Latest news with #RatiLevesque
Yahoo
10-05-2025
- Business
- Yahoo
REAL Q1 Earnings Call: Supply Initiatives and Direct Channel Drive Margin Improvement
Secondhand luxury marketplace The RealReal (NASDAQ: REAL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 11.3% year on year to $160 million. The company expects next quarter's revenue to be around $159 million, close to analysts' estimates. Its non-GAAP loss of $0.08 per share was in line with analysts' consensus estimates. Is now the time to buy REAL? Find out in our full research report (it's free). Revenue: $160 million vs analyst estimates of $159.8 million (11.3% year-on-year growth, in line) Adjusted EPS: -$0.08 vs analyst estimates of -$0.08 (in line) Adjusted EBITDA: $4.11 million vs analyst estimates of $3.98 million (2.6% margin, relatively in line) The company reconfirmed its revenue guidance for the full year of $652.5 million at the midpoint EBITDA guidance for the full year is $25 million at the midpoint, below analyst estimates of $29.7 million Operating Margin: -8%, up from -12.5% in the same quarter last year Free Cash Flow was -$32.98 million, down from $22.91 million in the previous quarter Active Buyers : 985,000, up 601,000 year on year Market Capitalization: $824.5 million The RealReal's first quarter results were driven by new supply initiatives and operational improvements, as management focused on building a more profitable business model. CEO Rati Levesque highlighted the company's 'growth playbook'—a combination of sales, marketing, and retail strategies—to acquire new consignors and unlock high-value inventory. Notably, the introduction of AI-driven programs such as Athena and new service offerings like Get Paid Now contributed to increased operational efficiency and enhanced gross margin performance. Looking ahead, management reconfirmed full-year revenue guidance and emphasized the resilience of its business model against macroeconomic uncertainty and tariffs. CFO Ajay Gopal noted that the company's supply is sourced domestically, insulating it from tariff impacts, and suggested that higher primary market prices may even drive more buyers and sellers to the platform. Levesque stated, 'We believe the RealReal has a stronger, more profitable, and more sustainable business model today than ever before,' but also acknowledged the need for continued execution on its core strategic pillars. Management's remarks on the call centered on supply growth, operational efficiency, and new business initiatives. They outlined several key drivers behind the quarter's margin improvements and the company's approach to future opportunities and risks. AI-enabled process improvements: The Athena AI intake process reduced product processing times by about 20%, supporting faster inventory turnover and improved fulfillment center efficiency. Get Paid Now expansion: The Get Paid Now program, which allows select consignors to receive upfront payments for high-value items, continued to scale. Management said this channel is now 'significantly more profitable' and expected to maintain gross margins near 20%. Retail and referral channel impact: A quarter of new consignors came through retail stores, while enhanced referral partnerships with stylists and closet organizers now drive over $1 million in incremental supply monthly. Diversification of supply channels: The drop ship initiative, initially piloted in watches and expanded to handbags, is intended to broaden access to high-value supply from business-to-business partners, with early traction reported in both categories. Technology-driven pricing: RealReal's proprietary pricing algorithms, which integrate near real-time data from buyer engagement and primary market trends, are increasingly automating pricing and discounting decisions to optimize sell-through and margins. Management's outlook for the next quarter and full year stresses the importance of consistent supply growth, operational cost discipline, and the ability to adapt to consumer and macroeconomic shifts. Supply-side resilience: The company's primarily domestic supply base is insulated from tariffs and international disruption, and management expects continued growth in new consignors from both retail and referral channels. Profitability through technology: Ongoing investments in automation and AI, such as Athena and SmartSales, are expected to drive further improvements in operating expenses and gross margin. Macro environment uncertainty: Management acknowledged that unpredictable consumer demand and discretionary spending could be a headwind, though they believe the resale model's value proposition may attract more buyers and sellers in a high-price environment. Ashley Owens (KeyBanc Capital Markets): Asked about the sustainability of direct channel gross margins; CFO Ajay Gopal explained margins should remain near 20% with little seasonal variation as the business mix stabilizes. Ike Boruchow (Wells Fargo): Inquired if the direct channel's profitability could pressure overall gross margin; management said the impact would be limited due to the channel's relatively small revenue share. Marvin Fong (BTIG): Sought more detail on drivers of average order value (AOV); CEO Rati Levesque cited higher fine jewelry and handbag sales as supporting AOV growth. Bobby Brooks (Northland Capital Markets): Requested specifics on new consignor growth; Levesque attributed gains to retail expansion, referral programs, and technology-enabling targeted outreach and ease of use. Mark Altschwager (Baird): Asked if current buyer and seller trends signal structural shifts; management indicated domestic supply and pricing algorithms provide flexibility, with potential to benefit from shifts in the broader luxury market. In tracking The RealReal's progress, the StockStory team will focus on (1) the scalability and profitability of new supply channels such as Get Paid Now and drop ship, (2) operational efficiency gains from greater AI adoption in fulfillment and pricing, and (3) continued growth in new consignors, particularly from retail and referral sources. We will also monitor any signs of changing consumer behavior or margin pressures stemming from shifts in discretionary spending. The RealReal currently trades at a forward EV/EBITDA ratio of 29.2×. Should you double down or take your chips? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
RealReal CEO Salary: Rati Levesque's Pay Rises to $11.5M
Rati Levesque was welcomed into the corner office at RealReal Inc. with stock awards valued at $10 million, which made up the bulk of her pay last year. Levesque, the resale platform's first employee, was president and chief operating officer until October, when she took over the role of chief executive officer after the departure of John Koryl. More from WWD How CEO Rati Levesque Is Rebuilding at The RealReal The RealReal Hits Financial Milestone With Adjusted EBITDA for 2024 Resale and Rental Show Signs of Life Headed Into 2025 Her compensation last year also included a salary of $540,385, bonus and incentive pay totalling $947,167. CEOs of public companies often see the bulk of their compensation coming from stock awards, which link the executive's own pocketbook with the fortunes of investors. Levesque has had a taste of the top job before, serving as co-interim CEO after founder Julie Wainwright abruptly left the business in 2022. But she took the job for real just as the company hit a financial milestone, logging adjusted earnings before interest, taxes, depreciation and amortization of $9 million last year. That touch of profitability came after the company increased the amount it charges for each sale, cut out items valued for less than $100, moved to a consignment model and eliminated unprofitable categories. 'We just went back to our core of fashion buying jewelry, watches, handbags, ready-to-wear, shoes,' Levesque told WWD in February. 'The P&L is different. The flow-through from revenue to adjusted EBITDA now is much healthier. Now we got back to growth.' The trick now is going to be to keep up that growth. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange
Yahoo
10-05-2025
- Business
- Yahoo
The RealReal's Sales and Profits Rise in Q1, but Investors Want More
The RealReal Inc. showed some forward momentum in the first quarter — and stuck by its financial guidance for the year — but Wall Street wanted something more. Shares of the luxury resale pioneer slipped 10.8 percent to $6.50 in after-hours trading on Thursday as investors took in the company's latest results. More from WWD RealReal CEO Salary: Rati Levesque's Pay Rises to $11.5M How CEO Rati Levesque Is Rebuilding at The RealReal The RealReal Hits Financial Milestone With Adjusted EBITDA for 2024 Revenues rose 11 percent to $160 million for the quarter, while gross merchandise volume hit $490 million. Net income was $62 million, up from losses of $31 million a year earlier, reflecting a big change in the fair value of the company's warrant liability. Adjusted earnings before interest, taxes, depreciation and amortization totaled $4.1 million for the quarter. The company also saw its active buyer count rise 7 percent to 985,000. Rati Levesque, chief executive officer of The RealReal, said the quarter was strong and that resale was well positioned to weather the trade war. 'We are reaffirming our full year 2025 guidance despite the uncertainties from tariffs and a less predictable backdrop,' Levesque said. 'We occupy a unique position at the intersection of luxury and value, and we source our supply primarily from domestic closets, so there is potential to realize benefits in the current environment. Our strategy is working; we believe our brand is strong and we have built flexibility into our operations that enables us to effectively navigate a range of conditions.' The company continues to expect revenues of $645 million to $660 million this year, with adjusted EBITDA of $20 million to $30 million. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange
Yahoo
08-05-2025
- Business
- Yahoo
The RealReal (NASDAQ:REAL) Reports Q1 In Line With Expectations But Stock Drops 10.5%
Secondhand luxury marketplace The RealReal (NASDAQ: REAL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 11.3% year on year to $160 million. On the other hand, next quarter's revenue guidance of $159 million was less impressive, coming in 0.8% below analysts' estimates. Its non-GAAP loss of $0.08 per share was in line with analysts' consensus estimates. Is now the time to buy The RealReal? Find out in our full research report. Revenue: $160 million vs analyst estimates of $159.8 million (11.3% year-on-year growth, in line) Adjusted EPS: -$0.08 vs analyst estimates of -$0.08 (in line) Adjusted EBITDA: $4.11 million vs analyst estimates of $3.98 million (2.6% margin, relatively in line) The company reconfirmed its revenue guidance for the full year of $652.5 million at the midpoint EBITDA guidance for the full year is $25 million at the midpoint, below analyst estimates of $29.7 million Operating Margin: -8%, up from -12.5% in the same quarter last year Free Cash Flow was -$35.85 million, down from $22.91 million in the previous quarter Active Buyers : 985,000, up 601,000 year on year Market Capitalization: $797.3 million "We are pleased to report strong first quarter results and our focus remains steadfast,' said Rati Levesque, Chief Executive Officer of The RealReal. Founded by consignment store aficionado Julie Wainwright, The RealReal (NASDAQ: REAL) is an online marketplace for buying and selling secondhand luxury goods. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, The RealReal's 6.2% annualized revenue growth over the last three years was tepid. This was below our standard for the consumer internet sector and is a rough starting point for our analysis. This quarter, The RealReal's year-on-year revenue growth was 11.3%, and its $160 million of revenue was in line with Wall Street's estimates. Company management is currently guiding for a 9.7% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 8.5% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. As an online marketplace, The RealReal generates revenue growth by increasing both the number of users on its platform and the average order size in dollars. Over the last two years, The RealReal's active buyers , a key performance metric for the company, increased by 18.5% annually to 985,000 in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. In Q1, The RealReal added 601,000 active buyers , leading to 157% year-on-year growth. The quarterly print was higher than its two-year result, suggesting its new initiatives are accelerating user growth. Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns in transaction fees from each user. ARPU also gives us unique insights into a user's average order size and The RealReal's take rate, or "cut", on each order. The RealReal's ARPU fell over the last two years, averaging 5.5% annual declines. This isn't great, but the increase in active buyers is more relevant for assessing long-term business potential. We'll monitor the situation closely; if The RealReal tries boosting ARPU by taking a more aggressive approach to monetization, it's unclear whether users can continue growing at the current pace. This quarter, The RealReal's ARPU clocked in at $162.47. It declined 56.6% year on year, worse than the change in its active buyers . We were very impressed by The RealReal's number of users this quarter. We were also happy its EBITDA outperformed Wall Street's estimates. On the other hand, its full-year EBITDA guidance missed significantly and its EBITDA guidance for next quarter fell short of Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 10.5% to $6.53 immediately after reporting. The RealReal's earnings report left more to be desired. Let's look forward to see if this quarter has created an opportunity to buy the stock. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
