Rent the Runway Reports 7.7% Revenue Growth to $329.8 Million for Fiscal Year Ended January 31, 2026

Rent the Runway, Inc. (RTR) reported total revenue of $329.8 million for the fiscal year ended January 31, 2026, an increase of 7.7% compared to $306.2 million in the previous fiscal year. This growth was primarily driven by a rise in subscription and reserve rental revenue, which reached $286.0 million, and an increase in other revenue, which totaled $43.8 million. The company's active subscriber base grew by 20.1% year-over-year, reaching 143,796, while the average active subscriber count increased by 8.3% to 143,558. Despite the revenue increase, the gross profit decreased to $107.5 million, resulting in a gross margin of 32.6%, compared to $115.9 million and a 37.9% gross margin in the prior year.

The company's financial performance also saw a significant shift in net income, reporting $22.6 million compared to a net loss of $69.9 million in the previous fiscal year. This turnaround was largely due to a $96.3 million gain on debt restructuring. However, adjusted EBITDA decreased to $24.9 million, with a margin of 7.6%, compared to $46.9 million and a 15.3% margin in the prior year. The company's cash position also experienced a change, with cash and cash equivalents decreasing to $50.4 million from $77.4 million.

Operationally, RTR continued to focus on expanding its customer base and enhancing the subscriber experience. The company reported a 39% year-over-year growth in Subscription Net Promoter Score (NPS) and a 67% year-over-year growth in fourth-quarter add-on revenue. RTR also launched a marketplace pilot to offer complementary products to its subscribers. The company's marketing strategy shifted towards community-centric approaches, resulting in a 15% year-over-year increase in total social audience and a threefold increase in customer-generated content.

Looking ahead, RTR plans to continue investing in AI-driven discovery features to improve the customer experience and drive stronger acquisition and retention. The company also aims to scale product enhancements and features that provide subscribers with greater flexibility. Marketing efforts will focus on improving organic social channels and scaling the "word of mouth" strategy. RTR is also exploring new revenue-generating initiatives, such as expanding its advertising and partnerships offerings. However, the company acknowledged material weaknesses in its internal control over financial reporting, which it is actively working to remediate.