Rent The Runway, Inc. · NASDAQ:RENT
Rent The Runway — Q1 2024 Earnings Presentation
33 slides from Rent The Runway's earnings presentation, Jun 6, 2024
Slide 1: Q1 2024 Earnings Presentation
Q1 2024 Earnings Presentation June 6, 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 Q1 2024 Summary 02 Recent Business Highlights 03 Q2 + FY2024 Guidance 33
Slide 4: Q1 2024 Summary
RENT THE RUNWAY Q 1 2024 Summary 4
Slide 5: Q1'24 Key Metrics and Financial Highlights
Q1’24 Key Metrics and Financial Highlights RENT THE RUNWAY TOTAL REVENUE ACTIVE SUBSCRIBERS TOTAL SUBSCRIBERS 145.8K, Up Slightly YoY $75.0M AVERAGE ACTIVE SUBSCRIBERS 185.3K Up 1.1% YoY 135.9K, Relatively Flat YoY Relatively Flat YoY GROSS PROFIT / MARGIN NET LOSS / MARGIN ADJ. EBITDA / MARGIN $28.
Slide 6: Active Subscribers as of April 30, 2024 Up 0.4% YoY
Active Subscribers as of April 30, 2024 Up 0.4% YoY RENT THE RUNWAY SUBSCRIBERS (IN THOUSANDS) YoY Active Subs 40% 80% 78% 110% 82% 27% 15% 10% 8% 11% (2)% (1)% 0% YoY Avg Active Subs (31)% 60% 79% 93% 94% 51% 20% 12% 9% 9% 4% (1)% (0)% Paused % of Total 29% 23% 22% 28% 24% 28% 24% 26% 22% 25% 25% 2
Slide 7: Total Revenue Up 1% YoY in Q1'24
Total Revenue Up 1% YoY in Q1’24 RENT THE RUNWAY TOTAL REVENUE, NET ($ IN MILLIONS) Subscriber Highlights ● 88% of revenue from subscribers in Q1’24 ● 26% of subscribers added one or more paid items into their subscriptions in Q1’24 YoY Growth (44)% 62% 66% 91% 100% 64% 31% 18% 11% (1)% (6)% 1% 1% N
Slide 8: Revenue to Gross Profit - Q1'24 and Q1'23
Revenue to Gross Profit - Q1’24 and Q1’23 RENT THE RUNWAY FISCAL QUARTER ENDED APRIL 30, 2024 % of Revenue 27% 20% 15% 38% $ IN MILLIONS FISCAL QUARTER ENDED APRIL 30, 2023 % of Revenue 30% 16% 12% 42% 8 Note: Calculations are based on unrounded figures.
Slide 9: Gross Profit to Adjusted EBITDA - Q1'24 and Q1'23
Gross Profit to Adjusted EBITDA - Q1’24 and Q1’23 RENT THE RUNWAY FISCAL QUARTER ENDED APRIL 30, 2024 % of Revenue 38% (12)% (13)% (30)% (4)% (0)% 4% 24% 0% 2% 9% $ IN MILLIONS FISCAL QUARTER ENDED APRIL 30, 2023 % of Revenue 42% (13)% (18)% (36)% (5)% 0% 12% 21% 0% 1% 6% Note: See GAAP to Non-GAAP R
Slide 10: Adjusted EBITDA to Free Cash Flow - Q1'24 and Q1'23
Adjusted EBITDA to Free Cash Flow - Q1’24 and Q1’23 RENT THE RUNWAY FISCAL QUARTER ENDED APRIL 30, 2024 % of Revenue 9% (17)% (1)% 1% 7% 0% (2)% $ IN MILLIONS FISCAL QUARTER ENDED APRIL 30, 2023 % of Revenue 6% (20)% (1)% (0)% (1)% 0% (16)% Note: See GAAP to Non-GAAP Reconciliation in appendix. Free
Slide 11: Recent Business Highlights
RENT THE RUNWAY Recent Business Highlights 11
Slide 12: We Began to Reignite our Brand IRL in NYC and Atlanta
We Began to Reignite our Brand IRL in NYC and Atlanta RENT THE RUNWAY Our multi-prong acquisition and win-back strategy married earned media, influencer marketing and consumers at our NYC flagship and Atlanta pop-up to surprise, delight and engage the community. FIRST UP - NEW YORK CITY “I remember
Slide 13: We Launched New Paid Creative in May with a Top of Funnel Approach
We Launched New Paid Creative in May with a Top of Funnel RENT THE RUNWAY and Creative Approach Prioritized top of funnel creative approach re-positioning Rent the Runway as a fashion-first brand, utilizing visual storytelling to communicate our brand key reasons to believe and tapping into unique a
Slide 14: We Launched our Summer "Make it a Moment" Creative Refresh
We Launched our Summer “Make it a Moment” Creative RENT THE RUNWAY Refresh with Big Plans for the Rest of FY24 RUNWAY We are focused on visual consistency, aimed at reinforcing our fashion credibility, and plan to bring users down the funnel to understand how a fashion subscription can work for thei
Slide 15: Our Lifecycle Efforts Focus on Driving More Revenue per Customer Segment
Our Lifecycle Efforts Focus on Driving More Revenue per RENT THE RUNWAY Customer Segment In April, we launched multiple reactivation campaigns across email, push, SMS, CX calls and CX emails. And leveraged our Customer Experience team as a powerful reactivation channel. Daily Un-Pausers Before and D
Slide 16: We are Focused on Improving How We Merchandise Inventory
We are Focused on Improving How We Merchandise Inventory, RENT THE RENT Aimed at Making it Easier to Discover Styles to Rent THE RUNWAY RUNWAY USE CASE HUBS / BOUTIQUES NEW APP BROWSE TAB & GRIDS Aimed at increasing traic, conversion and customer engagement Aimed at increasing customer engagement a
Slide 17: We're Attacking Critical Pathways in Customer Journey
We’re Attacking Critical Pathways in Customer Journey With a Goal RENT THE RUNWAY of Improving Conversion STREAMLINED INCREASED THE PHOTO CHECKOUT PROCESS $54 REVIEWS Which already increased Reviews per unit subscription rented increased checkout over 8x in Q1 completion rate by $54.00 20%+ 17
Slide 18: We Plan to Expand the Reserve Assortment
We Plan to Expand the Reserve Assortment to Win Dresses for Every Customer Psychographic Gen - Z Fashion Enthusiasts Classic Customers
Slide 19: Q2 + FY2024 Guidance
RENT THE RUNWAY Q2 + FY2024 Guidance 19
Slide 20: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance RENT THE RUNWAY Q2 2024 Guidance Total Revenue: $76M - $78M Adjusted EBITDA Margin1: 14%-15% of Total Revenue FY2024 Guidance Total Revenue: $301M - $316M; 1% - 6% YoY Growth Adjusted EBITDA Margin1: 15% - 16% of Total Revenue Rental Product Acquired2: ~$48M - $50M Share-ba
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: Appendix
22 RENT THE RUNWAY Appendix
Slide 23: 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 plus net cash (used in) provided by investing activities. Margins 23 calculated as percentag
Slide 24: Condensed Consolidated Statements of Operations
Condensed RENT THE RUNWAY Three Months Three Months Ended Ended Year Ended Year Ended Consolidated (In millions, except per share amounts) 4/30/2024 4/30/2023 1/31/2024 1/31/2023 Statements Total revenue, net Fulfillment $75.0 20.6 $74.2 21.9 $298.2 86.0 $296.4 92.2 of Operations Technology 9.6 13.1
Slide 25: Condensed Consolidated Balance Sheets
Condensed RENT THE RUNWAY Consolidated Balance Sheets As Of 4/30/2024 As Of 1/31/2024 (in millions) Cash and cash equivalents $82.0 $84.0 Restricted cash, current 5.2 5.2 Prepaid expenses and other current assets 12.1 13.0 Restricted cash, fixed 4.8 4.8 Rental product, net 99.7 94.0 Fixed and intangi
Slide 26: Condensed Consolidated Statements of Cash Flows
Condensed RENT THE RUNWAY Consolidated Statements of Cash Flows Three Three Months Months Ended Ended Year Ended Year Ended Year Ended 4/30/2024 4/30/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net loss $(22.0) $(30.1) $(113.2) $(138.7) $(211.8) Net cash (used in) provided by operating activiti
Slide 27: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY of Net Loss to Free Cash Flow Three Months Three Months Ended Ended Year Ended Year Ended Year Ended 4/30/2024 4/30/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net loss $(22.0) $(30.1) $(113.2) $(138.7) $(211.8) Operating loss (16.5) (21.3) (80.0) (103.6) (125.9)
Slide 28: Selected Cash Flows Detail and Supplemental Cash Flow Information
Selected Cash RENT THE RUNWAY Flows Detail and Supplemental Three Months Three Months Cash Flow Ended 4/30/2024 Ended 4/30/2023 Year Ended 1/31/2024 Year Ended 1/31/2023 Information (in millions) INVESTING ACTIVITIES Purchases of rental product $(13.1) $(14.6) $(77.9) $(62.1) Proceeds from liquidati
Slide 29: Reconciliation of Purchases of Rental Product to Rental Product Acquired
Reconciliation RENT THE RUNWAY of Purchases of Rental Product to Rental Three Months Three Months Year Year Product Ended Ended Ended Ended 4/30/2024 4/30/2023 1/31/2024 1/31/2023 (in millions) Acquired Purchases of rental product $(13.1) $(14.6) $(77.9) $(62.1) Cost of owned rental product paid for
Slide 30: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation RENT THE RUNWAY of Net Loss to Adjusted Three Months Ended 4/30/2024 Three Months Ended 4/30/2023 Year Ended 1/31/2024 Year Ended 1/31/2023 Year Ended 1/31/2022 EBITDA (in millions) Net loss $(22.0) $(30.1) $(113.2) $(138.7) $(211.8) Interest (income) / expense, net 5.6 8.8 33.7 36.8
Slide 31: 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 Three Months Three Months Ended Ended Year Ended Year Ended Year Ended 4/30/2024 4/30/2023 1/31/2024 1/31/2023 1/31/2022 (in millions) Net cash (used in) provided by operating activities $4.6 $(3.3) $(15.7) $(47.7)
Slide 32: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY Three Months Three Months Year Ended Year Ended of Net Loss to Ended 4/30/2024 Ended 4/30/2023 1/31/2024 1/31/2023 (in millions) Free Cash Net loss $(22.0) $(30.1) $(113.2) $(138.7) Interest (income) / expense, net $5.6 $8.8 $33.7 $36.8 Rental product depreciation $14.
Slide 33: Operating Expense Detail
Operating RENT THE RUNWAY Expense Detail Three Months Ended 4/30/2024 Three Months Ended 4/30/2023 (in millions) Technology $9.6 $13.1 Marketing $9.0 $9.3 General and administrative $22.8 $26.5 Total operating expenses $41.4 $48.9 Less: Share-based compensation $3.0 $8.8 Total operating expenses exc