~~We cannot predict the effect our dual class structure may have on the trading price~~Table of ~~our Class A common stock~~.Contents

We cannot predict whether our dual class structure will result in a lower or more volatile trading price of our Class A common stock, in adverse publicity, or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell announced that it plans to require new constituents of its indices to have greater than 5% of the company’s voting rights in the hands of public stockholders, and S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of its indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500. Also in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under such announced policies, the dual class structure of our common stock would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track those indices would not invest in our Class A common stock. These policies are relatively new and it is unclear what effect, if any, they will have on the valuations of publicly-traded companies excluded from such indices, but it is possible that they may depress valuations, as compared to similar companies that are included. Because of the dual class structure of our common stock, we will likely be excluded from certain indices, and we cannot provide assurance that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and would make our Class A common stock less attractive to other investors. As a result, the trading price of our Class A common stock could be adversely affected.

Our business and financial performance may differ from any projections that we disclose or any information that may be attributed to us by third parties.

From time to time, we may provide guidance regarding our projected business and/or financial performance. However, any such projections involve risks, assumptions, and uncertainties, and our actual results could differ materially from such projections. Factors that could cause or contribute to such differences include, but are not limited to, those identified in ~~these Risk Factors,~~the risk factors described in this Annual Report, some or all of which are not predictable or within our control. Other unknown or unpredictable factors also could adversely impact our performance, and we undertake no obligation to update or revise any projections, whether as a result of new information, future events, or otherwise. In addition, various news sources, bloggers, and other publishers often make statements regarding our historical or projected business or financial performance, and you should not rely on any such information even if it is attributed directly or indirectly to us.

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~~Our trading price and trading volume could decline if securities or industry analysts do not publish research about our business, or if they publish unfavorable research~~.

The trading market for our common stock depends in part on the research and reports that analysts publish about our business. We do not have any control over the content and opinions included in their reports. The trading price of our Class A common stock could decline if one or more equity research analysts downgrade our stock or publish other unfavorable commentary or research. If one or more equity research analysts cease coverage of our company, or fail to regularly publish reports on us, the demand for our Class A common stock could decrease, which in turn could cause our trading price or trading volume to decline.

Future sales of our common stock in the public market could cause our share price to fall.

The sale of substantial amounts of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

In the future, we may sell additional Class A common stock, other series of common stock, convertible securities, or other equity securities, including preferred securities, in one or more transactions at prices and in a manner we determine from time to time. We also expect to issue Class A common stock to employees, consultants, and directors pursuant to our equity incentive plans. If we sell Class A common stock, other series of common stock, convertible securities, or other equity securities in subsequent transactions, or Class A common stock or Class B common stock is issued pursuant to equity incentive plans, investors may be materially diluted. New investors in subsequent transactions could gain rights, preferences, and privileges senior to those of holders of our Class A common stock.

In addition, we may issue our capital stock or securities convertible into our capital stock from time to time in connection with a financing, acquisition, investments, or otherwise. Additional issuances of our stock will result in dilution to existing holders of our stock. Also, to the extent outstanding stock options to purchase our stock are exercised or restricted stock units (“RSUs”) settle, there will be further dilution. The amount of dilution could be substantial depending upon the size of the issuance or exercise. Any such issuances could result in substantial dilution to our existing stockholders and cause the trading price of our Class A common stock to decline.

Upon the expiration of our lock-up agreement and as restrictions on resale end, the market price of our shares of Class A common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Class A common stock or other securities.

We, our executive officers, directors and the holders of substantially all of our outstanding stock prior to our IPO signed lock-up agreements with the underwriters that, subject to certain customary exceptions, restrict the sale of the shares of our common stock and certain other securities held by them for 180 days following the date of the final prospectus filed in connection with our initial public offering. Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Barclays Capital Inc. may, in their sole discretion and at any time without notice, release all or any portion of the shares or securities subject to any such lock-up agreements.

We do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our Class A common stock will likely depend on whether the price of our Class A common stock increases.

We have never declared or paid any cash dividends on our Class A common stock, and we do not intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business and for general corporate purposes. Any future determination to pay dividends on our capital stock will be at the discretion of our board of directors. Furthermore, our ability to pay dividends may also be restricted by the terms of our Amended Temasek Facility or any future debt or preferred equity securities of us or our subsidiaries. Accordingly, investors may need to sell theirIf shares of our Class A common stock become subject to ~~realize~~the penny stock rules, it would become more difficult to trade them.

The SEC has adopted regulations which generally define a ~~return~~“penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions, including an exemption for any securities listed on ~~their investment,~~a national securities exchange. The rules impose additional sales practice requirements on broker-dealers for transactions involving “penny stock”, with some exceptions. If shares of our Class A common stock were delisted from the Nasdaq Capital Market and determined to be “penny stock”, broker-dealers may find it more difficult to trade such securities and investors may ~~not be able~~find it more difficult to ~~sell their shares at~~acquire or ~~above~~dispose of such securities on the ~~price they paid for them.~~secondary market.

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Certain provisions in our corporate charter documents and under Delaware law may prevent or hinder attempts by our stockholders to change our management or to acquire a controlling interest in us, and the trading price of our Class A common stock may be lower as a result.

There are provisions in our Amended Charter and Amended and Restated Bylaws (“Amended Bylaws”) that may make it difficult for a third party to acquire, or attempt to acquire, control of our company, even if a change in control were considered favorable by our stockholders. These anti-takeover provisions include:

•authorization of the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

•~~provide for~~ a dual class common stock structure in which holders of our Class B common stock, which has 20 votes per share, have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class B and Class A common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;

•a classified board of directors so that not all members of our board of directors are elected at one time;

•a requirement that our directors may only be removed for cause;

•the ability of our directors to fill all board vacancies, subject to the rights granted pursuant to the stockholders’ agreement;

•a prohibition on stockholder actions by written consent, thereby requiring that all stockholder actions be taken at a meeting of our stockholders;

•advance notice procedures for stockholder director nominees and annual meeting matters (other than the parties to our stockholders; agreement for nominations made pursuant to the terms of the stockholders’ agreement);

•an inability of our stockholders to call special meetings of stockholders;

•the ability of our directors to amend our Amended Bylaws without stockholder consent;

•the requirement of a super-majority to amend some provisions in our Amended Charter and Amended Bylaws; and

•a prohibition on cumulative voting for directors.

Although we have opted out of Section 203 of the General Corporation Law of the State of Delaware, ~~(the “DGCL”),~~ our Amended Charter contains provisions that are similar to Section 203. Specifically, our Amended Charter provides that, subject to certain exceptions, we will not be able to engage in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless certain requirements are met. A “business combination” includes, among other things, a merger or consolidation involving us and the “interested stockholder” or the sale of more than 10% of our assets or to an interested stockholder. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our outstanding voting stock and any affiliates or associates of such entity or person.

Any provision in our Amended Charter, Amended Bylaws, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.

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Our Amended Charter designates the Court of Chancery of the State of Delaware and the federal district courts of the United States of America as the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our Amended Charter provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising under the Delaware General Corporation Law, our Amended Charter, or our Amended Bylaws (as either may be amended or restated), and any action asserting a claim against us that is governed by the internal affairs doctrine or as to which the Delaware General Corporation Law confers exclusive jurisdiction on the Court of Chancery of the State of Delaware. This provision would not apply to suits brought to enforce a duty or liability created by the ~~Securities Exchange Act of 1934, as amended, or~~ Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our Amended Charter further provides that the federal district courts of the United States of America are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our Amended Charter. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find either exclusive-forum provision in our Amended Charter to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.

Our Amended Charter provides that the doctrine of “corporate opportunity” does not apply with respect to any directors (or their affiliates) who are not our employees.

Our Amended Charter provides that the doctrine of “corporate opportunity” does not apply with respect to any director (or their respective affiliates) who is not employed by us or our subsidiaries. The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources or information obtained in their corporate capacity for their personal advantage, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity. The doctrine of corporate opportunity is intended to preclude officers, directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation. Pursuant to our Amended Charter, to the extent permitted by Delaware law, we renounce any present or expectancy interest that we have in, or right to be offered an opportunity to participate in, specified business opportunities that are from time to time presented to our directors, or their respective affiliates (other than those who are employed by us or our subsidiaries). Any directors, or their respective affiliates, other than those directors, or affiliates who are employed by us or our subsidiaries, have no duty to communicate or present corporate opportunities to us, and have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign or otherwise transfer such corporate opportunity to persons other than us, including to any directors, or their respective affiliates (other than those who are employed by us or our subsidiaries). Notwithstanding the foregoing, pursuant to our Amended Charter, we do not renounce our present or expectancy interest in any business opportunity that is expressly offered to a director, executive officer or employee of us or our subsidiaries, solely in his/her capacity as a director, executive officer or employee.

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Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Cybersecurity Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.

We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is managed separately from our other risk management programs.

Key elements of our cybersecurity risk management program include but are not limited to the following:

•risk assessments designed to help identify material cybersecurity risks to our critical systems and information;

•a security team principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents;

•the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls;

•cybersecurity awareness training of our employees, incident response personnel, and senior management;

•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and

•a risk management process for certain third-party service providers, suppliers, and vendors based on, among other things, their criticality to our operations, access to RTR data, cybersecurity risk profile, and business requirements.

We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the headings: “Any significant technology disruption or failure, cyberattack or data security incident could adversely affect our business, financial condition and operations.” and “Our business relies on third-party cloud infrastructures, and any disruption of, or interference with, our use of cloud infrastructures could adversely affect our business, financial condition or results of operations.” included as part of our risk factor disclosures in Part I, Item 1A of this Annual Report on Form 10-K.

Cybersecurity Governance

Our full Board considers cybersecurity risk as part of its risk oversight function and oversees management’s implementation of our cybersecurity risk management program. The Board receives quarterly reports from management on cybersecurity risks. In addition, management is responsible for updating the Board, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant.

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Our SVP, Engineering and our VP, Technology & CISO are the members of our management team who are primarily responsible for assessing and managing our material risks from cybersecurity threats. Their team has primary responsibility for our overall cybersecurity risk management program and they supervise our internal cybersecurity personnel and our external cybersecurity consultants. Our management team has deep expertise in e-commerce and consumer retail. In addition, our VP, Technology & CISOs experience includes developing secure products as well as head of security and CISO positions at both public and private companies.

Under the supervision of our SVP, Engineering and our VP, IT, Infra & Security, the security team takes steps to stay informed about and monitor efforts to prevent, detect and respond to, as well as recovery efforts with respect to cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.

Item 2. Properties

Our corporate headquarters is located in Brooklyn, New York, which consists of approximately 47,000 square feet of space under a lease that expires in November 2032. We also lease ~~a corporate space and photo studio in New York, New York and lease~~ and operate two fulfillment centers in Secaucus, New Jersey and Arlington, Texas ~~totaling approximately 540,000 square feet,~~ under leases that expire in August ~~2024~~2029 and May 2030, respectively. We also lease ~~a corporate space~~commercial spaces in New York City and Galway, Ireland.

We believe our facilities are suitable for our current needs. We intend to expand our facilities or add new facilities as we grow and believe that suitable additional or alternative space will be available as needed to accommodate such growth.

Item 3. Legal Proceedings

The information contained in “Note 1516 — Commitments and Contingencies” in the Notes to the Consolidated Financial Statements is incorporated by reference into this Item.

Item 4. Mine Safety Disclosures

Not applicable.

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Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our Class A common stock ~~has been~~is listed on the Nasdaq ~~Global Select~~Capital Market under the symbol ~~“RENT” and began trading on October 27, 2021. Prior to that date, there was no public trading market for our common stock.~~“RENT.”

Holders of Record

As of April ~~11, 2022,~~5, 2024, there were approximately ~~291~~159 stockholders of record of our Class A common stock and seven stockholders of record of our Class B common stock. The number of stockholders of record is based upon the actual number of holders registered on this date and does not include holders of common stock in “street name” by brokers or other entities on behalf of stockholders.

Dividend Policy

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all future earnings and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors, subject to compliance with applicable law and contractual restrictions in the agreements governing our current and future indebtedness, and will depend on a number of then-existing factors, including our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our board of directors may deem relevant.

Recent Sales of Unregistered Securities

None.

Use of Proceeds from our IPO

The offer and sale of the shares in the IPO was registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-260027), which was declared effective by the SEC on October 26, 2021.

There has been no material change in the expected use of the net proceeds from our IPO, as described in our final prospectus filed with the SEC on October 27, 2021 pursuant to Rule 424(b) under the Securities Act of 1933. As of the date of this filing, all net proceeds have been applied.

Issuer Purchases of Equity Securities

None.

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Performance Graph

The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

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The following graph shows a comparison from October 27, 2021 (the date our common stock commenced trading on Nasdaq), through January 31, ~~2022,~~2024, of the cumulative total returns for our common stock, the Nasdaq Composite Index and the S&P Retail Select Index. The graph assumes $100 was invested at the market close on October 27, 2021 in our Class A common stock, the Nasdaq Composite Index, and the S&P Retail Select Index, respectively. Such returns are based on historical results and are not intended to suggest future performance. The Nasdaq Composite Index and S&P Retail Select Index assume reinvestment of any dividends. The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. The following discussion focuses on fiscal years ~~2021~~2023 and ~~2020~~2022 financial condition and results of operations and year-to-year comparisons between fiscal years ~~2021~~2023 and ~~2020. Similar discussion~~2022. Discussion of ~~our~~ fiscal year ~~2019~~2021 financial condition and results of operations and year-to-year comparisons between fiscal years ~~2020~~2022 and ~~2019 can be found~~2021 are included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~final prospectus (File No. 333-260027) (the “Prospectus”) dated October 27, 2021 pursuant to Rule 424(b)(4) under~~Annual Report on Form 10-K for the ~~Securities Act of 1933, as amended (the “Securities Act”), for our initial public offering (the “IPO”).~~fiscal year ended January 31, 2023.

In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those described in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors”.

Overview

We give customers ongoing access to our “unlimited closet” — with ~~over 19,000~~thousands of styles by ~~over 780~~hundreds of designer brands — through our Subscription offering or the ability to rent a-la-carte through our Reserve offering. We also give our subscribers and customers the ability to buy our products through our Resale ~~offering.~~offering, which offers customers pre-loved styles from our closet at a discount to retail price, up to 90% off of designer retail value. These offerings allow us to engage and serve our subscribers and customers across diverse use cases from everyday life to special occasions. We have served ~~over 2.5~~approximately 3 million lifetime customers across all of our offerings and we had ~~159,544~~173,247 ending total subscribers65 (active and paused) as of January 31, ~~2022.~~2024. We had 125,954 active subscribers as of January 31, 2024. The majority of our revenue is highly recurring and is generated by our subscribers. For the years ended January 31, ~~2022~~2024 and ~~2021,~~2023, respectively, ~~84%~~88% and ~~89%~~86% of our total revenue (including Reserve and Resale revenue) was generated by subscribers while they were active or paused.

The variety, breadth and quantity of products we carry is important to our business, and we strategically manage the capital efficient acquisition of a high volume of items every year. We have successfully disproved the myth that fashion apparel items and accessories only last one season as we are able to rent or “turn” our products multiple times over many years. We price our items at a fraction of their retail or comparable value, creating an attractive price and value proposition for our subscribers and customers.

We source virtually all of our products, which includes apparel ~~accessories~~ and ~~home goods,~~accessories, directly from, or in partnership with, designer brands. Prior to 2018, we purchased nearly all of our products from our brand partners typically at a discount to wholesale cost, which we refer to as “Wholesale” items. In late 2018, we began to procure products through Share by RTR and Exclusive Designs. See “—Our Product Acquisition Strategy” below for a description of the three ways in which we procure products.

6On October 29, 2021, we closed our initial public offering (“IPO”), in which we issued and sold 850,000 shares at the public offering price of $420.00 per share. We received net proceeds of $327.3 million after deducting underwriting discounts and commissions and offering expenses.

5 Ending total subscribers represents the number of subscribers with an active or paused membership as of the last day of the period and excludes subscribers who had an active or paused subscription during the period, but ended their subscription prior to the last day of the fiscal period.

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Recent Developments

~~Recent Business Developments~~Debt Restructuring

~~Initial Public Offering.~~ ~~On October 29, 2021, we closed our IPO, in which we issued and sold 17,000,000 shares at the public offering price of $21.00 per share. We received net proceeds of $327.3 million~~ ~~after deducting underwriting discounts and commissions and offering expenses.~~

~~Debt Paydown and Amendment.~~ ~~Concurrent with~~On December 1, 2023, we entered into an amendment to our ~~IPO, we paid down our senior secured term loan with Ares Corporate Opportunities Fund V, L.P. (the “Ares Facility”) of $80.7 million in full and $60.0 million of our subordinated, junior lien~~ term loan with Double Helix Pte Ltd. as administrative agent for Temasek Holdings ~~(the “Temasek~~(as amended by the 2023 Amendment, the “2023 Amended Temasek Facility”)~~, resulting in a total debt repayment of $140.7 million. We also refinanced the remaining~~. The 2023 Amended Temasek Facility, among other things, (i) eliminates all interest (both payment-in-kind and cash interest) for a period of six full fiscal quarters beginning with the fourth quarter of fiscal year 2023; (ii) reduces the minimum liquidity maintenance covenant under the 2023 Amended Temasek Facility from $50 million to $30 million; and (iii) provides that we may not exceed mutually agreed upon quarterly and annual spend levels for rental product capital expenditures, fixed operating expenditures and marketing expenditures during fiscal year 2024 of $51 million, $100 million (excluding $10 million of specified permitted expenditures), and $30 million, respectively, and to-be-agreed levels for fiscal years 2025 and 2026, subject to the debt holder’s consent and certain exceptions. The maximum expenditure amounts are consistent with our anticipated spend for fiscal year 2024 and reflect lower amounts relative to fiscal year 2023 for rental product capital expenditures and fixed operating expenditures and roughly flat amounts for marketing expenditures.

Corporate Restructuring Plan

On January 9, 2024, we announced a restructuring plan to focus our workforce and cost structure on key growth opportunities and support our profitability goals. The plan primarily included total workforce reductions of approximately 10% of corporate employees (primarily a reduction in force, with some open role closures/reduced backfills).

Restructuring charges of $2.0 million for severance and related costs were recognized during the year ended January 31, 2024 and are reflected in Restructuring charges on our Consolidated Statements of Operations. We recorded asset impairment charges of $1.1 million during the year ended January 31, 2024 related to the discontinuation of a software implementation project in connection with the January 2024 restructuring plan. The charge is reflected in Loss on asset impairment related to restructuring on our Consolidated Statements of Operations. We may incur additional restructuring charges in the future.

The January 2024 restructuring plan is expected to generate total annual operating expense savings of approximately $12 million, which primarily includes the reduction in force, with some open role closures/reduced backfills, and excludes potential hiring of new employees or other additions to the Company’s costs and expenses. The restructuring plan was substantially completed by the end of the fourth quarter of fiscal year 2023 and is expected to be fully completed by the end of the second quarter of fiscal year 2024.

See Note 4, “Restructuring and Related Charges” in the Notes to the Consolidated Financial Statements for more details on these charges.

Reverse Stock Split

In March 2024, our stockholders approved, and our Board of Directors selected a 1-for-20 reverse stock split of our outstanding shares of Class A common stock and Class B common stock (the ~~“Amended Temasek Facility”~~“Reverse Stock Split”). The Reverse Stock Split became effective on April 2, 2024 and began trading on a post-split basis on April 3, 2024. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the Reverse Stock Split. Shares of Class A common stock and Class B common stock underlying outstanding warrants, stock options, and restricted stock units were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately adjusted.

Additional Key Fiscal Fourth Quarter, Fiscal Year 2023 and Recent Business Highlights:

•Increased rental product in-stock rates through our depth strategy, which significantly improved the customer experience, led to a 20 point increase in Subscription Net Promoter scores from the second quarter of fiscal year 2023 to the fourth quarter of fiscal year 2023 and increased customer loyalty by 10% in the fourth quarter of fiscal year 2023 compared to the fourth quarter of fiscal year 2022.

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•Transformed prospect experience with merchandising-heavy, use-case based hubs, showing the customer how we are a solution for her needs for work, events, travel and every day. New prospect experience has already driven increases in conversion.

•Achieved significant growth in our 'Try Before You Buy' resale business with record quarterly and annual resale revenue. We believe that our model is a competitive advantage for us as we are able to offer exceptional pricing to customers on rental product they already have at home and already love, in order to increase customer loyalty, fund rental product newness and generate strong margins.

•Grew Concierge Program to nearly 40% of early-term customers offering 1:1 styling advice to customers alongside help with their orders. The Concierge Program has driven higher loyalty and we believe is ready for continued scale.

•Hired Natalie McGrath as Chief Marketing Officer to re-engage our customer growth flywheel. Natalie joined us on March 4, 2024 from Afterpay where she led Marketing for North America and Europe. We have started the year reigniting brand love by celebrating women in our core customer demographic. We launched LinkedIn and "Real Runway" campaigns, which both share influential women’s stories. Our LinkedIn campaign called for nominations and self-nominations of women’s achievements in the workplace, and garnered approximately 630 million total impressions.

Key Operating and Financial Results. We have achieved the following operating and financial results for the years ended January 31, ~~2022~~2024 and ~~2021~~2023, respectively:

•Revenue was $~~203.3~~298.2 million and ~~$157.5~~$296.4 million, respectively, representing ~~29.1%~~0.6% growth ~~year-over-year~~year-over-year;

•~~115,240~~125,954 and ~~54,797~~126,712 ending Active Subscribers76 (excluding paused subscribers), respectively, representing ~~110% growth year-over-year.~~a change of (1)% year-over-year;

•~~159,544~~135,211 and ~~95,245~~128,586 Average Active Subscribers7, respectively, representing 5% growth year-over-year;

•173,247 and 171,998 ending Total Subscribers (including paused subscribers), respectively, representing ~~68%~~1% growth ~~year-over-year~~year-over-year;

•Gross Profit was ~~$69.7~~$119.7 million and ~~$15.5~~$120.0 million, respectively, representing a gross margin of ~~34.3%~~40.1% and ~~9.8%~~40.5%, ~~respectively~~respectively;

•Net Loss was ~~$(211.8)~~$(113.2) million and ~~$(171.1)~~$(138.7) million, respectively. Net Loss as a percentage of revenue was ~~(104.2)~~(38.0)%, ~~as compared to (108.6)~~and (46.8)% ~~in fiscal year 2020. Net Loss in fiscal year 2021~~, respectively, and included ~~$(51.5)~~$3.1 million and $7.7 million of ~~non-recurring or one-time~~restructuring and related charges, that were primarily non-cash, including a $(24.9) million non-recurring, non-cash loss on the revaluation of warrants that were exercised or reclassified at IPO, a $(12.2) million non-recurring, primarily non-cash loss on the extinguishment of debt paid down concurrently with the IPO, and a $(14.4) million non-cash charge associated with the one-time satisfaction of the liquidity based vesting conditions for certain RSUs upon the effectiveness of our IPO.respectively;

•Adjusted EBITDA was ~~$(19.2)~~$26.9 million and ~~$(20.3)~~$6.7 million, respectively, representing an Adjusted EBITDA margin of ~~(9.4)%~~9.0% and ~~(12.9)%~~2.3%, ~~respectively~~respectively;

•Net cash used in operating activities plus net cash used in investing activities was ~~$(64.8)~~$(70.3) million and ~~$(101.2)~~$(92.0) million, respectively; ~~and~~

•Net cash used in operating activities plus net cash used in investing activities as a percentage of revenue was ~~(31.9)~~(23.6)% and ~~(64.3)~~(31.0)%, ~~respectively.~~respectively; and

•Cash and Cash Equivalents was ~~$247.6~~$84.0 million and ~~$95.3~~$154.5 million, ~~respectively, after paydown~~respectively.

6 Active Subscribers is defined as ending total subscribers as of ~~$140.7 million of debt and accrued interest (approximately one-third~~period end, excluding paused subscribers.

7 Average Active Subscribers represents the mean of the ~~company’s pre-IPO debt balance) with~~beginning of quarter and end of quarter Active Subscribers for a ~~portion~~quarterly period; and for other periods, represents the mean of the ~~IPO proceeds.~~Average Active Subscribers of every quarter within that period.

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Our Product Acquisition Strategy

We acquire and monetize products in three ways: Wholesale, Share by RTR and Exclusive Designs. Wholesale items are acquired directly from brand partners, typically at a discount to wholesale price. Share by RTR items are acquired directly from brand partners on consignment, at zero to low upfront cost with performance-based revenue share payments to our brand partners over time. Exclusive Designs items are designed using our data in collaboration with our brand partners. These ~~units are manufactured through third-party partners with a low upfront fee and minimal revenue share payments to our brand partners over time.~~

7 ~~Active Subscribers is defined as ending total subscribers as of period end, excluding paused subscribers.~~

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~~Our~~ three product acquisition methods are strategic levers to manage our capital efficiency, profitability and product risk. Our Exclusive Designs channel uses data insights to acquire items at a lower cost, which are designed to generate higher profitability over time. Share by RTR meaningfully reduces our ~~upfront spend~~purchases of rental product and de-risks our investment since we pay brands primarily based on item performance. Our Share by RTR arrangements with brands target ~~delivering 85%~~delivering 75% to 100% of comparable ~~wholesale~~Wholesale cost to the brand in the first year; however there is no minimum commitment other than the upfront payment, if applicable. Nearly all Share by RTR deals consummated after September 2020 include a cap on total potential payments to the brand partner.

~~In fiscal year 2021, 45%~~The chart below summarizes the percentage of new items ~~were~~ acquired ~~through Wholesale, 33% through Share by RTR and 22% through Exclusive Designs, compared to 46% Wholesale, 36% Share by RTR and 18% Exclusive Designs in fiscal year 2020.~~via each method. In total, approximately ~~55%~~61% of new items were acquired through the more capital-efficient channels in fiscal year ~~2021,~~2023, approximately ~~54%~~58% in fiscal year ~~2020~~2022 and approximately ~~26%~~55% in fiscal year ~~2019.~~2021. Both our purchasing power and the diversification into Share by RTR and Exclusive Designs have led to a decrease in ~~average upfront cost per item~~rental product capital expenditures (or Purchases of Rental Product as presented in the Consolidated Statement of Cash Flows) as a percentage of revenue over time. We ~~expect~~plan to further decrease the percentage of units acquired through Wholesale and increase the percentage of units acquired through our more capital-efficient channels, Exclusive Designs and Share by RTR over time. We expect to incur considerably lower Purchases of Rental Product in fiscal year ~~2022.~~2024 relative to fiscal year 2023 due to fiscal year 2023 being impacted by the need to make rental product depth adjustments.

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Description

Consolidated Statement of Operations

Consolidated Balance Sheets

Consolidated Statement of Cash Flows

Percent of Items Acquired in FY ~~2021~~2023 / ~~2020~~2022 / ~~2019~~2021

WHOLESALE

Items are acquired directly from brands partners, typically at a discount to wholesale price

Cost is recognized through straight-line depreciation, with a three-year useful life and 20% salvage value, in the "Rental Product Depreciation and Revenue Share" line ⁽¹⁾

Total cost is capitalized as "Rental Products" in long-term assets

Total cost is recognized as a capital expenditure ("Purchases of Rental Product") at time of acquisition

~~45%~~39% / ~~46%~~42% / ~~74%~~45%

SHARE BY RTR ⁽²⁾

Items are acquired directly from brand partners on consignment, at zero to low upfront cost, with performance-based revenue share payments to our brand partners over time

Upfront and performance-based revenue share payments are expensed as incurred in the "Rental Product Depreciation and Revenue Share" line

Items are not capitalized on the balance sheet as we do not own them

Upfront revenue share payments flow through Net Income as incurred

33% / ~~36%~~27% / ~~15%~~33%

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EXCLUSIVE DESIGNS ⁽²⁾⁽³⁾

Items are designed using our data in collaboration with our brand partners

We manufacture through third-party partners and pay the brand partner an upfront fee and minimal revenue share payments

Upfront and performance-based revenue share payments are expensed as incurred in the "Rental Product Depreciation and Revenue Share" line

Manufacturing cost is recognized through straight-line depreciation, with a three-year useful life and 20% salvage value, in the "Rental Product Depreciation and Revenue Share" line ⁽¹⁾

Manufacturing cost is capitalized as "Rental Products" in long-term assets

Upfront and revenue share payments flow through Net Income as incurred

Manufacturing cost is recognized as a capital expenditure ("Purchases of Rental Product") at time of acquisition

~~22%~~28% / ~~18%~~31% / ~~11%~~22%

For additional details, refer to the section titled "Business - Our Unique Brand Partner Approach."

⁽¹⁾ The cost of accessory items, which made up less than 10% of the gross book value of rental product as of January 31, ~~2022,~~2024, is recognized through straight-line depreciation with two-year useful life and 30% salvage value.

⁽²⁾ For both Share by RTR and Exclusive Designs, the Company shares a percentage of revenue less a logistics fee with the brand. This revenue includes (i) revenue attributable to each item in connection with one-time reserve rentals; (ii) revenue attributable to each item from Subscription (this is based on the number of days at home during a subscription period); and (iii) revenue attributable to each item in connection with Resale of such items, less any liquidation costs. Both the percentage of revenue, and the logistics fees, can vary depending on the brand partner. Most Share by RTR items earn revenue until a cap has been reached, at which point, title generally passes from the brand to the Company.

⁽³⁾ ~~Includes~~Also includes a small number of products bearing our trademarks, which are non-Exclusive Designs produced by third-party partners, or our owned brands. These products are purchased at a significantly lower average cost than Wholesale.

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For additional details about our business model and our product acquisition strategy, see Part I, Item 1, “Business”.

Key Factors Affecting Our Performance

We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business, but also present risks and challenges that could adversely impact our growth and profitability.

Subscribers and Customers

Ability to Attract and Retain Subscribers and Customers and Our Attractive Cohort Trends. We believe that we have a significant market opportunity ~~ahead of us~~ to increase our base of subscribers and customers, and that our long-term growth depends in large part on our continued ability to acquire and retain ~~customers~~subscribers and ~~subscribers.~~customers.

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We provide a flexible offering that allows our subscribers to customize their subscription as their everyday life changes, choosing to pause and reactivate their membership as needed. We have also historically seen that many subscribers who cancel their subscription will return and resubscribe when membership again makes sense for their everyday life. Our strategies in fiscal year 2023 were focused on investing in and improving the customer experience to drive growth, including improving rental product in-stock levels, which we believe impacted subscriber growth in the second and third quarters of fiscal year 2023. Our data indicates that newer subscribers were most negatively impacted by lower rental product in-stock levels. We have implemented plans to address these lower in-stock levels through higher levels of rental product depth per style in future rental product purchases. We have seen an improvement to retention in the third and fourth quarters of fiscal year 2023 and expect these changes to have an even greater positive impact during fiscal year 2024. We believe that improving retention in the first 90 days of a subscription, which is when the majority of subscriber churn typically occurs, can increase loyalty and subscriber growth. Further, in the second quarter of fiscal year 2023, we experimented with changes to our initial promotion prices for Subscription, which impacted subscriber acquisition. We further reduced promotions in the third quarter of fiscal year 2023, as we believe that being less promotional going forward will have improved effects on retention and the overall health of the business over the longer-term and enable us to invest these resources into the customer experience. We expect our promotional activities to be below historical averages in the near to medium term, which is anticipated to reduce subscriber acquisition in the near term; however, depending on market conditions and other factors, we will likely conduct additional experiments and may make changes to our promotions strategy in the future, which could impact subscriber acquisition.

We partly assess the health of our business by analyzing the performance of our historical customer cohorts over time. ~~A significant portion of our total revenue in each year is generated from~~We place customers acquired in previous years. We therefore believe that the performance of our customer cohorts supports our strategies of investing in subscriber and customer acquisition and retention and enhancing the scale of our platform.

The chart below indicates cumulative revenue per customer by customer cohort, which is defined as cumulative total revenue generated by a cohort across all of our product offerings, divided by the original number of customers in the cohort. Customers are placed in cohorts based on the fiscal year in which they first transacted with RTR. ~~Data points reflect only the monthly cohorts that have reached each respective life to date period. Our customer cohorts demonstrate the continued spend and expansion~~A significant portion of our ~~customers:~~total revenue in each fiscal year is generated from customers acquired in previous years. For example, approximately one-third of our revenue in fiscal year 2023 was generated by customers who placed their first order with us in fiscal year 2017 or prior.

•~~Each successive customer cohort has higher spending patterns, except for~~We also assess the ~~FY 2020 cohort, which was most impacted by COVID-19.~~

•~~Higher spending is driven by increased customer loyalty and customers renting for more days per year, particularly through our Subscription offering.~~

•~~Our FY 2021 cohort which is less impacted by COVID-19, exhibited better trends than the FY 2016-2020 historical cohorts.~~

•Over the last three years, we have increasingly directed customers to our higher revenue Subscription offerings, which has driven a year-over-year improvement in cumulative revenue per customer by cohort as a greater percentageproductivity of our historical customer cohorts by measuring the revenue and profit we generate from all new customers ~~are subscribers. After~~over their lifetime (“LTV”) against customer acquisition costs (“CAC”). We define LTV as cumulative total revenue generated across all of our product offerings (which includes Subscription and Reserve Rental Revenue and Other Revenue) by current or previous subscribers or customers, minus fulfillment expenses, rental product depreciation and revenue share expenses, credit card fees and customer service personnel and related expenses incurred to generate such revenue divided by the ~~first six months as~~number of new customers acquired during that period. Any LTV generated by a customer ~~we see an inflection in spending as our most loyal customers remain on~~is assigned to the ~~platform.~~

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original cohort year that the customer first joined. We define CAC as total marketing expense, ~~other than employee expenses,~~excluding marketing personnel and related costs incurred in a fiscal year divided by the number of new customers acquired in that period. We acquire customers efficiently as evidenced by over 80% of our lifetime customers having joined organically.

As seen in the table below, our LTV to CAC ratio has remained relatively consistent for our fiscal year 2018 through fiscal year 2023 customer cohorts, with the exception of our fiscal year 2020 cohort which was impacted by the COVID-19 pandemic. The fiscal year 2021 cohort, which benefited from strong loyalty post-recovery from the pandemic, exhibited an LTV to CAC ratio of 0.7x in its first six months and 1.3x in its first twelve months, implying that we recovered our customer acquisition cost between six months and twelve months for this cohort. Our fiscal year 2023 cohort thus far is exhibiting an LTV to CAC ratio of 0.5x in its first six months. We ~~also specifically assess~~anticipate that the~~behavior of subscribers given they contribute~~ improvement in our customer experience due to the ~~majority~~improved trends of our ~~revenue. Cumulative revenue per subscriber by cohort is defined as cumulative total revenue generated across all~~in-stock rate in fiscal year 2023, and further expected improvement in fiscal year 2024 from our plan to reignite our lifecycle marketing strategy, will benefit the retention and lifetime value of our ~~product offerings (which includes Subscription and Reserve Rental Revenue and Other Revenue) by~~customer cohorts. Cohorts have continued to grow over time as our most loyal customers ~~who are current or previous subscribers, divided~~continued to spend with us, as demonstrated by the ~~original number of subscribers~~strength in ~~the cohort. Subscribers are placed in cohorts based on~~ the fiscal year ~~in which they first joined a subscription program. Data points reflect only the monthly cohorts that have reached each respective life to date period.~~2018, 2019, 2020 and 2021 cohorts.

•~~Within 3, 6 and 12 months, subscribers from our fiscal year 2018 and 2019 cohorts generated an average~~Table of ~~$286, $460 and $691 in cumulative revenue, respectively.~~Contents

•~~Our FY 2020 subscriber cohort generated an average of $255, $395 and $622 in cumulative revenue within 3, 6 and 12 months, respectively.~~

•Our FY 2021 subscriber cohort exhibited better trends in FY 2021 compared to our FY 2018, FY2019 and FY 2020 cohorts, generating $300 in cumulative revenue in 3 months and $497 in 6 months, largely due to the changes we made in 2021 to our subscription programs which have resulted in higher gross margins and revenue per order.

Brands and Products

Ability to Acquire, Manage and Monetize Products Efficiently. Our ability to deliver an elevated experience for our subscribers and customers that keeps them loyal to RTR depends on us having the right assortment. For example, in fiscal year 2023 we focused on enhancing the availability of the items on our site and increasing the depth of our buys (i.e., purchasing more units of particular styles). Due to our deep partnerships with brands, flexibility in our buying timelines and ability to react to advantageous retail purchasing environments, we can acquire products directly from ~~them~~brands in multiple ~~ways, and due to our~~cost effective ways. Our expertise in reverse logistics and garment restoration ~~we can~~also provides us with the ability to monetize our products effectively over their useful life. Diversifying our product acquisition away from 100% Wholesale has driven higher overall product return on investment and reduced the capital needs of the business. In fiscal year ~~2021,~~2023, approximately ~~55%~~61% of new items were acquired through our more capital efficient non-Wholesale channels, compared to ~~54%~~58% in fiscal year ~~2020~~2022 and ~~26%~~55% in fiscal year ~~2019.~~2021. We plan to further increase the percentage of units acquired through Exclusive Designs and Share by RTR in fiscal year 2024. We continuously evaluate our product acquisition mix to maximize our strategic priorities.

~~Upfront~~Purchases of rental product includes the cost ~~per item is defined as total upfront spend for items acquired in a period divided by the number~~ of ~~items acquired. We define total upfront spend as the total costs of~~wholesale products acquired in athe period excluding performance based revenue share payments which are paid out over time. Total upfront spend includes the total acquisition cost for Wholesale items, upfront payments to brand partners for Share by RTR and Exclusive Designs items, third party manufacturing or other similar acquisition costs for Exclusive Designs items, and other ancillary ~~upfront~~ costs such as freight, where applicable. ~~For fiscal year 2021~~Many factors impact the purchases of rental product including our ~~average upfront cost per item was $95, representing~~depth and acquisition mix strategy, the proportion of subscribers to total customers, timing of when those subscribers are acquired, the formality of styles, brand assortment, opportunities in the market and timing of when the rental product is received and paid for. Purchases of rental product as a ~~14% decrease from an average upfront cost~~percentage of ~~$111~~revenue in fiscal year ~~2019. Our diversification into non-Wholesale channels has meaningfully reduced~~2023 was 26% as a result of lower sales and the impact of the adjustment to our ~~upfront spend.~~rental product depth in fiscal year 2023. Purchases of rental product as a percentage of revenue was 21% and 15% in fiscal year 2022 and 2021, respectively. We anticipate this percentage to decrease in fiscal year 2024 compared with fiscal year 2023 due to higher sales projections and the impact of the aforementioned adjustment to our rental product depth in fiscal year 2023. Due to seasonality factors, we track our progress on purchases of rental product as a percentage of revenue on a full year basis, as quarterly expenditures are not necessarily reflective of full year trends. In addition, we intend to comply with the mutually agreed upon quarterly and annual spend levels for rental product capital expenditures during fiscal year 2024 in our 2023 Amended Temasek Facility.

Ability to Achieve Leverage in our Cost Structure. Improving operational efficiency of our platform is imperative to ~~maintaining~~or increasing profitability. We expect certain of our operating costs to increase as order volume increases and as we make investments to grow subscribers and revenue and to enhance the customer experience. In September 2022, we announced a restructuring plan that reduced operating expenses by approximately $27 million in the four quarters following the restructuring compared to the annualized run rate for the second quarter of fiscal year 2022. In January 2024, we announced a restructuring plan expected to generate total annual operating expense savings of approximately $12 million, which primarily includes the reduction in force, with some open role closures/reduced backfills, and excludes potential hiring of new employees or other additions to the Company’s costs and expenses. Though we anticipate quarterly fluctuations in operating leverage, with these reductions and continuous improvements to our cost structure, we ~~do not~~ expect ~~these~~our fixed costs to ~~generally~~decrease as a percentage of total revenue in fiscal year 2024, and over time we anticipate that our operating costs will grow ~~at the same pace as~~more slowly than our total revenue on an annual basis. In addition, we intend to comply with the mutually agreed upon quarterly and annual spend levels relating to our operating costs (i.e., fixed operating expenditures and marketing expenditures) during fiscal year 2024 in our 2023 Amended Temasek Facility.

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We use technology and customer data to drive efficiency across products, fulfillment expenses and operating costs. Our data has allowed us to build a differentiated and proprietary rental reverse logistics platform with a vertically integrated cleaning and restoration process. We have invested in technology and automation in order to drive operating leverage and higher margins as we grow and scale our business.

Over time, we have improved our margins, profitability and cash flow, and we believe we will continue to benefit from economies of ~~scale and~~scale. We are focused on driving additional efficiencies in our operating expenses and growing profitability to also cover rental product depreciation, in addition to fulfillment, revenue share and operating expenses.

We use Adjusted EBITDA to assess our operating performance and the operating leverage of our business prior to capital expenditures. We also measure the cash consumption of the business including capital expenditures by assessing net cash used in operating activities and net cash used in investing activities on a combined basis.

The 2023 Amended Temasek Facility reduces our cash interest payments during fiscal years 2024 and 2025 relative to the original agreement, which we expect to improve our overall liquidity.

Seasonality

We experience seasonality in our business, which has been impacted and may in the future change due to the effects of COVID-19, the ~~COVID-19 pandemic.~~macro environment, and business decisions. For our ~~subscription~~Subscription rentals, we typically acquire the highest number of subscribers in March through May and September through November, as these are the times customers naturally think about changing over their wardrobes. We generally see a higher rate of subscribers pause in the summer, and in mid-December through the end of January. ~~We historically had typically realized a higher portion of revenue from Reserve rentals during our~~In the third and fourth fiscal quarters, ~~as a result of~~our Reserve business historically (prior to COVID-19) benefited from increased wedding and holiday ~~events.~~

~~The third~~events but this seasonality has varied since the onset of COVID-19. In fiscal year 2022, we believe that a price increase of our Subscription programs in April 2022 affected traditional seasonal patterns. In fiscal year 2023, changes in rental product in-stock levels and ~~fourth fiscal quarters of 2021 demonstrated subscriber~~changes to promotional prices also disrupted typical seasonality. Given continued business changes, our future seasonality ~~patterns that are generally consistent with our~~may not resemble historical trends, though our fourth quarter of 2021 saw a higher rate of pause activity due to the Omicron variant impact. In addition, our seasonality trends are seeing effects from COVID-19 generally, as Reserve orders and revenue are impacted by fewer large-scale holiday and special events compared to pre-COVID-19, especially those typically occurring in the third and fourth quarters. Subscriber acquisition was also impacted by COVID-19 in the fourth quarter of 2021 due to fewer large-scale holiday and special events.trends.

We also experience seasonality in the timing of expenses and capital outlays. Transportation expense, and therefore fulfillment cost, is typically highest in the fourth fiscal ~~fourth~~ quarter, given typical timing of carrier rate increases, higher service levels, such as more costly and expedited shipping, and competition during holidays. Our most significant product capital expenditures typically occur in the first fiscal quarter and the third fiscal quarter, when we acquire product for the upcoming fall and spring ~~seasons, though~~seasons. However, the impact on cash is historically dependent on timing of receipt of product.

For additional information, see the section of Part I, Item 1A, “Risk Factors — Risks Relating To Our Business and Industry — Our business is affected by seasonality.”

Impact of ~~COVID-19~~Macro and Consumer Environment on Our Business

~~The COVID-19 pandemic materially adversely affected our fiscal year 2020 operating~~

There remains significant uncertainty in the current macroeconomic and consumer environment, driven by several factors, including inflationary pressures, higher interest rates, potential risk of recession, ongoing industry-wide supply chain issues, instability in the financial ~~results. In March 2020, we instituted numerous health~~system, the wars in Ukraine and ~~safety measures~~the Middle East and ~~took immediate financial actions~~COVID-19. These factors have impacted, and are expected to ~~withstand COVID-19 including pausing of paid advertising~~continue to impact, consumer discretionary spending and ~~marketing activities~~purchasing behavior, price sensitivity, wage rates, transportation costs, and other ~~cost-saving measures to reduce operating and capital expenditures in the short term, including salary reductions, closing of brick and mortar stores and right sizing of labor in~~costs associated with our fulfillment centers. These actions significantly reduced these costs as a percentage of revenue throughout fiscal year 2020. Rental product depreciation and revenue share as a percentage of revenue increased throughout fiscal year 2020 due to the levels of rental product on hand relative to the reduced subscriber levels.business.

~~In fiscal year 2021,~~We continue to review and learn how changes in customer behavior post the COVID-19 pandemic may impact our ~~financial results continued~~business and demand, particularly in a challenging macro environment. We believe that Active Subscriber levels have been impacted by seasonal changes in consumer behavior and macro factors, such as higher levels of remote work and evolving demand for work wear, inflationary pressures and sensitivity to increased pricing, or other factors, and may continue to be impacted by ~~the COVID-19 pandemic. In particular,~~these factors in the first quarter of fiscal year 2021 subscriber acquisition and engagement increased as shelter-at-home restrictions were lifted. In the fourth quarter of fiscal year 2021 the Omicron variant negatively impacted us in three key ways by: 1) significantly decreased revenue from our Reserve business as most holiday events were canceled; 2) reduced subscriber acquisition in the second half of quarter; and 3) drove a higher rate of subscriber pause. In fiscal year 2021, results also continued to be impacted by consumers working primarily from home and by special events and occasions not being back to pre-pandemic levels.future.

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We expect the effects of the COVID-19 pandemic and related macro-economic trends, including the spread of potential new variants, to have a continued impact on our business, results of operations, growth rates, and financial condition into fiscal year 2022. In fiscal year 2022, we currently expect an operating environment that, while improved from fiscal year 2021, continues to be impacted by COVID-19. However, we also believe that the backlog of special events and leisure travel that have been pushed to 2022 and 2023 will contribute to additional COVID-19 recovery in those periods.

We continue to take actions to adjust to the changing ~~COVID-19~~ business environment and related inflationary pressure. For example, in light of potential pricing sensitivity in the current macro-economic environment, we are focused on investing in our customer and delivering even more value to her, and emphasizing the value proposition of our offering in our marketing materials. In addition, we increased wage rates ~~throughout~~during fiscal ~~year 2021~~years 2022 and 2023 to attract and retain talent at our fulfillment centers and we expect to continue to be impacted by rising labor costs in ~~fiscal year 2022.~~the future. We also expect transportation costs to ~~continue to increase~~decrease as a percentage of sales in fiscal year ~~2022,~~2024 due to transportation efficiencies and the impact of our new transportation contract with a major national carrier, effective in September 2023. While we ~~are focused on diversifying our~~expect to be able to reduce transportation ~~network~~costs as a percentage of sales in fiscal year 2024, we plan to continue to mitigate ~~these~~longer-term rising costs by seeking to optimize shipping methods and ~~service delays. Examples of these mitigation efforts include increasing volumes with regional~~improve contractual and ~~last-mile carriers and consolidating shipments, such as through the launch of an at-home pickup service in certain markets.~~pricing terms. Although we continue to face a challenging environment, ~~due to the COVID-19 pandemic, rising wages, a decreased level of workforce participation and nationwide shipping carrier delays,~~ we ~~have been able to and~~ plan to ~~continue hiring~~invest in our customers, manage our staffing and ~~are diversifying~~further leverage our transportation ~~network~~partners to help to drive growth and efficiencies in ~~order to support increasing and/or fluctuating demand for~~ our ~~offerings.~~business.

The full extent to which the ~~COVID-19 pandemic, including the spread of any new variants,~~macro environment will directly or indirectly impact our business, results of operations, growth rates, and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted. Given ~~the~~this uncertainty, we cannot estimate the financial impact of the ~~pandemic~~macro environment on our future results of operations, cash flows, or financial ~~condition.~~condition. For additional details, see Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K.

Key Business and Financial Metrics

In addition to the measures presented in our consolidated financial statements, we use the following key business and financial metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. The calculation of the key business and financial metrics discussed below may differ from similarly titled metrics used by other companies, securities analysts or investors, limiting the usefulness of those measures for comparative purposes. These key business and financial metrics are not meant to be considered as indicators of our financial performance in isolation from or as a substitute for our financial information prepared in accordance with ~~GAAP~~generally accepted accounting principles in the United States (“U.S. GAAP”) and should be considered in conjunction with other metrics and components of our results of operations, such as each of the other key business and financial metrics, and our revenue and net loss.


		Years Ended January 31,
		2022		2021		2020
	Years Ended January 31,									Years Ended January 31,
	2024							2024	2023		2022

Active Subscribers	Active Subscribers	115,240		54,797		133,572
Active Subscribers
Active Subscribers
Average Active Subscribers
Gross Profit	Gross Profit	$	69.7	$	15.5	$	53.6
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	(19.2)	$	(20.3)	$	(18.0)

__________

(1)Adjusted EBITDA is a non-GAAP financial measure; for a reconciliation to the most directly comparable U.S. GAAP financial measure, net loss, and why we consider Adjusted EBITDA to be a useful metric, see “—Non-GAAP Financial Metrics” below.

Active Subscribers: Active Subscribers represents the number of subscribers with an active membership as of the last day of any given period and ~~excludes~~excludes paused subscribers. ~~In fiscal year 2020, we saw our Active Subscribers decrease due to the COVID-19 pandemic. However, a significant number of our subscribers put their membership on pause rather than canceling.~~ As of January 31, ~~2022,~~2024, we had ~~115,240~~125,954 Active Subscribers, a change of (1)% year-over-year. Our Active Subscribers decreased year-over-year, which we believe was primarily due to the impact of lower rental product in-stock levels, changes in our promotional strategy and lower marketing spend.

Average Active Subscribers: Average Active Subscribers represents the mean of the beginning of quarter and end of quarter Active Subscribers for a quarterly period; and for other periods, represents the mean of the Average Active Subscribers of every quarter within that period. As of January 31, 2024, we had 135,211 Average Active Subscribers, up ~~110%~~ ~~year-over-year. Our Active Subscribers~~from 128,586 as of January 31, ~~2022, were impacted by the Omicron variant of COVID-19, which reduced subscriber acquisition in the second half of the fourth quarter and drove~~2023 or a ~~higher rate of subscriber pause.~~5% increase year-over-year.

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Gross Profit and Gross Margin: We define Gross Profit as total revenue less costs related to activities to fulfill customer orders and rental product acquisition costs, presented as fulfillment ~~expense,~~and rental product depreciation and revenue ~~share.~~share, respectively, on the consolidated statement of operations. We depreciate owned apparel assets over three years and owned accessory assets over two years net of 20% and 30% salvage values, respectively, and recognize the depreciation on a straight-line basis and remaining cost of items when sold or retired on our consolidated statement of operations. Rental product depreciation expense is time-based and reflects all rental product items we own. We use Gross Profit and Gross Profit as a percentage of revenue, or Gross Margin, to measure the continued efficiency of our business after the cost of our products and fulfillment costs are included.

Gross Profit was ~~$69.7~~$119.7 million for the year ended January 31, ~~2022~~2024 compared to ~~$15.5~~$120.0 million for the year ended January 31, ~~2021~~2023 representing Gross Margins of ~~34.3%~~40.1% and ~~9.8%~~40.5%, ~~respectively. The increase in~~respectively. Gross Profit and Gross Margin for the year ended January 31, ~~2022 was driven by~~2024 decreased slightly due to the ~~improvement in some areas~~impact of ~~fulfillment costs and lower~~higher rental product depreciation and revenue share ~~which represented~~costs as a ~~lower~~ percentage of ~~total revenue than in the prior periods. The increase was~~sales, partially offset by ~~higher operations wage rates and transportation costs.~~lower fulfillment costs as a percentage of sales, despite adding an additional unit to all subscription shipments in March 2023. We ~~expect~~will seek to ~~have the opportunity~~continue to ~~improve Gross Profit and Gross Margin over time by driving growth in total revenue and revenue per subscriber,~~drive fulfillment and operational efficiency gains over time and strategically ~~evolving~~evolve our mix of revenue and product ~~acquisition.~~acquisition to offset cost increases.

Adjusted EBITDA and Adjusted EBITDA Margin: We define Adjusted EBITDA as net loss, adjusted to exclude interest expense, rental product depreciation, other depreciation and amortization, share-based compensation expense, write-off of liquidated rental product assets, certain non-recurring or one-time costs (see below footnotes to the reconciliation table), non-ordinary course legal expenses, restructuring charges, loss on asset impairment related to restructuring, income ~~taxes,~~tax (benefit) expense, warrant liability revaluation gains / losses, debt extinguishment gains / losses, other income and expense, and other gains / losses. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenue, net for a period. Adjusted EBITDA was ~~$(19.2)~~$26.9 million for the year ended January 31, ~~2022~~2024 compared to ~~$(20.3)~~$6.7 million for the year ended January 31, ~~2021,~~2023, representing margins of ~~(9.4)%~~9.0% and ~~(12.9)%~~2.3%, respectively. Adjusted EBITDA ~~and Adjusted EBITDA~~ Margin ~~have increased~~significantly improved for the year ended January 31, ~~2022~~2024 due to the ~~improvement in Gross Profit and Gross Margin,~~impact of the September 2022 restructuring plan, and improved operating leverage across technology, marketing and general and administrative expenses ~~excluding one-time costs~~even with additional strategic investments. In the third quarter of fiscal year 2022, we launched a two-pronged pilot with Amazon to (1) sell our brand new Exclusive Design products wholesale and ~~share-based compensation.~~ (2) launch a new liquidation partnership, which together contributed $5.1 million to Adjusted EBITDA in fiscal year 2022.

We believe we have the opportunity to improve Adjusted EBITDA and offset cost increases as we increase revenue and drive ~~higher revenue per subscriber,~~ fulfillment and operational efficiency gains and operating expense leverage. In particular, we continue to expect our January 2024 restructuring plan to significantly reduce fixed costs and improve operating expense leverage in fiscal year 2024 compared to fiscal year 2023.

Components of Results of Operations

Total Revenue, Net

Our total revenue, net consists of Subscription and Reserve rental revenue and Other revenue. Total revenue is presented net of promotional discounts, credits and refunds and taxes.

Subscription and Reserve Rental Revenue. We generate Subscription and Reserve rental revenue from subscription and Reserve rental fees. We recognize subscription fees ratably over the subscription period, commencing on the date the subscriber enrolls in a subscription program. These fees are collected upon enrollment and any revenue from an unrecognized portion of the subscription period is deferred to the following fiscal period. We ~~recently announced a price increase for our subscription plans, which we expect will generally increase revenue per subscriber by program over time. We~~ recognize Reserve fees over the rental period, which starts on the date of delivery of the product to the customer. Reserve orders can be placed up to two months prior to the rental start date (formerly four months prior to the rental start date, effective October 2023) and the customer’s payment form is charged upon order confirmation. We defer recognizing the rental fees and any related promotions for Reserve rentals until the date of delivery, and then recognize those fees evenly over the four- or eight-day rental period.

Table of Contents

Other Revenue. We generate Other revenue primarily from the sale of products while they are in rental condition. We offer the ability for subscribers and customers to purchase products at a discount to retail price. Payment for the sale of products occurs upon order confirmation while the associated revenue is recognized either at the time the sold product is delivered ~~to the customer~~ or when purchased, if the item is already at home with the customer. From time to time, Other revenue may include revenue generated from pilots and other growth initiatives which may cause quarterly fluctuations in the Other revenue line.

~~Table of Contents~~

Costs and Expenses

Fulfillment. Fulfillment expenses consist of all costs to receive, process and fulfill customer orders. This primarily includes shipping costs to/from customers and personnel and related costs, which ~~includes~~include salaries and bonuses, and employee benefit costs. Personnel and related costs are related to processing inbound and outbound customer orders, cleaning, restoring and repairing items received from customers, tracking and managing items within our fulfillment center network and ingesting new items received from brands. Fulfillment expenses also include costs of packing materials, cleaning supplies, and other fulfillment-related expenses. ~~We expect fulfillment costs to increase in the future as order volume increases and because costs to ship and process orders to/from customers are expected to increase~~Fulfillment expense may fluctuate due to ~~increasing prices in the transportation~~various factors including commercial terms and market ~~which we started to see in the third and fourth quarters of fiscal year 2021. We~~trends. Fulfillment expense may also ~~expect fulfillment expense to~~ increase due to competitive pressures in the labor market which could lead to continued higher ~~wage rates. We increased warehouse wage rates during the year ended January 31, 2022 and believe we will continue to be impacted by rising~~ wage rates. We expect to continue to invest in automation and other process improvements to support and drive efficiencies in our operations. To the extent we are successful in becoming more efficient in fulfilling orders, and at a magnitude that is able to offset ~~increasing~~long-term increases in shipping costs, wage rates and cleaning/packing supply price increases, we would expect these expenses to decrease as a percentage of total revenue over the longer term.

Technology. Technology expenses consist of personnel and related costs for employees engaged in software development and engineering, quality assurance, product, customer experience, data science, analytics and information technology-related efforts, net of personnel costs associated with capitalized software. Technology expenses also include professional services, third-party hosting expenses, website monitoring costs, and software and license fees. ~~We expect to~~Over the long term, these expenses may increase ~~technology expenses~~(in total dollars) as we continue to improve the customer and subscriber experience and invest in our technology stack and infrastructure to support overall growth in our ~~business and distribution network.~~business. While these expenses may vary from period to period as a percentage of total revenue, we expect them to decrease as a percentage of total revenue over the longer term.

Marketing. Marketing expenses include online and mobile marketing, search engine optimization and email costs, marketing personnel and related costs, agency fees, brand marketing, printed collateral, consumer research, and other related costs. ~~We expect marketing~~Marketing expenses unrelated to personnel costs may increase asif we ~~intend to~~ increase marketing spend to drive the growth of our business and increase our brand awareness. ~~The trend and timing of our brand marketing expenses will depend in part on the timing of marketing campaigns.~~

General and Administrative. General and administrative (“G&A”) expenses consist of all other personnel and related costs ~~including~~for customer service, finance, tax, legal, human resources, fashion and photography and fixed operations costs. General and administrative expenses also ~~include~~includes occupancy costs (including warehouse-related), ~~photography costs,~~ professional services, credit card fees, general corporate and warehouse expenses, other administrative costs, ~~gains and losses due to foreign exchange rate fluctuations associated with consolidating our foreign subsidiary at each period end,~~ and gains and losses associated with asset disposals and operating lease ~~terminations.~~terminations We expect to ~~increase general~~incur lower fixed cost G&A expense dollars and ~~administrative~~as a percentage of total revenue in the short term as a result of our restructuring plan. Over the longer term, these expenses may increase as we grow our infrastructure to support ~~operating as a public company and~~ the overall growth of the business. ~~We also expect rent~~Rent expense and other facilities-related costs tomay increase in the future ~~as we expand our distribution network~~due to inflation or to support overall business growth and fulfillment ~~cost-reduction initiatives.~~efficiencies. While these expenses may vary from period to period as a percentage of total revenue, we expect them to decrease as a percentage of total revenue over the longer term.

Rental Product Depreciation and Revenue Share. Rental product depreciation and revenue share expenses consist of depreciation and write-offs of rental products, and payments under revenue share arrangements with brand partners. We depreciate the cost, less an estimated salvage value, of our owned products (Wholesale and Exclusive Designs items), over the estimated useful lives of these items and, if applicable, accelerate depreciation of the items when they are no longer in rental condition. We recognize the cost of items acquired under Share by RTR, as incurred, through upfront payments and performance-based revenue share payments. We expect rental product depreciation and revenue share expenses to increase in absolute dollars as we continue to support subscriber and customer growth. The amount and proportion of rental product depreciation and revenue share will vary from period to period based on how and when we acquire items as well as the mix of our rental product base.

7175

Table of Contents

Other Depreciation and Amortization. Other depreciation and amortization expenses consist of depreciation and amortization amounts for fixed assets, intangible assets including capitalized software, and financing right-of-use assets.

Restructuring Charges. Restructuring charges consist of severance and related costs associated with the January 2024 and September 2022 restructuring plans.

Loss on Asset Impairment Related to Restructuring. Loss on asset impairment related to restructuring consists of asset impairment charges related to the discontinuation of a software implementation project and two warehouse operations projects in connection with the January 2024 and September 2022 restructuring plans.

Interest Income / (Expense). Interest income / (expense) consists primarily of accrued paid-in-kind interest, cash interest and debt issuance cost amortization associated with our 2023 Amended Temasek Facility going forward. The 2023 Amended Temasek Facility eliminates all interest (both payment-in-kind and cash interest) for a period of six full fiscal quarters beginning with the fourth quarter of fiscal year 2023.

Gain / (Loss) on Warrant Liability Revaluation, Net. Gain / (loss) on warrant liability revaluation is associated with revaluing liability classified warrants to the respective fair value at period end or prior to conversion. As of January 31, ~~2022,~~2024, all outstanding warrants are equity classified and therefore do not require remeasurement going forward.

Gain / (Loss) on Debt Extinguishment, Net. Gain / (loss) on debt extinguishment is associated with debt extinguishment including the write off of the unamortized debt issuance ~~costs which most recently occurred at the time of our IPO.~~costs. These are primarily non-cash and are associated with debt ~~paydown~~payment transactions which are non-recurring.

Other Income / (Expense). Other income / (expense) consists primarily of proceeds from previous insurance claims, ~~and~~ proceeds from monetizing tax credits associated with ~~growth.~~growth and Irish refundable tax credits.

Income Tax Benefit / (Expense). Income taxes consist primarily of state minimum ~~taxes~~ and ~~Irish refundable tax credits.~~foreign taxes. We have established a valuation allowance for our U.S. federal and state deferred tax assets, including net operating losses. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized by way of expected future taxable income in the United States.

7276

Table of Contents

Results of Operations

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report on Form 10-K. The following tables set forth our results of operations for the periods presented:


		Years Ended January 31,
		2022		2021		2020
		(in millions)
	Years Ended January 31,									Years Ended January 31,
	2024							2024	2023		2022
	(in millions)									(in millions)
Revenue:	Revenue:
Subscription and Reserve rental revenue
Subscription and Reserve rental revenue
Subscription and Reserve rental revenue	Subscription and Reserve rental revenue	$	185.8	$	135.9	$	235.4
Other revenue	Other revenue	17.5		21.6		21.5
Total revenue, net	Total revenue, net	203.3		157.5		256.9
Costs and expenses:	Costs and expenses:
Fulfillment
Fulfillment
Fulfillment	Fulfillment	61.9		53.0		118.1
Technology	Technology	45.3		37.7		40.2
Marketing	Marketing	26.5		8.1		22.9
General and administrative	General and administrative	104.4		77.2		98.9
Rental product depreciation and revenue share	Rental product depreciation and revenue share	71.7		89.0		85.2
Other depreciation and amortization	Other depreciation and amortization	19.4		23.0		21.6
Restructuring charges
Loss on asset impairment related to restructuring
Total costs and expenses	Total costs and expenses	329.2		288.0		386.9
Operating loss	Operating loss	(125.9)		(130.5)		(130.0)
Interest income / (expense), net	Interest income / (expense), net	(53.0)		(46.6)		(24.0)
Gain / (loss) on warrant liability revaluation, net	Gain / (loss) on warrant liability revaluation, net	(24.9)		0.4		—
Gain / (loss) on debt extinguishment, net	Gain / (loss) on debt extinguishment, net	(12.2)		(0.6)		—
Other income / (expense), net	Other income / (expense), net	3.9		6.2		(0.1)
Net loss before income tax benefit / (expense)	Net loss before income tax benefit / (expense)	(212.1)		(171.1)		(154.1)
Income tax benefit / (expense)	Income tax benefit / (expense)	0.3		—		0.2
Net loss	Net loss	$	(211.8)	$	(171.1)	$	(153.9)


Delaware						80-0376379
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

10 Jay Street Brooklyn, New York 11201						11201
(Address of Principal Executive Offices)						(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.001 per share	RENT	The Nasdaq ~~Stock~~Capital Market ~~LLC~~


		Page
Part I
Item 1.	Business	4
Item 1A.	Risk Factors	1716
Item 1B.	Unresolved Staff Comments	5961
I tem 1C.	C ybersecurity	61
Item 2.	Properties	5962
Item 3 .3.	Legal Proceedings	5962
Item 4.	Mine Safety Disclosures	5962

Part II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6063
Item 6.	[Reserved]	6164
Item 7 .7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	6265
Item 7A .7A.	Quantitative and Qualitative Disclosures About Market Risk	8186
Item 8 .8.	Financial Statements and Supplementary Data	8287
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	~~118~~127
Item 9A .9A.	Controls and Procedures	~~118~~127
Item 9B .9B.	Other Information	~~119~~128
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~119~~128

Part III
Item 10.	Directors, Executive Officers and Corporate Governance	~~120~~130
Item 11.	Executive Compensation	~~120~~130
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~120~~130
Item 13.	Certain Relationships and Related Transactions and Director Independence	~~120~~130
Item 14.	Principal Accounting Fees and Services	~~120~~130

Part IV
Item 15.	Exhibits and Financial Statement Schedules	~~121~~131
Item 16.	Form 10-K Summary	~~124~~135
	Signatures	~~125~~136


	Years Ended January 31,
	2022		2021		2020
	(in millions)
Net cash (used in) provided by operating activities	$	(42.3)	$	(42.8)	$	(37.6)
Net cash (used in) provided by investing activities	(22.5)		(58.4)		(138.6)
Net cash (used in) provided by financing activities	215.2		168.5		177.9
Net increase in cash and cash equivalents and restricted cash	150.4		67.3		1.7
Cash and cash equivalents and restricted cash at beginning of period	109.2		41.9		40.2
Cash and cash equivalents and restricted cash at end of period	$	259.6	$	109.2	$	41.9


	Years Ended January 31,
	2024		2023		2022
	(in millions)
Net cash (used in) provided by operating activities	$	(15.7)	$	(47.7)	$	(42.3)
Net cash (used in) provided by investing activities	(54.6)		(44.3)		(22.5)
Net cash provided by (used in) financing activities	0.7		(4.0)		215.2
Net (decrease) increase in cash and cash equivalents and restricted cash	(69.6)		(96.0)		150.4
Cash and cash equivalents and restricted cash at beginning of period	163.6		259.6		109.2
Cash and cash equivalents and restricted cash at end of period	$	94.0	$	163.6	$	259.6


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			8388
Consolidated Balance Sheets as of January 31, ~~2022~~2024 and ~~2021~~2023			8489
Consolidated Statements of Operations for the Years ended January 31, ~~2022~~,~~2021~~2024, 2023 and ~~2020~~2022			8590
Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ ~~Deficit~~Equity (Deficit) for the Years ended January 31, ~~2022~~, ~~2021~~2024, 2023 and ~~2020~~2022			8691
Consolidated Statements of Cash Flows for the Years ended January 31, ~~2022~~, ~~2021~~,2024, 2023, and ~~2020~~2022			8792
Notes to Consolidated Financial Statements
1. Business			8994
2. Summary of Significant Accounting Policies			8994
3. Liquidity ~~and Impact of COVID-19 Pandemic~~			99105
4. ~~Leases- Lessee Accounting~~			99
~~5. Rental Product, Net~~			~~101~~
~~6. Fixed~~Restructuring and ~~Intangible Assets, Net~~			~~102~~
~~7. Long-Term Debt~~			~~103~~
~~8. Income Taxes~~Related Charges			106
5. Leases- Lessee Accounting			107
6. Rental Product, Net			109
7. Fixed and Intangible Assets, Net			110
8. Long-Term Debt			111
9. Income Taxes			114
10. Accrued Expenses and Other Current Liabilities			~~109~~117
~~10.~~11. Fair Value Measurements			~~109~~118
~~11.~~12. Redeemable Preferred Stock			~~111~~119
~~12.~~13. Stockholders’ Equity			~~111~~
~~13.~~ ~~Share-based Compensation Plans~~			~~113~~120
14. Share-based Compensation Plans			122
15. Net Loss per Share Attributable to Common Stockholders			~~116~~124
~~15.~~16. Commitments and Contingencies			~~116~~
~~16. Subsequent Events~~			~~117~~125


		January 31,		January 31,
		2022		2021
	January 31,							January 31,
	2024						2024		2023
Assets	Assets
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	247.6	$	95.3
Restricted cash, current	Restricted cash, current	5.4		3.4
Prepaid expenses and other current assets	Prepaid expenses and other current assets	11.7		4.7
Total current assets	Total current assets	264.7		103.4
Restricted cash	Restricted cash	6.6		10.5
Rental product, net	Rental product, net	76.3		97.6
Fixed assets, net	Fixed assets, net	57.2		64.7
Intangible assets, net	Intangible assets, net	6.4		7.8
Operating lease right-of-use assets	Operating lease right-of-use assets	31.5		34.9
Other assets	Other assets	4.8		1.8
Total assets	Total assets	$	447.5	$	320.7
Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit)
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	15.9	$	7.2
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	30.0		14.1
Deferred revenue	Deferred revenue	10.4		5.6
Customer credit liabilities	Customer credit liabilities	6.9		7.0
Operating lease liabilities	Operating lease liabilities	5.6		6.7
Total current liabilities	Total current liabilities	68.8		40.6
Long-term debt, net	Long-term debt, net	260.8		355.1
Operating lease liabilities	Operating lease liabilities	46.4		51.5
Warrant liability		—		11.8
Other liabilities	Other liabilities	0.4		0.3
Total liabilities	Total liabilities	376.4		459.3
Commitments and Contingencies (Note 15)		0		0
Redeemable preferred stock, $0.001 par value; 0 and 35,236,646 shares authorized as of January 31, 2022 and 2021, respectively; 0 and 31,137,921 shares issued and outstanding as of January 31, 2022 and 2021, respectively; liquidation preference of $0.0 million and $393.7 million as of January 31, 2022 and 2021, respectively		—		388.1
Commitments and Contingencies (Note 16)						Commitments and Contingencies (Note 16)
Stockholders’ equity (deficit)	Stockholders’ equity (deficit)
Common stock, $0.001 par value; 0 and 60,000,000 shares authorized as of January 31, 2022 and 2021, respectively; 0 and 10,456,521 shares issued and outstanding as of January 31, 2022 and 2021, respectively		—		—
Class A common stock, $0.001 par value; 300,000,000 and 0 shares authorized as of January 31, 2022 and 2021, respectively; 60,104,058 and 0 shares issued and outstanding as of January 31, 2022 and 2021, respectively		0.1		—
Class B common stock, $0.001 par value; 50,000,000 and 0 shares authorized as of January 31, 2022 and 2021, respectively; 2,932,739 and 0 shares issued and outstanding as of January 31, 2022 and 2021, respectively		—		—
Preferred stock, $0.001 par value; 10,000,000 and 0 shares authorized as of January 31, 2022 and 2021, respectively; 0 and 0 shares issued and outstanding as of January 31, 2022 and 2021, respectively		—		—
Class A common stock, $0.001 par value; 300,000,000 shares authorized as of January 31, 2024 and 2023; 3,390,587 and 3,097,826 shares issued and outstanding as of January 31, 2024 and 2023, respectively (1)
Class A common stock, $0.001 par value; 300,000,000 shares authorized as of January 31, 2024 and 2023; 3,390,587 and 3,097,826 shares issued and outstanding as of January 31, 2024 and 2023, respectively (1)
Class A common stock, $0.001 par value; 300,000,000 shares authorized as of January 31, 2024 and 2023; 3,390,587 and 3,097,826 shares issued and outstanding as of January 31, 2024 and 2023, respectively (1)
Class B common stock, $0.001 par value; 50,000,000 shares authorized as of January 31, 2024 and 2023; 154,928 and 153,312 shares issued and outstanding as of January 31, 2024 and 2023, respectively (1)
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of January 31, 2024 and 2023; 0 shares issued and outstanding as of January 31, 2024 and 2023
Additional paid-in capital	Additional paid-in capital	872.2		62.7
Accumulated deficit	Accumulated deficit	(801.2)		(589.4)
Total stockholders’ equity (deficit)	Total stockholders’ equity (deficit)	71.1		(526.7)
Total liabilities, redeemable preferred stock and stockholders’ equity (deficit)		$	447.5	$	320.7
Total liabilities and stockholders’ equity (deficit)


			Year Ended January 31,
			2022		2021		2020
		Years Ended January 31,									Years Ended January 31,
		2024							2024	2023		2022
Revenue:	Revenue:
Subscription and Reserve rental revenue
Subscription and Reserve rental revenue
Subscription and Reserve rental revenue	Subscription and Reserve rental revenue		$	185.8	$	135.9	$	235.4
Other revenue	Other revenue		17.5		21.6		21.5
Total revenue, net	Total revenue, net		203.3		157.5		256.9
Costs and expenses:	Costs and expenses:
Fulfillment
Fulfillment
Fulfillment	Fulfillment		61.9		53.0		118.1
Technology	Technology		45.3		37.7		40.2
Marketing	Marketing		26.5		8.1		22.9
General and administrative	General and administrative		104.4		77.2		98.9
Rental product depreciation and revenue share	Rental product depreciation and revenue share		71.7		89.0		85.2
Other depreciation and amortization	Other depreciation and amortization		19.4		23.0		21.6
Restructuring charges
Loss on asset impairment related to restructuring
Total costs and expenses	Total costs and expenses		329.2		288.0		386.9
Operating loss	Operating loss		(125.9)		(130.5)		(130.0)
Interest income / (expense), net	Interest income / (expense), net		(53.0)		(46.6)		(24.0)
Gain / (loss) on warrant liability revaluation, net	Gain / (loss) on warrant liability revaluation, net		(24.9)		0.4		—
Gain / (loss) on debt extinguishment, net	Gain / (loss) on debt extinguishment, net		(12.2)		(0.6)		—
Other income / (expense), net	Other income / (expense), net		3.9		6.2		(0.1)
Net loss before income tax benefit / (expense)	Net loss before income tax benefit / (expense)		(212.1)		(171.1)		(154.1)
Income tax benefit / (expense)	Income tax benefit / (expense)		0.3		—		0.2
Net loss	Net loss		$	(211.8)	$	(171.1)	$	(153.9)
Net loss per share attributable to common stockholders, basic and diluted			$	(8.51)	$	(15.36)	$	(14.04)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted			24,874,061		11,138,851		10,964,634
Net loss per share attributable to common stockholders, basic and diluted (1)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (1)


RENT THE RUNWAY, INC. Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity (Deficit)


		Redeemable Preferred Stock			Common Stock			Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Equity (Deficit)
		Shares	Amount		Shares	Amount
Balances as of January 31, 2019		20,891,652	$	196.7	10,100,658	$	—			$	45.4			$	(267.0)			$	(221.6)
Issuance of redeemable preferred stock		6,100,619	133.8		—	—		—				—				—
Stock issued under stock incentive plan		—	—		270,978	—		1.8								1.8
Share-based compensation expense		—	—		—	—		6.8								6.8
Adjustment to accumulated deficit, cumulative effect of ASC 606 adoption		—	—		—	—		—				2.6				2.6
Net loss		—	—		—	—		—				(153.9)				(153.9)
Balances as of January 31, 2020		26,992,271	330.5		10,371,636	—		54.0				(418.3)				(364.3)
Issuance of redeemable preferred stock		4,145,650	57.6		—	—		—				—				—
Stock issued under stock incentive plan		—	—		84,885	—		0.5				—				0.5
Share-based compensation expense		—	—		—	—		8.2				—				8.2
Net loss		—	—		—	—		—				(171.1)				(171.1)
	Redeemable Preferred Stock																			Redeemable Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total Stockholders’ Equity (Deficit)
	Shares
Balances as of January 31, 2021
Balances as of January 31, 2021
Balances as of January 31, 2021	Balances as of January 31, 2021	31,137,921	388.1		10,456,521	—		62.7				(589.4)				(526.7)
Issuance of redeemable preferred stock	Issuance of redeemable preferred stock	1,437,541	21.2		—	—		—				—				—
Conversion of redeemable preferred stock	Conversion of redeemable preferred stock	(32,575,462)	(409.3)		32,575,462	0.1		409.2				—				409.3
Stock issued under stock incentive plan	Stock issued under stock incentive plan	—	—		583,439	—		3.3				—				3.3
Stock issued as part of IPO, net of offering costs	Stock issued as part of IPO, net of offering costs	—	—		17,000,000	—		327.3				—				327.3
Issuance of warrants	Issuance of warrants	—	—		—	—		6.4				—				6.4
Exercise of warrants	Exercise of warrants	—	—		2,421,375	—		35.5				—				35.5
Reclassification of warrants	Reclassification of warrants	—	—		—	—		1.2				—				1.2
Share-based compensation expense	Share-based compensation expense	—	—		—	—		26.6				—				26.6
Net loss	Net loss	—	—		—	—		—				(211.8)				(211.8)
Balances as of January 31, 2022	Balances as of January 31, 2022	—	$	—	63,036,797	$	0.1	$	872.2			$	(801.2)			$	71.1��

Stock issued under stock incentive plan
Issuance of warrants
Share-based compensation expense
Net loss
Balances as of January 31, 2023
Stock issued under stock incentive plan
Share-based compensation expense
Net loss
Balances as of January 31, 2024


		Year Ended January 31,
		2022		2021		2020
	Years Ended January 31,									Years Ended January 31,
	2024							2024	2023		2022
OPERATING ACTIVITIES	OPERATING ACTIVITIES
Net loss
Net loss
Net loss	Net loss	$	(211.8)	$	(171.1)	$	(153.9)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:	Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Rental product depreciation and write-offs	Rental product depreciation and write-offs	45.6		55.9		61.6
Rental product depreciation and write-offs
Rental product depreciation and write-offs
Write-off of rental product sold	Write-off of rental product sold	4.7		14.0		14.0
Other depreciation and amortization	Other depreciation and amortization	19.5		24.1		21.6
Loss from lease termination and write-off of fixed and intangible assets
Loss on asset impairment related to restructuring
Proceeds from rental product sold	Proceeds from rental product sold	(12.9)		(17.9)		(19.3)
(Gain) / loss from liquidation of rental product	(Gain) / loss from liquidation of rental product	(0.6)		0.9		0.5
Accrual of paid-in-kind interest	Accrual of paid-in-kind interest	38.8		36.9		19.0
Settlement of paid-in-kind interest	Settlement of paid-in-kind interest	(6.3)		—		—
Amortization of debt discount	Amortization of debt discount	5.9		5.0		4.0
Loss on debt extinguishment	Loss on debt extinguishment	12.2		0.6		—
Share-based compensation expense	Share-based compensation expense	26.6		8.2		6.8
Remeasurement of warrant liability	Remeasurement of warrant liability	24.9		(0.4)		—
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(7.0)		0.3		(2.4)
Prepaid expenses and other current assets
Prepaid expenses and other current assets
Operating lease right-of-use assets	Operating lease right-of-use assets	3.4		(0.4)		(34.5)
Other assets	Other assets	(3.0)		1.8		(1.3)
Accounts payable, accrued expenses and other current liabilities	Accounts payable, accrued expenses and other current liabilities	18.4		(4.5)		6.0
Deferred revenue and customer credit liabilities	Deferred revenue and customer credit liabilities	4.7		(7.3)		1.5
Operating lease liabilities	Operating lease liabilities	(6.2)		11.4		46.8
Other liabilities	Other liabilities	0.8		(0.3)		(8.0)
Net cash (used in) provided by operating activities	Net cash (used in) provided by operating activities	(42.3)		(42.8)		(37.6)
INVESTING ACTIVITIES	INVESTING ACTIVITIES
Purchases of rental product	Purchases of rental product	(30.8)		(54.9)		(117.7)
Purchases of rental product
Purchases of rental product
Proceeds from liquidation of rental product	Proceeds from liquidation of rental product	5.7		2.4		3.6
Proceeds from sale of rental product	Proceeds from sale of rental product	12.9		17.9		19.3
Purchases of fixed and intangible assets	Purchases of fixed and intangible assets	(10.3)		(23.8)		(43.8)
Net cash (used in) provided by investing activities	Net cash (used in) provided by investing activities	(22.5)		(58.4)		(138.6)
FINANCING ACTIVITIES	FINANCING ACTIVITIES
Proceeds from issuance of common stock upon IPO, net of offering costs	Proceeds from issuance of common stock upon IPO, net of offering costs	327.3		—		—
Proceeds from issuance of common stock upon IPO, net of offering costs
Proceeds from issuance of common stock upon IPO, net of offering costs
Proceeds from issuance of redeemable preferred stock	Proceeds from issuance of redeemable preferred stock	21.2		60.4		133.8
Proceeds from exercise of stock options under stock incentive plan	Proceeds from exercise of stock options under stock incentive plan	3.3		0.5		1.8
Proceeds from line of credit		—		15.0		86.0
Principal repayments on line of credit		—		(59.0)		(92.6)
Proceeds from long-term debt		—		155.0		50.0
Principal repayments on long-term debt	Principal repayments on long-term debt	(135.0)		—		—
Debt extinguishment costs	Debt extinguishment costs	(4.7)		—		—
Proceeds from short-term financing agreements	Proceeds from short-term financing agreements	5.0		—		—
Other financing payments	Other financing payments	(1.9)		(3.4)		(1.1)
Net cash (used in) provided by financing activities		215.2		168.5		177.9
Net increase in cash and cash equivalents and restricted cash		150.4		67.3		1.7
Net cash provided by (used in) financing activities
Net (decrease) increase in cash and cash equivalents and restricted cash
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	109.2		41.9		40.2
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	259.6	$	109.2	$	41.9


RENT THE RUNWAY, INC. Notes to Consolidated Financial Statements


~~RENT THE RUNWAY, INC.~~ ~~Notes to Consolidated Financial Statements~~


	Useful Life	Salvage Value
Apparel	3 years	20	%
Accessories	2 years	30	%


Leasehold improvements			Lesser of estimated useful life or lease term
Machinery and equipment			5 to 6 years
Furniture and fixtures			5 years
Computer hardware			3 years
Reusable packaging			1.5 years
Capitalized third-party software			3 years
Capitalized internally developed software			2 years


	Operating		Financing
Fiscal year:
2022	$	13.6	$	0.4
2023	11.6		0.3
2024	10.4		0.1
2025	9.1		0.0
2026	9.1		0.0
Thereafter	48.7		0.0
Total minimum lease payments	102.5		0.8
Imputed interest	(50.5)		(0.1)
Lease liabilities as of January 31, 2022	$	52.0	$	0.7


	Warrant Liability
Balance as of January 31, ~~2020~~2021	$	~~0.6~~11.8
Issuance of ~~warrants~~	~~11.6~~
~~Changes in estimated fair value~~	~~(0.4)~~
~~Balance as of January 31, 2021~~	~~11.8~~
~~Issuance of~~common stock warrants	0.5
Changes in estimated fair value	24.4
Exercise of warrants	(35.5)
Reclassification to equity-classified warrants	(1.2)
Balance as of January 31, 2022	$	—


	~~January 31,~~
	~~2021~~2023.
~~Valuation assumptions:~~
~~Expected dividend yield~~	—	%
~~Expected volatility~~	~~87.68~~	%
~~Expected term (in years)~~	~~6.75~~
~~Risk-free interest rate~~	~~0.79~~	%


	January 31, 2022
Outstanding Warrants	Date Issued	Number of Shares	Class of Shares	Exercise Price		Fair Value at Issuance
Equity classified:
TriplePoint	Nov-16	82,891	Common	$	7.54	$	0.3
TriplePoint	Jun-17	18,236	Common	7.54		0.1
TriplePoint	Sep-17	14,920	Common	7.54		0.1
TriplePoint	Jan-18	16,578	Common	7.54		0.1
TriplePoint	Apr-18	16,578	Common	7.54		0.1
TriplePoint	Nov-15	35,215	Common	17.04		0.2
TriplePoint	Jun-16	28,172	Common	17.04		0.2
TriplePoint	Sep-16	24,650	Common	17.04		0.1
Double Helix (Temasek)	Jul-18	730,000	Common	27.40		1.3
Double Helix (Temasek)	Oct-21	394,343	Common	21.00		5.3
		1,361,583				7.8


	January 31, 2021
Outstanding Warrants	Date Issued	Number of Shares	Class of Shares	Exercise Price		Fair Value at Issuance
Equity classified:
TriplePoint	Nov-16	82,891	Common	$	7.54	$	0.3
TriplePoint	Jun-17	18,236	Common	7.54		0.1
TriplePoint	Sep-17	14,920	Common	7.54		0.1
TriplePoint	Jan-18	16,578	Common	7.54		0.1
TriplePoint	Apr-18	16,578	Common	7.54		0.1
Double Helix (Temasek)	Jul-18	730,000	Common	0.01		9.0
Double Helix (Temasek)	Jul-18	730,000	Common	27.40		1.3
		1,609,203				$	11.0
Liability classified:
TriplePoint	Nov-15	35,215	Series D	$	17.04	$	0.2
TriplePoint	Jun-16	28,172	Series D	17.04		0.2
TriplePoint	Sep-16	24,650	Series D	17.04		0.1
10 Jay	Oct-20	76,627	Series G	14.74		—
Ares	Oct-20	1,651,701	Common	0.01		11.6
		1,816,365				$	12.1


	Year Ended January 31,
	2022
Valuation assumptions:
Expected dividend yield	—	%
Expected volatility	68.26	%
Expected term (in years)	6.00
Risk-free interest rate	1.02	%


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contract Term (in years)	Aggregate Intrinsic Value
Balances as of January 31, 2021	6,060,107	$	6.76	6.45	$	3.7
Granted	4,556,962	8.04
Exercised	(546,934)	6.34
Forfeited	(599,965)	7.61
Balances as of January 31, 2022	9,470,170	$	7.33	7.17	$	2.1
Exercisable as of January 31, 2022	4,291,573	$	6.68	5.16	$	2.1


	Number of Shares	Weighted Average Grant-Date Fair Value per Share
Unvested and outstanding as of January 31, 2021	1,509,601	$	12.17
Granted	1,184,465	9.79
Exercised	(50,883)	17.25
Forfeited	(214,609)	8.32
Unvested and outstanding as of January 31, 2022	2,428,574	$	11.32


	RENT THE RUNWAY, INC.

Date: April ~~14, 2022~~11, 2024	By:	/s/ Jennifer Y. Hyman
		Jennifer Y. Hyman
		Chief Executive Officer