REAL - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to the RealReal Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Caitlin Howe, Senior Vice President of Finance. Please go ahead.

Caitlin Howe

operator. you, Thank

Financial to June today Koryl, results the and for and Joining XXXX, discuss our ended Chief Levesque; Rati XX, Operating John Ajay Chief period Gopal. Chief me Officer; our Officer, Executive President Officer;

like begin, which that statements, during remind we and known unknown we Before uncertainties. to make call, will you would I forward-looking involve today's risks and

materially Our those suggested may statements. differ from results actual such in

operating more information quarterly that about these in and recent uncertainties most factors our XX-Q. reports subsequent find risks, could other Form affect can results Form and company's the You XX-K on

presentation press Today's financial historical measures, certain release. measures the financial historical and provided have measures, GAAP reconciliations to will both include also we most which earnings forward-looking, our for comparable non-GAAP in

to a press both addition our the today, earlier available issued website. Investor which Relations letter we of release, shareholder are on earnings In

like now of would John Officer over call Executive I Chief turn Koryl, to RealReal. to the the

John Koryl

and Thanks, Caitlin, earnings call. welcome to our

financial and with accelerated reported for quarter growth double-digit and we QX GMV strong half growth. revenue the of We another year-over-year results Today, XXXX. delivered first

consignment compared the period XXXX. on on the trailing XX% buyers in grew quarter. resulted consignment same revenue focus Our in year-over-year increase second basis X-month a to Active a the X% in business in

year-over-year our to $XX of million second improved addition in was In growth, In EBITDA. million, we consecutive adjusted an improvement and of bottom the negative quarter results. line improvement significantly quarter, XXth $X.X adjusted EBITDA the

$XX on strategic adjusted XXXX, we our year. to bottom the the first We us resale. of the of In this to the and positions at resilience revenue rate. revenue business In of expanding by by a the returned XXXX, dollars flow market capitalize luxury growth the success highlights we for line believe $XX million million to initiatives, EBITDA demonstrates our model prior compared topline incremental to improved and half and grew high our

and profitable of we together, encounter stores expanding sustained ahead, X engine chapter sales, work these focused a our margins. When on the are believe growth multichannel our marketing and growth. delivering sellers We frictionless, next experience. are I As our areas look the powering

We our refine identify new to will attractive approach stores. for markets continue and

growth opportunities supply see to new from channels. drive also incremental We

growth, operational profitability. can luxury million leverage realizing efficiencies thanks to of XX we AI, addition on advancements XX In in are drive years' We to recent to data worth items.

to EBITDA are the We updated measured approach and guidance. EBITDA investments Today, now paying we provided year our our year and continuous improvement to range, is midpoint and off. positive full guiding increased we XXXX QX full adjusted year adjusted of Our full guidance XXXX. for

excited I our business. momentum am truly in about the

luxury we are drive As marketplace service to profitability. remain goods, and our on core the strengths. business for leading authenticated We to growth, playing exceptional operational excellence focused

for the open questions. that, call With let's

Operator

[Operator Rick Instructions] from question James. Raymond from Patel Our today first is

Joshua Reiss

This decline but looking improving. hoping guidance. a get of Josh bottom bit bit for a filling we're a more the at quarter-over-quarter, just is Reiss to on understand that on in Rick. I is I line GMV, color was

clarity on more moving hoping So the bit I there? just to was pieces a get

Ajay Gopal

Thanks for as things a There is context the additional of are our question. Ajay. couple This guidance. worth behind highlighting

GMV. So talk let's about

volume as second to piece accelerate we our our half. the half growth this QX. And into in We business our versus GMV of first expect in seasonal is the head

a by To preference prices on pressure spending. some today. driven in outlook second the potential prudent consumer be as seeing Your in I question, offset would prior down average by per resulted being AOE This discounted versus QX, in about order, We compression was clear, a X%. selling price, modest increase we're products. only late slowdown more half and towards saw comparable This being characterize which In in into started flat continued a QX items in ASP, July. was has year. our our

for out on play half view the going how So this to of dynamic second rest the our is balanced guidance of in a reflects XXXX. year the

confidence Moving a guidance with to ability the increased our bottom to our line, your question EBITDA. in year on would positive I adjusted adjusted deliver an reflects EBITDA. say

confidence in EBITDA resilience our above X in our contribute theme the that's strong resilience, stems also to and expanding I'd half. on some model It's strength. to the factors call out business So breakeven that spending. worth mitigate the ability first XXXX. in from stems small This from It the -- spending performance of of its shifts consumer

Firstly, our model. consignment

means sellers. in any don't downside share or share a this any full in with price. this sorry, we we not we feel upside that change retailer, impact So the our Unlike prices -- or of means upside downside do in a

confidence the us in line. that gives bottom more So

is independent The a architecture. take second any protect our us I rate point really would This margins. to price helps that are of down. thing when prices buffer helps built-in go our costs gives and It cover

a serve wide of in category any we marketplace. consumer in demand. full that, a meet assortment And offer And more range highlight we are and a would resilient a categories we shifts This and products brands. us them luxury doing helps finally, span that I customer prices, full how of breadth

So guidance hopefully, for that our what's gives the context in the you half year. second of behind

Joshua Reiss

second the in luck of half. Best

Operator

is Capital call Ashley KeyBanc Markets. next from Our from Owens

Chandana Naga Madaka

for Ashley Madaka on today. It's Chandana

and kind what's spending your I maybe landscape. chatter open mentioned around So a was on curious I maybe There's the of trends bit little thoughts about the you what a but thoughts any know maybe my maybe about the just was luxury kind platform? customer, you're lot of slowdown, customer around question of working more space. emerging just like noting? aspirational

Rati Levesque

question. you Rati. This the Thank is for Yes.

this But of able things. the for more bit volume. or a couple sensitivity to our quarter with consumer. were mentioned it that up consumer will different as little price last in of make And I well, health our a say So we saw I

supply. through is sell I what more that we're business. we're a brought that So in by mean able supply-constrained and supply, to We

will buyers buying our it Active higher year-over-year. cosigners. of up to one QX value when growing So buyers in at year-over-year, categories up of driven jewelry, make look also I out are able that top again, X% in I our volume. for say

of So seeing we're our sensitivity optimism this there sweat like don't there's lot well Ajay even price as when kind margin. mentioned, of we a

kind and share we our So of sell, ways. that the look can we in with most seller to price at ASP,

the So again, kind business, play feeling mostly our We're okay there consumer green value we're that because when of seeing. the and healthy look sure of the making at shoots really pushing we how and that primary it what on primary getting so the the market. what is understand was in educating what people they're market, the and in priced price is value them much

make to for available supply that, that and and consumer. is focus on sure continuing that, So we'll continue to do our really

Operator

Our next Marvin Fong question from comes with BTIG.

Marvin Fong

implied past start we up guidance. and fourth like on were of to wasn't growth. with in I around if on maybe you're of the And quarter couple years, at at the guiding Obviously, inference to GMV able XX% quarter-over-quarter. it if draw deliver an midpoint is something large increase. just guidance go of Just sequential back looks that as what time, the to the can look of further a kind kind certainly, sequential kind you it you But of

fourth Any of thought additional the quarter as to any great. of kind just baking in your a clue your would kind on seasonal in constructed be it of you Or you incremental expect do weakness consumer? us color are normal kind of you pattern? guidance be could as well, you So

Ajay Gopal

question, the for Thanks Marvin.

then with Rati seeing. and start she's me what to Let invite I'll weigh in

on So a we seasonal see usual are business QX. pattern do pattern, QX usual we QX, going increase. significant the expecting seasonal how during our to

year-on-year. the QX. We rate, good of expect growth our midpoint we imply we today at look versus and that you in see versus where If as we that guidance grow would be to acceleration to X% where our expect are QX

will more what color -- confidence. add to invite I Rati to gives add think us I

Rati Levesque

mean, has is again, seeing seasonal top point, ways coming we What And we the of see I that you in down confidence look then back some like been that, many healthy. the retailers. by on quite category, saw that confidence it Right. in QX consignor up. then half many other and when or more amount price of like year, by that and us summer supply mentioned, growth, gives we the double Where trends saw at last story pick same in to of HX the QX we're do that story Ajay, by and we the funnel.

win back of So the we're half to place in year. good a in the

Marvin Fong

expect Got in the revenue, quarter? in it kind fall it. to we on this kind to a quarters? it to quarter-over-quarter. first Great. direct And pretty step where Is of level more nice was back of should the Or coming right up expect the

Ajay Gopal

I take question. Yes, that can

revenue a a foundation expect margins, within I going QX high stream. rate gone the make our past. on in in go-forward it through us staying be. there would to would was I your X% starting and stream a this think perform business end We for us the were sort we right we that, revenue, that but defocusing forward. would of The was it point still XX% to basis. the be. going the and good attention at would that how that to to improvement a on seen we what the think basis, we where we've So for a versus of this margin period place, the see revenue within now also how of gives expect really be a We were expect draw you mid-teens. it's healthy where The which revenue QX it it's range total to the to would direct notable we've point go-forward is on is -- in

Operator

Thank you.

at for to We would so back turn Koryl closing are questions to I showing it no remarks. further time, like this John

John Koryl

joining for you us today. Thank

to give in employees Before far. XXXX our thank so exceptional a execution want all sincere I the call, you closing of for their to

thank the you. of We mission fashion XX join than make our also more Thank to on sustainable. members they extend and to our luxury us want as million more life

Operator

the Thank you, disconnect. today's conclude conference. you in now for This does program, participating everyone, and may

The RealReal, Inc. (REAL) 6 Aug 242024 Q2 Earnings call transcript