RENT · Rent the Runway, Inc.

Rent the Runway delivered a strong Q4 FY2025 finish with record revenue of $91.7 million, up 20% year-over-year, driven by a 20.1% increase in ending active subscribers to 143,796, fueled by the largest-ever inventory investment enhancing subscriber loyalty. Gross profit rose 22.9% to $35.4 million with margin expansion to 38.6%, while Adjusted EBITDA held at $18.3 million despite a slight margin contraction to 20.0%. Net loss narrowed significantly to $1.4 million from $13.4 million prior year. For full FY2025, revenue grew 7.7% to $329.8 million, swinging to net income of $22.6 million primarily from a $96.3 million gain on debt restructuring, though gross margin compressed to 32.6% amid heavy inventory spending. Cash from operations fell to $3.5 million, with investing cash outflow at $49.5 million reflecting inventory builds, ending with $50.4 million in cash. Management highlights include 39% YoY Subscription NPS growth, 67% Q4 add-on revenue surge, and new initiatives like RTR Marketplace pilot and AI-driven search improvements boosting conversion 10%. CEO Jennifer Hyman emphasized the inventory strategy's success and strengthened balance sheet positioning for FY2026 growth via AI discovery and diversified revenue. Guidance signals double-digit revenue growth for FY2026 with Adjusted EBITDA margin of 4-7%, and Q1 revenue $85-87 million with negative margin -5% to -7%, underscoring continued investment focus.