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Rent the Runway welcomes 10.6 percent revenue increase for Q1 2023

By Rachel Douglass



Image: Rent the Runway

Rent the Runway (RTR) has outlined its financial results for the first quarter ended April 30, 2023, where it viewed improvements all round.

The rental platform reported a 10.6 percent increase YoY in its revenue, up from 67.1 million dollars in the same period last year to 74.2 million dollars.

Its active subscribers count also rose 7.6 percent hitting 145,200, while its average active subscriber number was up 8.7 percent to 135,966. Its ending total subscribers were 185,720, up 4.8 percent.

RTR reported a gross profit of 31.4 million dollars, representing an increase of 39.6 percent from 22.5 million dollars, while its gross margin was 42.5 percent compared to its previous 33.5 percent.

The company’s net loss was 30.1 million dollars as compared to its prior 42.5 million dollars, with its adjusted EBITDA coming in at 4.5 million dollars, down from 8.8 million dollars in the previous year.

Operational adjustments drive results

Much of its improvements came as part of shifts in its operations, with its recently launched text-based concierge service designed to onboard new subscribers and its improved product discovery features leading to a 34 percent increase in engagement with substitute items.

RTR also said it has made foundational investments in artificial intelligence (AI) in order to leverage such models as part of its search and discovery experience. The feature, which is expected to launch in the coming weeks, will allow customers to leverage the platform’s existing search tools using common phrases to make product discovery more “intuitive”.

In a release, Jennifer Hyman, CEO and co-founder of RTR, said she was proud of the “momentum” seen across the business.

Hyman added: “Given our financial transformation over the past several years, we believe we are in a strong position to invest the majority of resources into our strategy of improving the customer experience.

“RTR has always been great at three things: agility, innovation and continuous improvement, and we’ve leveraged these guiding principles to make great progress on our strategy in Q1.

“We look forward to delivering for our customers in the quarters to come while working towards our subscriber growth and profitability goals.”

For Q2 of 2023, the company said it is expecting revenue in the range of 77 to 79 million dollars, while its adjusted EBITDA margin is forecast to sit between 7 to 8 percent.

For FY23, RTR is continuing to expect revenue in the range of 320 to 330 million dollars, with an ending active subscriber growth of more than 25 percent.

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