Rent The Runway, Inc. · NASDAQ:RENT

Rent The Runway — Q1 2022 Earnings Presentation

25 slides from Rent The Runway's earnings presentation, Jun 9, 2022

  1. Slide 1: Q1 2022 Earnings Presentation

    RENT THE RUNWAY CONFIDENTIAL Q1 2022 Earnings Presentation June 9, 2022 1

  2. Slide 2: Forward-Looking Statements Disclaimer

    Forward-Looking Statements Disclaimer RENT THE RUNWAY This presentation contains forward-looking statements within the meaning of the the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be conside

  3. Slide 3: Q1'22 Key Metrics and Financial Highlights

    Q1’22 Key Metrics and Financial Highlights RENT RENT THE THE RUNWAY RUNWAY Total Revenue Active Subscribers Total Subscribers $67.1M 135.0K 177.2K up 100% YoY up 82% YoY up 70% YoY CONFIDENTIAL Gross Profit / Margin Net Loss / Margin Adj. EBITDA / Margin $22.5M / 34% $(42.5)M / (63)% $(8.8)M / (13)%

  4. Slide 4: Q1'22 Top Line Business Highlights

    Q1’22 Top Line Business Highlights RENT THE RUNWAY RENT THE RUNWAY 1. EVENTS RESURGENCE 2. SEARCH & DISCOVERY 3. FIT ● ~3x YoY increase in events/wedding content ● Back-end infrastructure investments to ● Tested personalized fit recommendations, across owned channels support an enhanced search experi

  5. Slide 5: Q1'22 Bottom Line Business Highlights

    Q1’22 Bottom Line Business Highlights RENT THE RUNWAY RENT THE RUNWAY 2. BUILD UPON WAREHOUSE 1. EXPAND AT-HOME 3. GROW EXCLUSIVE DESIGNS TECHNOLOGY TO REDUCE PICKUP TO ~30% OF UNITS ACQUIRED FULFILLMENT EXPENSES ● Expanded to over 20 markets covering over ● Completed rollout of RFID on all products

  6. Slide 6: Framework for Revenue Growth and Path to Profitability

    Framework for Revenue Growth and Path to Profitability RENT RENT THE THE RUNWAY RUNWAY Grow Revenue Leverage 3 Main Expense Categories Ongoing: Grow Subs Ongoing: Optimize Fulfillment Active Approach: Organic virality Fulfillment Approach: Diversify transportation + Subscribers + efficient marketing Cost

  7. Slide 7: Q1'22 Ending Active Subscribers, A New Record Level, +82% YoY

    Q1’22 Ending Active Subscribers, A New Record Level, +82% YoY RENT THE RUNWAY RENT THE RUNWAY Ending Subscribers (in thousands) 132 to CONFIDENTIAL 134 YoY Active Sub Growth (48)% (49)% (45)% (59)% 40% 80% 78% 110% 82% Pause % of Total Subs 42% 29% 23% 22% 28% 24% Note: FY19 ended January 31, 2020,

  8. Slide 8: Strong Q1'22 Revenue Growth, Up 100% YoY

    Strong Q1’22 Revenue Growth, Up 100% YoY RENT RENT THE THE RUNWAY RUNWAY Total Revenue, Net ($ in millions) Doubled revenue YoY 86% of revenue from subscribers in Q1’22 CONFIDENTIAL 28% of subscribers added one or more paid slots into their subscriptions in Q1’22 YoY Growth 8% (54)% (45)% (55)% (44)

  9. Slide 9: Targeting ~60% of FY22 Product Acquired via Non-Wholesale Channels

    Targeting ~60% of FY22 Product Acquired via Non-Wholesale Channels RENT RENT THE THE RUNWAY RUNWAY 44% % Items Acquired % Items Acquired % Items Acquired Target % Items Acquired in FY2019 in FY2020 in FY2021 in FY2022E 26% 54% 55% ~60% 11% 18% 22% 15% ~40% ~40% 46% CONFIDENTIAL 45% 33% 74% 36% 34% M

  10. Slide 10: Improved Order Economics Strengthen LTV/CAC

    Improved Order Economics1 Strengthen LTV/CAC RENT THE RUNWAY FY20 Net Order Economics in $150 FY21 were 13 points higher FY21 FY19 than FY19, benefiting from: $133 Revenue per Order $127 34% (1) Lower fulfillment costs 30% due to structural Less: 46% program changes Fulfillment Expense 12% (2) Lower re

  11. Slide 11: Our Business Model - Revenue to Gross Profit

    Our Business Model - Revenue to Gross Profit RENT THE RUNWAY RENT THE RUNWAY Fiscal Quarter Ended April 30, 2022 % of Revenue 34 % 20 % 12% 34 % $ in millions CONFIDENTIAL Fiscal Quarter Ended April 30, 2021 % of Revenue 26% 38 % 12 % 24 % $ in millions 1111 Note: Calculations based on unrounded figur

  12. Slide 12: Our Business Model - Gross Profit to Adjusted EBITDA

    Our Business Model - Gross Profit to Adjusted EBITDA RENT THE RUNWAY RENT THE RUNWAY Fiscal Quarter Ended April 30, 2022 % of Revenue 34% 13% 20% 44% 6% 8% 27% 2% (13)% $ in millions CONFIDENTIAL Fiscal Quarter Ended April 30, 2021 % of 24% 8% 29% 57% 15% 6% 53% 7% (19)% Revenue $ in millions 1212 No

  13. Slide 13: Demonstrating Our Operating Leverage with Scale

    Demonstrating Our Operating Leverage with Scale RENT RENT THE THE RUNWAY RUNWAY Revenue: $34M $67M Δ in % of Revenue from Q1’21 to Q1’22 CONFIDENTIAL Q1 2021 → Q1 2022 ● 17% of Product depreciation and revenue share absorbed over higher revenue due to better matching of product supply to active subs

  14. Slide 14: Q2 2022 and Fiscal Year 2022 Guidance

    Q2 2022 and Fiscal Year 2022 Guidance RENT RENT THE THE RUNWAY RUNWAY Q2 2022 Guidance Total Revenue: $72.0M - $74.0M Adjusted EBITDA1: $(4.0)M - $(3.0)M CONFIDENTIAL Fiscal Year 2022 Guidance Total Revenue: $295M - $305M Adjusted EBITDA1: (6)% - (5)% of Revenue Rental Product Acquired2: ~$60M Share

  15. Slide 15: Appendix

    15 RENT THE THE RUNWAY RUNWAY CONFIDENTIAL 15 RENT Appendix

  16. Slide 16: Continuing to Improve Annual Margins

    Continuing to Improve Annual Margins RENT THE RUNWAY RENT THE RUNWAY CONFIDENTIAL Note: See GAAP to Non-GAAP Reconciliation in appendix. Free cash flow margin defined as net cash used in operating activities plus net cash used in investing activities, as a percentage of total revenue. 1616

  17. Slide 17: Product Acquisition Strategy Has Meaningfully Improved Annual FCF

    Product Acquisition Strategy Has Meaningfully Improved Annual FCF1 RENT THE RUNWAY ($ in millions) Product Costs - Gross Margin Impact Product costs are the most FY19 FY20 FY21 significant component of our Product Depreciation 29% 44% 25% cash consumption Revenue Share 4% 12% 11% Total as a % of Reve

  18. Slide 18: Condensed Consolidated Statements of Operations

    Condensed Three Three RENT THE RUNWAY RENT THE RUNWAY Months Months Consolidated Ended Ended Year Ended Year Ended 4/30/22 4/30/21 1/31/22 1/31/21 Statements of (in millions) Total revenue, net $67.1 $33.5 $203.3 $157.5 Operations Fulfillment Technology 22.9 13.6 8.8 9.7 61.9 45.3 53.0 37.7 Marketing

  19. Slide 19: Condensed Consolidated Balance Sheets

    Condensed RENT RENT THE Consolidated THE RUNWAY As Of 4/30/22 As Of 1/31/22 RUNWAY (in millions) Balance Sheets Cash and cash equivalents $219.0 $247.6 Restricted cash, current 5.0 5.4 Prepaid expenses and other current assets 10.8 11.7 Rental product, net 81.7 76.3 Fixed assets, net 54.0 57.2 CONFI

  20. Slide 20: Condensed Consolidated Statements of Cash Flows

    Condensed RENT THE RUNWAY Consolidated Three Months Three Months Statements Ended Ended Year Ended Year Ended 4/30/22 4/30/21 1/31/22 1/31/21 of Cash Flows (in millions) Net loss $(42.5) $(42.3) $(211.8) $(171.1) Net cash (used in) provided by operating activities (17.4) (9.0) (42.3) (42.8) Net cash

  21. Slide 21: Selected Cash Flows Detail and Supplemental Cash Flow Information

    Selected Cash RENT RENT THE Flows Detail and THE RUNWAY RUNWAY Three Months Three Months Supplemental Ended Ended Year Ended Year Ended 4/30/22 4/30/21 1/31/22 1/31/21 Cash Flow (in millions) INVESTING ACTIVITIES Information Purchases of rental product $(13.4) $(4.4) $(30.8) $(54.9) Proceeds from li

  22. Slide 22: Reconciliation of Purchases of Rental Product to Rental Product Acquired

    Reconciliation RENT RENT THE of Purchases THE RUNWAY RUNWAY of Rental Three Three Months Months Year Year Ended Ended Ended Ended Product to (in millions) 4/30/22 4/30/21 1/31/22 1/31/21 Rental Purchases of rental product $(13.4) $(4.4) $(30.8) $(54.9) Cost of owned rental product paid for in the pe

  23. Slide 23: Reconciliation of Net Loss to Adjusted EBITDA

    Reconciliation RENT RENT THE Three Three of Net Loss to THE RUNWAY Months Months RUNWAY Ended Ended Year Ended Year Ended Year Ended 4/30/22 4/30/21 1/31/22 1/31/21 1/31/20 Adjusted (in millions) EBITDA Net loss $(42.5) $(42.3) $(211.8) $(171.1) $(153.9) Interest (income) / expense, net 9.3 14.5 53.

  24. Slide 24: Reconciliation of Cash Used by Operating Activities to Free Cash Flow

    Reconciliation RENT RENT THE of Cash Used THE RUNWAY RUNWAY by Operating Three Three Months Months Ended Ended Year Ended Year Ended Year Ended Activities to 4/30/22 4/30/21 1/31/22 1/31/21 1/31/20 Free Cash (in millions) Net cash (used in) provided by operating activities $(17.4) $(9.0) $(42.3) $(4

  25. Slide 25: Operating Expense Detail

    Operating RENT THE RUNWAY Three Months Three Months Expense Detail (in millions) Ended 4/30/22 Ended 4/30/21 Technology $13.6 $9.7 Marketing 8.7 2.6 General and administrative 29.2 19.0 Total operating expenses $51.5 $31.3 Less: Share-based compensation 5.5 1.9 Total operating expenses excluding sha

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