Rent The Runway, Inc. · NASDAQ:RENT
Rent The Runway — Q3 2023 Earnings Presentation
30 slides from Rent The Runway's earnings presentation, Dec 5, 2023
Slide 1: Q3 2023 Earnings Presentation
RENT THE RUNWAY CONFIDENTIAL Q3 2023 Earnings Presentation December 5, 2023 1
Slide 2: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer RENT RENT THE THE RUNWAY 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 s
Slide 3: Improved the Financial Profile of RTR Significantly Since FY19
Improved the Financial Profile of RTR Significantly Since FY19 RENT THE RUNWAY RENT THE RUNWAY CONFIDENTIAL 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. Margi
Slide 4: Contents
Contents RENT RENT THE THE RUNWAY RUNWAY ➢ Q3 2023 Summary ➢ Q3 Business Highlights CONFIDENTIAL ➢ Q4 and FY 2023 Guidance 44
Slide 5: Q3 2023 Summary
RENT THE THE RUNWAY RUNWAY CONFIDENTIAL 55 RENT Q3 2023 Summary
Slide 6: Q3'23 Key Metrics and Financial Highlights
Q3’23 Key Metrics and Financial Highlights RENT RENT THE THE RUNWAY RUNWAY Total Revenue Active Subscribers Total Subscribers 131.7K, down 2% YoY $72.5M 175.9K Average Active Subs down 6% YoY 134.6K, up 4% YoY flat YoY CONFIDENTIAL Gross Profit / Margin Net Loss / Margin Adj. EBITDA / Margin $25.2M /
Slide 7: Active Subscribers as of October 31, 2023
Active Subscribers as of October 31, 2023 (2%) YoY RENT THE RUNWAY RENT THE RUNWAY Subscribers (in thousands) CONFIDENTIAL YoY Active Sub Growth 40% 80% 78% 110% 82% 27% 15% 10% 8% 11% -2% YoY Avg Active Sub Growth (31)% 60% 79% 93% 94% 51% 20% 12% 9% 9% 4% Pause % of Total Subs 29% 23% 22% 28% 24%
Slide 8: Total Revenue Down (6)% YoY in Q3'23
Total Revenue Down (6)% YoY in Q3’23 RENT THE RUNWAY RENT THE RUNWAY Total Revenue, Net ($ in millions) ● 88% of revenue from subscribers in Q3’23 CONFIDENTIAL ● 24% of subscribers added one or more paid items into their subscriptions in Q3’23 YoY Growth (44)% 62% 66% 91% 100% 64% 31% 18% 11% (1)% (
Slide 9: Revenue to Gross Profit - Q3'23 and Q3'22
Revenue to Gross Profit - Q3’23 and Q3’22 RENT THE RUNWAY RENT THE RUNWAY Fiscal Quarter Ended October 31, 2023 % of Revenue 30 % 21 % 14 % 35 % $ in millions CONFIDENTIAL Fiscal Quarter Ended October 31, 2022 % of Revenue 30 % 18 % 11 % 41 % $ in millions Note: Calculations are based on unrounded fig
Slide 10: Gross Profit to Adjusted EBITDA - Q3'23 and Q3'22
Gross Profit to Adjusted EBITDA - Q3’23 and Q3’22 RENT THE RUNWAY RENT THE RUNWAY Fiscal Quarter Ended October 31, 2023 % of 35% (10)% (17)% (34)% (5)% (0)% 7% 26% 0% (2)% 5% Revenue $ in millions CONFIDENTIAL Fiscal Quarter Ended October 31, 2022 % of 41% (13)% (18)% (33)% (5)% (8)% 9% 23% 8% (4)% 9
Slide 11: Adjusted EBITDA to Free Cash Flow - YTD'23 and YTD'22
Adjusted EBITDA to Free Cash Flow - YTD’23 and YTD’22 RENT THE RUNWAY RENT THE RUNWAY Nine Months Ended October 31, 2023 % of 7% (25)% (1)% (0)% (1)% (0)% (0)% (21)% Revenue $ in millions CONFIDENTIAL Nine Months Ended October 31, 2022 % of (0)% (20)% (4)% (7)% (1)% (1)% 0% (32)% Revenue $ in millio
Slide 12: Q3 2023 Business Highlights
12 RENT THE THE RUNWAY CONFIDENTIAL 12 RENT RUNWAY Q3 2023 Business Highlights
Slide 13: Churn Has Improved as Inventory Availability Has Increased
Churn Has Improved as Inventory Availability (In-Stock) Has RENT THE RUNWAY RENT THE RUNWAY Increased RUNWAY Year Over Year 90+ Day Customer Churn has ● As of Q3, in-stock rate was Inventory as a Reason for Churn has Decreased Improved with In-Stock 1400bps higher than Q2 ‘23 and 1200bps higher than
Slide 14: We Introduced "The Vault" - a New Category of Luxury Evening Wear
We Introduced "The Vault" - a New Category of Luxury Evening Wear RENT THE RUNWAY from 20+ Premium Designers ● Collection features styles with MSRPs up to $8,000 ● New to site brands like Oscar de la Renta, Etro, Brandon Maxwell and more available to rent for the very first time ● Offered exclusively
Slide 15: We Drove Record Adoption of RTR Concierge Service
We Drove Record Adoption of RTR Concierge Service RENT THE RUNWAY RUNWAY ● Our SMS-based styling and support service, RTR Concierge has reached an all-time high adoption rate with over 30% of new subscribers opting in as of end of Q3 ● We have seen sustained retention improvements not only for custo
Slide 16: We Have Grown Our Resale Business with "Try Before You Buy"
We Have Grown Our Resale Business and Believe that Our “Try RENT THE RUNWAY Before You Buy” Model is a Powerful Sales Channel RUNWAY ● Purchase rate is up 50% in units sold vs. last year, indicating that pricing & the assortment are resonating ● The vast majority of these at-home sales have recovery
Slide 17: Customers Are More Satisfied With Our New Cohort of Inventory
Our Customers Are Increasingly More Satisfied With Our New RENT THE RUNWAY RENT THE RUNWAY Cohort of Inventory vs. Last Year RUNWAY Satisfaction Rate with Inventory is 2H’23 Buy Is Receiving >30% More Higher YoY Driven By Accessories, Hearts per Style Than Last Year Workwear, & Casual Dresses CONFIDE
Slide 18: Q4 and FY 2023 Guidance
18 RENT THE THE RUNWAY RUNWAY CONFIDENTIAL 18 RENT Q4 and FY 2023 Guidance
Slide 19: Q4 and Fiscal Year 2023 Guidance
Q4 and Fiscal Year 2023 Guidance RENT RENT THE THE RUNWAY RUNWAY Q4 2023 Guidance Total Revenue: At least $74M Adjusted EBITDA Margin1: At least 7% Fiscal Year 2023 Guidance Total Revenue: At least $296.4 million (FY2022 Revenue) CONFIDENTIAL Adjusted EBITDA Margin1: 7% - 8% of Total Revenue Purchas
Slide 20: Appendix
20 RENT THE THE RUNWAY RUNWAY CONFIDENTIAL 20 RENT Appendix
Slide 21: Condensed Consolidated Statements of Operations
Condensed Three Three Nine Nine Months Months Months Months Year RENT THE RUNWAY RENT THE RUNWAY Ended Ended Ended Ended Ended Consolidated 10/31/23 10/31/22 10/31/23 10/31/22 1/31/23 (In millions, except per share amounts) Total revenue, net $72.5 $77.4 $222.4 $221.0 $296.4 Statements of Fulfillment
Slide 22: Condensed Consolidated Balance Sheets
Condensed RENT RENT THE Consolidated THE RUNWAY RUNWAY Balance Sheets As Of 10/31/23 As Of 1/31/23 (in millions) Cash and cash equivalents $105.9 $154.5 Restricted cash, current 4.8 3.1 Prepaid expenses and other current assets 10.6 14.5 Restricted cash, fixed 5.2 6.0 Rental product, net 103.9 78.7 F
Slide 23: Condensed Consolidated Statements of Cash Flows
Condensed RENT THE RUNWAY Consolidated Statements of Cash Flows Nine Nine Months Months Ended Ended Year Ended 10/31/23 10/31/22 1/31/23 (in millions) CONFIDENTIAL Net loss $(88.4) $(112.5) $(138.7) Net cash (used in) provided by operating activities (7.7) (39.4) (47.7) Net cash (used in) provided b
Slide 24: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT THE RUNWAY of Net Loss to Free Cash Flow Nine Months Nine Months Ended Ended Year Ended Year Ended Year Ended Year Ended 10/31/23 10/31/22 1/31/23 1/31/22 1/31/21 1/31/20 (in millions) Net loss $(88.4) $(112.5) $(138.7) $(211.8) $(171.1) $(153.9) CONFIDENTIAL Operating loss (60.7
Slide 25: Selected Cash Flows Detail and Supplemental Cash Flow Information
Selected Cash RENT RENT THE Flows Detail and THE RUNWAY RUNWAY Supplemental Cash Flow Nine Months Ended 10/31/23 Nine Months Ended 10/31/22 Year Ended 1/31/23 Information (in millions) INVESTING ACTIVITIES Purchases of rental product $(56.3) $(43.6) $(62.1) Proceeds from liquidation of rental produc
Slide 26: Reconciliation of Purchases of Rental Product to Rental Product Acquired
Reconciliation RENT RENT THE of Purchases THE RUNWAY RUNWAY of Rental Product to Nine Nine Rental Months Months Year Ended Ended Ended 10/31/23 10/31/22 1/31/23 Product (in millions) Cost of owned rental product paid for in the period, Acquired Purchases of rental product $(56.3) $(43.6) $(62.1) as
Slide 27: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation RENT RENT THE of Net Loss to THE RUNWAY RUNWAY Adjusted Three Months Three Months Three Months Three Months Nine Months Nine Months Year Year Year Year EBITDA Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended 10/31/23 10/31/22 7/31/23 7/31/22 10/31/23 10/31/22 1/31/23 1/31/2
Slide 28: Reconciliation of Cash Used by Operating Activities to Free Cash Flow
Reconciliation RENT RENT THE of Cash Used THE RUNWAY RUNWAY by Operating Activities to Free Cash Nine Months Nine Months Flow Ended Ended Year Ended Year Ended Year Ended Year Ended 10/31/23 10/31/22 1/31/23 1/31/22 1/31/21 1/31/20 (in millions) CONFIDENTIAL Net cash (used in) provided by operating
Slide 29: Reconciliation of Net Loss to Free Cash Flow
Reconciliation RENT RENT THE of Net Loss to THE RUNWAY Nine Months Ended Nine Months Ended RUNWAY 10/31/23 10/31/22 Free Cash (in millions) Net loss $(88.4) $(112.5) Interest (income) / expense, net $28.3 $28.2 Flow Rental product depreciation Other depreciation and amortization $40.4 $11.0 $41.0 $1
Slide 30: Operating Expense Detail
Operating RENT THE RUNWAY Expense Detail Three Three Months Months Nine Months Nine Months Ended Ended Ended Ended 10/31/23 10/31/22 10/31/23 10/31/22 (in millions) Technology $12.1 $14.1 $38.1 $42.6 Marketing $7.1 $9.7 $24.6 $27.4 General and administrative $24.4 $25.3 $76.8 $84.1 Total operating e