The RealReal, the world’s leading online marketplace for authenticated resale luxury goods, announced its financial results for the third quarter (Q3) ending on September 30, 2023. The disclosure led to a substantial surge in its stock value on Tuesday.
At the time of this publication, RealReal Inc stock (REAL) has witnessed a surge.
RealReal Inc
Current Price: $2.08
Change : +0.47
Change (%): (29.36%)
Volume: 13.1M
Source: Tomorrow Events Market Data
In the third quarter of 2023, the company exceeded revenue and Adjusted EBITDA projections, with Gross Merchandise Value (GMV) surpassing the midpoint of the guidance range. However, compared to the third quarter of 2022, GMV and total revenue experienced an 8% and 7% decrease, respectively. During this period, consignment revenue demonstrated a 10% growth, while direct revenue witnessed a 49% decline in comparison to the same period in 2022.
RealReal Q3 2023 Results – Key Financial Highlights:
– GMV: $408 million (8% decrease compared to Q3 2022)
– Total Revenue: $133 million (7% decrease compared to Q3 2022)
– Gross Margin: 70.6% (1053 basis points increase compared to Q3 2022)
– Net Loss: $(22.9) million or (17.2)% of total revenue (compared to $(47.3) million or (33.1)% of total revenue in Q3 2022)
– Adjusted EBITDA: $(7.0) million or (5.2)% of total revenue (compared to $(28.2) million or (19.7)% of total revenue in Q3 2022)
– GAAP basic and diluted net loss per share: $(0.22) (compared to $(0.49) in Q3 2022)
– Non-GAAP basic and diluted net loss attributable to common shareholders per share: $(0.15) (compared to $(0.38) in Q3 2022)
Top-Line Metrics:
– Trailing 12 months (TTM) active buyers: 954,000 (1% increase compared to Q3 2022)
– Orders: 794,000 (17% decrease compared to Q3 2022)
– Average order value (AOV): $513 (11% increase compared to Q3 2022)
The rise in AOV can be attributed to a year-over-year increase in average selling prices (ASPs), driven by a shift towards higher-value items and a reduction in lower-value items. This was partially offset by a year-over-year decrease in units per transaction (UPT).
In response to these results, The RealReal has enlisted the services of Moelis & Company and Wachtell, Lipton, Rosen & Katz to facilitate the refinancing of the convertible notes.
Looking ahead, The RealReal has updated its full-year 2023 guidance and provided projections for fourth quarter 2023 GMV, total revenue, and Adjusted EBITDA, a Non-GAAP financial measure, based on market conditions as of November 7, 2023.
John Koryl, Chief Executive Officer of The RealReal, remarked, “Today we reported our best quarter of Adjusted EBITDA since the company’s IPO in 2019. Our strategic shift to re-focus on the higher-margin portion of the consignment business is delivering significant progress in our results.”
