REAL - Earnings call transcript Q4 2024

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Operator

Good day, and thank you for standing by. Welcome to The RealReal Fourth Quarter 2024 Financial Results Conference Call. [Operator Instructions]. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Howe. conference like speaker to now Caitlin today, would hand over the your I go Please ahead.

Caitlin Howe

and and to period XXXX Officer ended today December Rati Joining discuss XX, are our Chief Ajay Financial Officer, Chief results for President, Gopal. Levesque; Executive

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

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

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

will presentation also and historical non-GAAP looking. Today's financial measures, both include certain forward

non-GAAP website. call over have like is release Officer the measures the which to GAAP I to RealReal. on turn Levesque, earnings Rati We of historical most Investor our would The press reconciliations available provided now Relations financial Executive Chief measures for to comparable in our

Rati Levesque

RealReal's everyone, Thank and you, afternoon, XXXX Good Full Caitlin. to and Fourth Conference Year Quarter Earnings Call. The welcome

XXXX. EBITDA am report cash year. We accelerated in delivered for strong We full results. year, year the milestones through adjusted free the growth revenue to I financial in important growth positive in XX% pleased reached and QX QX. positive and Today, full We flow culminating

with find the consignors more relationships We to at that we Customers again come confident of RealReal luxury position The experts our to of luxury trust. founded or again buyers monetize on intersection in resale. been pieces the and and stronger relevant. closet, The has back is and a are and value. built never their This RealReal kind to one

guidance operational to strength, a engagement range from for trends, enabled our adjusted position achieve us XXXX excellence supply EBITDA buyer healthy above and exited QX. We of strong GMV and

engagement. also delivered retention including on positive several results KPIs, and customer conversion, We

like The to details XXXX important quarter later achievements notable the highlight fourth would as more point and financial a results marked on in RealReal. provide for call. will year full I few Ajay our an for the inflection

We business. cash improved delivered a to our million resulting of XXXX year billion, growth. revenue full free year-over-year. GMV year-over-year. the positive adjusted also profitable profitable trailing was mid- flow year, for versus high-value success cash in marked X% supply. up as last a first return of up $XXX flow. year with first were our EBITDA XX% full on XX-month And in buyers Consignment $XX particular active up and was year, basis unlocking a Free X%

foundational return our of implemented. core focus with business sharpened economics. improved our result the we've changes are We've achievements on and These to growth unit

our Today, ways we're strategic through on progress growth supply the operational driving service. I'll through X efficiencies and unlocking making our over obsessing talk pillars: playbook,

start playbook. the Let's growth with

our strategic playbook of our The which is differentiator. is growth a first component team, sales

a our As our sales maximize with up consignors our to is who team directly supply. trust of reminder, made work luxury build and managers

driving of than Over the goal team's the optimizing supply, and with better spent on our aligned sales structure the units. we value elevating our focusing team compensation our profitable overall time of experience. incentive rather team's course XXXX, We company

with to sales alignment team lower than years. over compensation manager, sales now X attrition luxury The and experience elevating value supply more for have retention per team of our Better resulted half RealReal in the more and compared higher year. employee has last been Today,

sales value to generated relationships experience. results per Notably, higher We year. through rep better the expect was with rating drive the changes up roughly sellers, prior XXXX compared in a and XX% these approval to seller deeper

technology drive best-in-class service efficiency. team's sales to using our improve further will we XXXX, In while

in Tools likely allow leverages initiatives. to AI sales very clients help to luxury any data which Smartsales our customer luxury planning expand to Early data most managers time. encouraging, service assess external broader smart and excited are This we are We initiative results have rollout consignors consign and initiative are to our a been improve and of more XXXX. managers this efficiency. like at

playbook growth our marketing. of piece is second The

marketing and retention. brand and unlock into channel translates driving and target, consigners. relevance by more engage to our brand heat refined customer acquisition We've supply that better investments teams Our high-value marketing and acquire with

Our targeting. marketing precision technology that increase in team has adopted our new tools

Z evolved attractive optimize half skews throughout that an fashion approach of diverse targeting seeing About We our group We're or have loyal, a we'll our consignors with focused. acquisition, and per millennials year. us selling to year. strong affluent to results continue multiple in consignor Gen and our demographic. and younger, they're are times It's early the

XXXX, marketing and trust authenticity. highlighted our brand

We channels, buzz generating brands. for continue be to our active on social

the video holiday elevated take during increased a our For expertise followers, and on and past journey bad authentication our of engaging traffic and sign-ups. new season, fashion drove example, member more

final The and third playbook stores. piece growth of is our

affluent As strategy, create we our generate experience consignors. for and residential part areas our store a to supply drive in awareness. a of frictionless position stores Stores neighborhood

these In and XXXX, stores excited off nearly added locations. be consignors great start a and to to Houston. QX, new both our We're through we to In fleet markets acquired our in retail new of part XX% communities. are X a were in of Miami

the strong in are playbook in the metrics We top showing seeing momentum line. supply up growth our and benefits from

pillar, strategic our to next operational efficiency. Moving

drive a enable in and accelerate our profitability. reminder, data to to used to tech capabilities recent path We've capabilities AI. us benefit from efficiency our rich and these advancements As

processes increased processing automation count launched [ in launching when head arrives day AI that the improvements teams our XXXX, time. happen leverage X driving an took to time Athena time item our Through Cost hold growth. we process helping initiative, while the efficiently, are kept authentication to XXXX, and steady in units on we quickly addressing ] center full in site. In over our our productivity, from the of cutting it's

pre-populate aims quicker item time and to efficiencies. More attributes. returns, our optimize and accuracy to image attribution item customer improved getting enhancement and accurate data leverages higher search, use ] This just results authenticate to capabilities our drive AI Athena launch satisfaction, lower to sophisticated [ better assets and workflow are in key we started. and pricing significant recognition

of end almost ] authentication we of items expect half into the to centers. the the [ our touch By coming year, Athena

This high over resale high high clear in third in to service. The obsessing RealReal From pillar, has strategic our day The to engagement experience luxury is NPS, to bringing is of RealReal's Turning this brand. obsess leadership At our were trust, a resulted as a luxury part over key X, service we resale important is category. focus a that platform.

trust build marketplace and authenticity. service, luxury modern a are We on

deep this a community of needs. by XX evolving done connection their with to fostering and to platform our members million their have our meet listening We feedback

we sharing, a members ability launched gives to QX, our For and the buyers, followers. feature their favorite share friends our family, obsession that their items in with

to to use the a connection others as way this with and their engage We deepen to our are members RealReal. their style, feature personal excited express inspire with see our brand

obsess we through on convenience, process, service the over consignors, reducing speed. consignment in friction price balancing our For and their needs

market RealReal we XX items items Nearly the of price that will our the to bear. known And work all The for for sell-through. ensure days. sell highest within is rapid

approach XX% building our end this. improve of efforts trust AI-driven has in units our central pricing the element Our sellers. XXXX, transparency, with were engine to total our helps pricing At been of us Its important our an using pricing launched do to further data-driven algorithm.

and Obsessing will growth our over In playbook aligned the shape to be key have business. a our service pillars of and focus company closing, continue strategic working. our differentiator is evolution our

We are laser-focused on supply. profitable unlocking

call ahead The for and to is results to As resell continues discuss the RealReal in the thought and With the to I'll opportunity Ajay financial positioned that, and momentum, gain as luxury turn well is significant there resale. outlook XXXX. leader over market

Ajay Gopal

you, RealReal time It's exciting Thank resale. for luxury Rati. an and The

and the Rati continue market is the leader, positioned we As share. RealReal outsized The grow take expect well mentioned, to market as to resale to

more of the to and Over X company. billion exciting course we've how completed significantly the stronger and to it's as see profitable years, has last GMV business strategic a in returned a $X.X the refocus

defining year X-year of $XXX XXXX basis. an a marked the adjusted moments an for $XX increase The of positive RealReal. achieved and full year, million on million increase prior the for several We EBITDA versus

highlighting Free operating were positive the year, both full our for flow of power business cash the cash flow and scale. we as model

trend by active gross For well basis XX-month continue order through reaching average and $XXX our take margin consignment we values QX. rate on buyers and XXX to grew expanded in $XXX, year, high an of above points trailing We the optimizing operational efficiencies. basis, a all-time driving

GMV range. supply. through last in was increased will Starting with GMV of results unlocking Today, year, XXXX. outlook discuss XXXX for million and and financial I high-value QX fourth versus by XX% driven quarter. our mid- the exceeding our guidance $XXX walk you success our outperformance

an of high-value to XXX,XXX. Revenue X% at XX% and growth, X% quarter in the Active last million increase basis returns X-month volume up increased a XX-month $XXX trailing basis. in to on consignment up from Active XXX,XXX, increased profit direct buyers on buyers a trailing benefiting versus year revenue. higher

$XX basis year. Fourth the gross million gross flat $XXX million improved versus increased quarter points $XXX margin profit year-over-year, of million XX.X%, Fourth were operating prior XX quarter which year-over-year. of of expenses resulting in

of leveraged points. operating basis percent expenses a As over X,XXX total revenue,

Adjusted by operating expenses in $XX of EBITDA year. efficiency charge in million $X.X points X.X% Excluding total $X operations. XXXX, compensation a basis and of million stock-based revenue for prior and versus restructuring driven million XXX increased efforts or marketing leveraged

flow in flow million of for the free $XX $XX in resulting cash million. generated cash operating We quarter,

we cash very as are generation model with business the pleased scale. that We delivers our

conversion This typical inventory a our pay unlike after and We our season purchase working business. a we As flows cash we platform. of item as grow. reminder, capital for to creates on cash consignors favorable an sells a consignment the retailer, benefit don't our cycle ahead

our down in GMV grew better $X.XX Moving and XXXX. versus Full baseline of and million versus year. initiated the prior year by full a X% to late Consignment was and from respectively, X% benefiting XX% we as billion was up revenues Revenue direct results. rate that for XXXX year $XXX GMV increased of growth our changes the and established XX%, take driven year prior shipping business. for XX% in revenue year

the mix year to increased refining take past Full basis gross basis operational our XXXX. margin points XXX Gross XX.X% structure, gross improved points $XX margins our margin of on increased over profit progress efficiencies. From full versus year-over-year. We've product XXXX, tremendous X,XXX X rate driving by made of our over XXXX million and we years. gross million overhauling year $XXX

Full year million $XX operating expenses declined of million $XXX year-over-year.

expenses percent revenue, X,XXX nearly a points total operating basis leveraged of in As XXXX.

and expense XXXX XXX points. basis full $XX compensation charges, stock-based by restructuring million year leveraged operating in Excluding

cash translated profitability We delivering million in at in a increase of positive cash million adjusted of flow, and up to and achieved year XXXX. positive operating million year-over-year $X with our prior million a flow in first $XX cash full million year. million, equivalents significant $XXX restricted the XXXX, million, cash, cash. We up milestone ended free $XXX $XX $XX This versus versus year EBITDA in $X.X improvement

Turning now to XXXX.

on Rati talk unlocking heard supply. about You profitable our focus

our is making our that $XXX Our billion growth resale unlocking results in reinforce confidence XXXX in playbook the U.S. we progress the and are TAM in working, luxury

double-digit strategy believe We high low the growth over medium our deliver can term. single-digit to

projecting full increasing guidance. billion year $X.XX year, billion $X.XX are the for midpoint GM at of X% We to our the of

and and our over Revenue between million year-over-year is expectations million, expected around $XXX midpoint term. to growth X% up medium $XXX the with aligned be

expense to a year. year, the and stable expected compared by margin full quarter similar seasonality relatively the is to be we Operating last For take expect prior also year. rate to gross

by is adjusted EBITDA of points in million of from the XXX EBITDA margin operating delivering flow-through $XX range continued expected expense XXX driven top to strong and be expansion Adjusted line between and growth $XX year-over-year basis to million, leverage.

are X% year. of expected the to to for expenditures roughly be total revenue X% Capital full

of incentive deployment half be timing free flow to payments, we cash back operating of cash of due project expect the Regarding flow to rated. spend, and timing therefore, cadence and

midpoint of $XXX the of growth our represents year to outlook is prior million, range $XXX X% million expected to our in to at guidance. be first for Moving versus which the quarter. the GMV

is both to to $XXX growth the growth and million expected in First million. business. of last year This guidance, $XXX of the our midpoint XX% quarter direct driven versus at be consignment the revenue range in reflects by

quarter in which of the reminder, less X a approximately our X in As revenue headwind results first a GMV and growth so of leap XXXX point day was XXXX, a for quarter. year, has

expected is million $X.X EBITDA to and quarter First between $X adjusted be million.

our continue made improving path profitability, we've to structure. As we progress our on on capital

flexibility XXXX. million capturing XXXX February or about we balance on believe $XXX We million. price new of strategic this due transaction the a million we We're right pillars. Through between $XX capital debt. we enhances us debt indebtedness total structure exchanging continue On XX, this by convertible transaction, notes XXXX announced and transaction our excited strategic our our conversion against and $XXX in as of strikes a reduced our discount this convertible how notes our gives transaction executing

driving closing, playbook, service free reaching and growth Q&A. Operator? back turn targets milestones In focus unlocking on With important were supply cash team these I'd to relentless positive call to important operational we like positive on efficiency XXXX. to over over able operator year: the through the these why congratulate to profitable obsessing begin will during our are the and that, adjusted in Their I our EBITDA growth, meet flow. financial

Operator

Ike line the [Operator our Instructions] Fargo. Boruchow with And from question Wells comes first of

Irwin Boruchow

of couple Ajay. questions for results. Congrats A on maybe the

Sorry if it. I missed

give cash a on an flow and guide? for did cash this Just based free -- operating year number the you flow

plan second it's X% getting beyond? we the should marketing and the Are dollars that? GMV quarter that the the spend, the starting gaining to quarter. be into drive are it's marketing -- in the it -- you're better accelerate because first would to How clearly marketing ROI What's about engine think an get And on on we growth. question think we as was growing, up planning so I you're

Ajay Gopal

for Ike. Thanks the question,

We feel didn't the EBITDA QX close to on million was about had and translated in $X flow, To on good I XXXX. operating of cash million. your $XX results that say would adjusted million. any flow for first explicit positive That in flow. guidance free cash question cash cash and the $X flows we give to we really against that year

any from So but would metrics to cash flow-through have to on those trends in specific we expect adjusted don't these guidance great EBITDA continue, flow down 'XX. metrics. We

benefit. yes, like where leverage the QX, we at had for in leverage on we're year, basis we our had now. in seeing But then marketing, We marketing, marketing points spend. good a And -- was marketing. on It XXX of it's actually, right

at playbook as for what marketing, higher If QX continue unlocking patterns, in what QX, go we'll as balance we the being invest spend look you'll it sales, in revenue, invest between our of a stores you was about what than marketing notice we look was percentage supply. that we seasonal and a that slightly in and we to in at growth how

the we're there are social We're that probably us underrepresented were say scenes, where productivity is marketing. in I would past. behind things we in channels into investing back and So think taking reinvesting on things giving that stronger the like other and it ROIs I and

Irwin Boruchow

And more Got follow-up. it. just one then

and between relationship take the rate Just AOV.

economics expecting more expect So it you're to from continue we flatten the sounds Should to rate, take you're kind like increase of given of to AOV getting? getting value items as sellers out that are kind here. your higher

Ajay Gopal

question. Great Yes.

business. We growth. points us cards. a which and -- So rate our a between really X The and it as was is rate AOV contributed came take AOV of $XXX for per order, by high in GMV dictated our about was point QX relationship in at

look So have our at higher the take we if commission keep reduction we as of a structure, you in items. rate people amount value sell do

they percent will a of an continue the obviously did, saw kind are up coming transactions. relationship as take as see when on effective much you basis, AOVs higher in that QX but as jump in sequential like So dollars do -- those rate you down,

in past. forward. really with take be that done the rate and relatively the So is rate I means structure And changes made stable expect that that all to lapping would what our we to going our take we're

I around it think point to onwards, keep the we'll going this edges, optimize largely stable but going we're forward. from

Operator

is question with Capital next Our come going of line Bobby Brooks Northland to from the Markets.

Robert Brooks

that consignors. your could high supply. start, sense I really driving first one growth perspective wanted and a what Obviously, going to benefits give current a of evenly to it of will balanced But of is at forward? is new just have level, mosaic between us maybe be approach you really supply a you your

and what the come rest the through kind how one was of your rest XX%, mix the of -- of interesting I remarks you new was things XX% said came of of the do that that consignors of that. the in think the through about said really Maybe Rati prepared channel? Just the about they retail. curious

Rati Levesque

Thanks, Bobby. Yes. for Thanks the question.

bringing we're that retail for marketing, supply together, really to and sellers that targeting before heard past, sales seller. our amount now, good you've and seller, sure about seller, across creating or were the growth in high-value looking a That's objective we've that talk frictionless So much unlocking high-value that experience and number But mid- we right, gotten there. profitable making at sure coming that making that our right? better one we're seller. whereas that's and to supply, in points, all price also it's So mid- right the at us

Yes, come and right, XX% from retail. our sellers new do you're of

being see X unit from on to selling the basis also We coming price Xx higher average retail. a

So we're excited started believe we're we here. just because getting

medium loyalty to we're playbook more consignor, spend growth are, in predictive Meeting mid- after, sellers purposeful the incremental to being to that, is more So high-value that in and work. thinking the about starting going how again, and the about where our high really brand. really marketing -- being more creating they

trust up. are Our metrics also

side, the So thinking And about smart again, funnel. AI the leveraging on sales. the through top sales of

have X half sales years. are of team Over retention You luxury more me really our numbers heard managers here now that. or talk through good. The been

room there's go in and So program affiliate and partnerships. much so even the -- to

excited the billion our pretty about constraint we'll in as TAM billion chip closets to no There's $XX and we're Bobby, but this, that $XXX trapped to say heard opportunity. to gets people's you've continue added the me that annually. is growth. team So away And, -- a here,

So going way continue the to to we're shop. change people

Robert Brooks

It's market one that off question sure. average stores selling I you that Yes. Xx wanted higher. Or X right? to huge I Did that right? of was into. clarifying For price understanding a are hear retail I in just from said is the coming tapping guys am you that

Rati Levesque

Yes. they're That's the a consignment meeting And watchmaker, that is I we handbag when LCOs. with luxury mean them what office, -- gemologist, a And Bobby. a a with in by right, meeting they're call authenticator. luxury

items right, those higher, they're handbags, So their much a pair usually consigning that's ready-to-wear or of where item. and watches, jewelry, are shoes than

important us. that that new, there, also It's they expert. And through it's retail there that's so goes can with trust is meet that to Bobby, the to building but and space consignors why, and so with our value comes disrupting back

Robert Brooks

for But sense in in pretty And a last and XQ holiday stepping line is sequential given Yes, makes in. to nice buyers active me That that's with we're in shoppers maybe me. X quarter. how for step-up seasonality with just sure. perfect then one saw the first your -- weeks

of just all I more of you about a like that the give gained in curious the And you those platform? be so the fourth you bit was kind have quarter, that. sticky or customers updates them given seen improvements customers those curious, have kind new to new Just and

Rati Levesque

Yes.

the I We're in buyers So our right? I quite value. consumer seeing fine going where base, is talking sticky Bobby, be as in and you're seeing seller is buyer quite jewelry, think that. You average it general, order there. watches, engaged And about handbags, our health I quite think see you're as resilient think well we're on

more One $X,XXX of that or XX% up the is into year-over-year. buyers stats I'm spending is

intersection more the the sure cost from what which our of play people primary value items and -- educating So luxury making value on these us and educating what that becomes cost and on really getting here, just between relevant. people in they're kind the market is and value them

general we in are that to sticky are buyers the So quite and engaged resilient. happy highly see and right now

Operator

line And with our next question of is UBS. from Sole going to the come Jay

Jay Sole

money you've of in time more efficient sales And many the invested a sounds Rati, was but in XX% they things like have were prepared not just you was that that like it remarks, also been of resources lot which essentially to and one said interesting your interesting the team sales than help team. the before.

mentioned You number. the retention

you like started because productivity If most from of the yet? the the effective? organization, what's all between can sales you Or possibility difference about just the like as presumably salespeople really talking gain And the a it forward? I gains think salespeople to how sort experienced as what's people is continue initiatives going ask team the kind here? getting are newer are efficient drive and incremental aren't there who if different that of salespeople we twice Xx from about much and as within that these Like will XX%, you be these up effective, was the

Rati Levesque

This this played hasn't that as entire think Yes. The iterated well. I another to see scaled the place even earlier last org, thing and starting is structure Thanks, started to comp this just with it Jay. out right? and one fruits is been ways tested, where -- small we're We year. the we're of We that in getting year.

So just supply yes, started. per seeing XX% we rep, year-over-year are getting more

Our million highest $XX bring in annually. plus reps

So group units focusing an all go that reason sorry, again quantity just the can't awesome value what in quality the we and build work who a the supply our talented on of or paying more of with them just people relationships we really do way. is to hire supply. no They're hard of big We off versus in of core why direction just there's and that even -- consignor.

Jay Sole

what like you And of can versus forecast you. think are little bit, it. you about break you it to in forecasting? growth terms Ajay, expect If Got just QX, like GMV, down how one that for the maybe, units pricing, we be for a

Ajay Gopal

for Jay. the question, Thanks Yes.

strong into and that we're We revenue strength this year. QX. with XX%, into up had closed XX%, coming GMV through carry QX seeing we momentum So up

our between is would on for exit be up it QX. for quite guidance XX%, QX Our from comparable, which to XX%, midpoint to to revenue of say, is rate X% I so

year a leap about impact that the plays point about of talk into pressure. me heard You

QX. we factoring really good what to all feel in, in that guided about we've pretty So

Operator

with our of is And Markets. come from Owens to question the next going Capital Ashley KeyBanc line

Ashley Owens

I So bucket. the wanted really SG&A just quickly, to on touch

you So talked little think the margins on as a marketing bit well. gross XXXX, the you mentioned know improvement moving as there, of continued side and the about have I into drivers stable

remainder relative So mindful the SG&A the buckets? within areas you we when Are the the there leverage how should should most specific fine-tuning we models? of of think about that where see be our opportunity

Ajay Gopal

for Thanks we way the us Yes. a of good about X/X SG&A I source question, it -- would it about Ashley. We more through investment it's fixed X/X nature is leveraged that the XXXX. fixed sort for in of to semi-fixed. break in The was as down is about XXX basis went bucket, of of points or variable, year.

the people side, reps out about you more we're primarily targeting our be you're are that and rollout looking in would heard consignors gains of make which sales. interested the our We're Rati AI-driven selling. On really to allows out they mechanism efficiency sales. at effectively to when smart excited an productive talk that -- about us sales variable targeting seeing targeting that reaching is And initiatives, in the

be So us forward. that of productivity a will source going for continue to

grow functions. base, the well and going and from side, leverage continue then in on base as forward. feel we as we we to the is technology G&A classic mostly which about our good will that as the see bucket of really And G&A cost And cost fixed product

Ashley Owens

year as single X pace right this then or the housekeeping openings to if about And number? the still for quick we of Great. store think well. low should just is X How digits Okay. stores

Rati Levesque

stores. Yes, Ashley. our That hasn't strategy on changed

And X and quite in value They're again, start. we the have also effect We to continue at say opening great open year. market, last year. one in this QX happy through just halo year. with to a in to performing off a that we're stores are stores coming X we're the X well. in quite getting this We'll opened time. of because Those incrementality a that supply once We

Operator

is come with Research. our going -- to Tower I to question from [Operator would Madhukar like Kunal Instructions] next Water

Kunal Madhukar

A couple, could. if on the revenue I One outlook.

into much is you're your of revenue? terms growth In versus revenue, that for you're that direct projecting the between growth factoring GMV how for that projecting difference

deeper to into is what which on cost, want dive based million just $XXX-odd G&A, I then about told the us, And the Ajay. you especially fixed

about talk $XXX the what based you because revenue on can of So are have? you seems million opportunities the base leverage potential kind high for that

Ajay Gopal

your for thanks question. Kunal,

question, So first we revenues last which XX% of total to look our your is X% on GMV. our is it total percentage you rightsized if portfolio. under of year, as at and about part direct, the Today, slightly direct a XX% of results of

expect it there. stay to We

that when purchased is direct in there they what's of a is up certain to end returns and items purchase Most consignor a title customers even items of from of that basis. policy we we out taking because are or element the on do selective very

forward. we've average. the driven going to margins really of at business, stable about improvements stay We that gross on think that's feel that stream about revenue our last part be XX% on I good relatively that and a I to expect going small So year, in margin

include and tech your To investment. our sales, product piece, on second it of what so SG&A does question is outside the

So sorry. no, in -- that that's included

you there your can again? Sorry, repeat question

Kunal Madhukar

looking the just G&A that kind which the part part, was fixed of the SG&A of number. at you mentioned I part, was total where X/X was the about

So that's about SG&A, at when million. $XXX a on non-GAAP I look basis,

I I of generally what see XX% $XXX other retailers. is million. would higher to of we like is which mean, understand, than wanted for So about revenue X/X be still that that

there what's sense and is get potential the to for in what from this wanted of just like So like number? leverage a

Ajay Gopal

Got it. it. Got

G&A So it is there -- classic it's functions. -- what's in is

that it's and company things offices it's of it's finance, it's analytics, office, public So it's facilities for cost, back our footprint nature.

forward, revenue. an us for not a We've total I going percentage come feel think investment it's the of to for see as of the infrastructure built forward. It's source really of about area a good as will like needed that. that be business us a right? as going company. And We you significant down leverage going continues to grow,

Operator

Capital. line question with we And the a follow-up have of from Northland Bobby Brooks

Robert Brooks

back consignor and operating jump how and on you drive big to improvement you AI. see want that just mentioned to opportunity kind the question with to a of I leverage on ask -- experience

and of those? So are more I looks kind like, if could that of future implementing was points, discuss anticipated these what's action what so if action just you they're future curious, the timeline points? maybe more And so

Rati Levesque

over Bobby. Athena please there. is Thanks, missing and the Yes. I We're started start, much couple the another here. anything There's is scale piece. years Smart is about year. think I'll opportunity if throughout just it. next piece. I'm how out sales getting one of so that Ajay, We'll

in me our launched You talk better about to site, getting an service the it by is only the better the it speed also prepared consignors how we attribution talk better internally and bring think about it's item that about is becomes the but site, agreement so the to heard to not But also because pricing to accurate, that level you're item more will more when remarks. predictive.

then that our for you is pricing for your obviously So and consignor the TRR more can and the objective. get

in day off completely the seller taking You're experience. X

the So discounting, the and funnel side which in right? front on the better all site, of touches search, people, about -- that and works item an you you're to size, full then automating means on see opportunity processes. Athena it as pricing, also from condition, much to attribution, think the things. the so more everything characteristics through better throughout only the not So but getting And buyer of you material a less see lot less on

again, So on opportunities our product road and and operational the we're delivering all really consignor. efficiencies that delivering map about the with focused resonates really excellence and excited

Operator

disconnect. may does Ladies you Thank for a And that great Everyone, today's to also and have call. session. going conclude today's participating, this and conference day. is conclude now question-and-answer you gentlemen,

The RealReal, Inc. (REAL) 20 Feb 252024 Q4 Earnings call transcript