7) Net cash (used in) provided by investin
Slide 26: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY of Net Loss to Free Cash Flow Nine Months Ended Nine Months Ended Year Ended Year Ended Year Ended 10/31/2024 10/31/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net loss $(56.5) $(88.4) $(113.2) $(138.7) $(211.8) Operating loss (39.8) (60.7) (80.0) (103.6) (125.9)
Slide 27: Selected Cash Flows Detail and Supplemental Cash Flow Information
Selected Cash RENT THE RUNWAY Flows Detail and Supplemental Nine Months Nine Months Cash Flow (in millions) Ended 10/31/2024 Ended 10/31/2023 Year Ended 1/31/2024 Year Ended 1/31/2023 Information INVESTING ACTIVITIES Purchases of rental product $(41.4) $(56.3) $(77.9) $(62.1) Proceeds from liquidati
Slide 28: Reconciliation of Purchases of Rental Product to Rental Product Acquired
Reconciliation RENT THE RUNWAY of Purchases of Rental Product to Rental Nine Months Nine Months Year Year Product (in millions) Ended 10/31/2024 Ended 10/31/2023 Ended 1/31/2024 Ended 1/31/2023 Acquired Purchases of rental product $(41.4) $(56.3) $(77.9) $(62.1) Cost of owned rental product paid for
Slide 29: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation RENT THE RUNWAY of Net Loss to Three Three Three Three Nine Nine Months Months Months Months Months Months Ended Ended Ended Ended Ended Ended Year Ended Year Ended Year Ended Adjusted 10/31/2024 10/31/2023 7/31/2024 7/31/2023 10/31/2024 10/31/2023 1/31/2024 1/31/2023 1/31/2022 (in mi
Slide 30: 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 Nine Months Ended Nine Months Ended Year Ended Year Ended Year Ended 10/31/2024 10/31/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net cash (used in) provided by operating activities $11.5 $(7.7) $(15.7) $(47.7
Slide 31: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY Nine Months Ended Nine Months Ended of Net Loss to 10/31/2024 10/31/2023 (in millions) Free Cash Net loss $(56.5) $(88.4) Interest (income) / expense, net $17.7 $28.3 Rental product depreciation $47.6 $40.4 Flow Other depreciation and amortization Share-based compensat
Slide 32: Operating Expense Detail
Operating RENT THE RUNWAY Expense Detail Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended 10/31/2024 10/31/2023 10/31/2024 10/31/2023 (in millions) Technology $8.7 $12.1 $27.0 $38.1 Marketing $7.1 $7.1 $23.9 $24.6 General and administrative $21.2 $24.4 $66.2 $76.8 Total oper