From Yahoo Finance · · 1m 50s
Record sales, wider losses at The RealReal
The RealReal just posted its best quarter ever on volume, and its worst in years on the GAAP bottom line.
In brief
The RealReal just posted its best quarter ever on volume, and its worst in years on the GAAP bottom line. Most of the widening loss is a non-cash warrant charge, so the real test is whether 20%-plus growth keeps feeding Adjusted EBITDA before a 41x multiple runs out of patience. Originally reported by Yahoo Finance.
Best quarter, biggest loss
On August 6, The RealReal beat its own outlook and raised full-year guidance. Gross merchandise value hit a record $617 million, up 22%. Net loss got worse anyway.
The growth is broad
Revenue rose 17% to $193 million. Consignment grew 15% and the owned-inventory Direct channel grew 26%, so both halves of the business are pulling.
Margins moved too
Gross margin reached 74.4%, up 10 basis points. Adjusted EBITDA margin jumped to 7%, an improvement of nearly 300 basis points from a year earlier.
Shoppers spending more
Active buyers over the trailing year rose 11% to 1,107,000, and average order value climbed 13% to $659. Existing customers are buying pricier items, not just visiting more.
A warrant, not the business
Net loss widened to $27 million from $11 million, and GAAP loss per share hit $0.23. An $18.6 million non-cash warrant fair-value charge drove most of it. Non-GAAP loss per share narrowed to $0.01.
No bridge to GAAP
The company won't reconcile its forward Adjusted EBITDA guidance to GAAP, blaming unpredictable items like payroll tax on stock transactions. Investors get a target with no bottom-line math behind it.
“cannot predict with reasonable certainty”
Wall Street is split
Hedge fund holders rose to 47 from 45, but short interest sits at 15.29% of float and the forward P/E is 40.98. Priced for growth, with a loud bear camp betting against it.
At a glance
Most of the widening loss is a non-cash warrant charge, so the real test is whether 20%-plus growth keeps feeding Adjusted EBITDA before a 41x multiple runs out of patience.
