RENT · Rent the Runway, Inc.

Revenue Growth Driven by Subscriber Expansion and Pricing Action

Revenue for FY2025 totaled $329.8M, an increase of 7.7% compared to $306.2M in FY2024. This growth reflects both higher subscriber acquisitions and improved subscriber retention versus the prior year, supported by increased promotional activity. Critically, the company implemented a subscription price increase in August 2025, which elevated revenue per subscriber beginning in the third quarter and is expected to continue contributing to revenue momentum.

Gross Profit and Margin Resilience Amid Rising Fulfillment Costs

Gross profit rose 8.0% to $241.3M, and gross margin remained stable at 73.2%. This stability occurred despite upward pressure on fulfillment expenses — specifically higher transportation costs due to carrier rate increases, increased warehouse processing costs, and greater order volume stemming from higher average active subscribers. The ability to maintain margin while absorbing these cost increases points to effective pricing discipline and operational scaling.

Operating Income Reflects Strategic Investment Cadence

Operating income declined to -$57.5M, a 21.1% deterioration year-over-year, as the company advanced initiatives to grow subscribers and enhance the customer experience. Management explicitly noted that certain operating costs are expected to increase with order volume and strategic investment — including technology, infrastructure, and leadership — aligning with the observed expansion in fixed and variable overhead. The January 2024 Corporate Restructuring Plan remains foundational to this effort, focusing the cost structure on key growth opportunities and profitability goals.

Net Income Turnaround Signals Structural Progress

Operating Cash Flow Moderation Consistent with Stated Priorities

Net cash provided by operating activities was $3.5M, down from $12.9M in FY2024. This moderation aligns with management’s commentary that operating costs would rise as order volume increased and as the company made targeted investments to support subscriber growth and customer experience — priorities reinforced by the elimination of quarterly and annual spend caps under the Fourteenth Amendment to the debt facility.