The RealReal Reports $62.4 Million Net Income and 11.2% Revenue Growth in Latest Quarter

The RealReal, Inc. reported a significant financial turnaround in its latest quarterly results, with a net income of $62.4 million for the three months ending March 31, 2025, compared to a net loss of $31.1 million during the same period in 2024. This shift was driven by a total revenue increase of 11.2% to $160.0 million, up from $143.8 million year-over-year. The company's consignment revenue rose by 7% to $123.8 million, while direct revenue surged by 61% to $20.5 million, reflecting a strong performance in its luxury goods marketplace.

The company also experienced operational improvements, with gross profit increasing to $120.0 million, resulting in a gross margin of 75%, up from 74.6% in the prior year. The cost of revenue saw a modest increase, but overall operating expenses rose to $132.8 million, primarily due to higher personnel costs and technology investments. Notably, the company recorded a gain of $37.1 million from the extinguishment of debt, which contributed to the positive net income.

In terms of strategic developments, The RealReal has been actively managing its debt structure. The company completed a significant exchange of its 2028 Notes for new 2031 Notes, reducing its principal debt balance by $36.7 million. This move is part of a broader strategy to optimize its capital structure and extend the maturity of its debt obligations. The company also reported a decrease in its warrant liability, which fell to $36.1 million from $78.6 million, reflecting a favorable change in fair value.

Operationally, The RealReal reported a total of 985,922 active buyers, with an average order value (AOV) of $564, up from $538 in the previous year. The company’s gross merchandise value (GMV) reached $490.4 million, indicating a healthy demand for its luxury goods. The total number of orders processed was 869,840, showcasing the platform's growing engagement. The company continues to focus on enhancing its technology and operational efficiencies to support future growth, including potential geographic expansion and the introduction of new product categories.

Looking ahead, The RealReal remains cautiously optimistic about its growth trajectory, emphasizing the importance of attracting new consignors and buyers while managing operational costs. The company acknowledges the potential challenges posed by macroeconomic conditions and competition in the luxury resale market but is committed to leveraging its technology and brand partnerships to drive future success.