The RealReal, Inc. (REAL) Bundle
A Brief History of The RealReal, Inc.
Overview
The RealReal, Inc. is a leading online marketplace for authenticated luxury consignment, founded in 2011. As of 2024, the company continues to expand its services, offering a wide range of luxury goods including apparel, accessories, and home decor.
Financial Performance
As of September 30, 2024, The RealReal reported the following financial metrics:
| Metric | 2024 (9 months) | 2023 (9 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Consignment Revenue | $345,270,000 | $302,072,000 | $43,198,000 | 14% |
| Direct Revenue | $45,056,000 | $63,196,000 | ($18,140,000) | (29%) |
| Shipping Services Revenue | $46,163,000 | $40,663,000 | $5,500,000 | 14% |
| Total Revenue | $436,489,000 | $405,931,000 | $30,558,000 | 8% |
| Net Loss | ($65,747,000) | ($146,779,000) | $81,032,000 | 55% |
Operational Highlights
The company has seen a significant increase in its Gross Merchandise Value (GMV), which rose by 4% during the nine months ended September 30, 2024. The average order value (AOV) also increased by 3%, contributing to the overall revenue growth.
Key Changes and Strategic Initiatives
In 2024, The RealReal implemented a new commission structure, which resulted in a take rate increase from 37.4% to 38.5%. This change positively impacted the consignment revenue gross margin, which improved by 296 basis points in the nine months ended September 30, 2024 compared to the same period in 2023.
Cash Flow and Liquidity
As of September 30, 2024, The RealReal had cash and cash equivalents amounting to $153.2 million. The company reported a net cash used in operating activities of ($1,148,000) for the nine months ended September 30, 2024, compared to ($71,791,000) in the same period of the previous year, indicating improved operational efficiency.
Challenges and Market Position
The RealReal continues to face challenges in the competitive online luxury consignment market but remains focused on expanding its authenticated luxury offerings and enhancing customer experience.
Stockholder Equity
| Component | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Common Stock | $1 | $1 |
| Additional Paid-in Capital | $839,958,000 | $816,325,000 |
| Accumulated Deficit | ($1,185,372,000) | ($1,119,625,000) |
| Total Stockholders’ Equity (Deficit) | ($345,413,000) | ($303,299,000) |
Market Trends
Despite a challenging retail environment, The RealReal's focus on luxury goods and sustainability positions it well to capture a growing market segment interested in consignment shopping and eco-friendly practices.
Future Outlook
The company anticipates that operating losses may continue in the near term, but it remains optimistic about its growth strategy and market expansion efforts.
A Who Owns The RealReal, Inc. (REAL)
Major Shareholders
As of 2024, The RealReal, Inc. (REAL) has a diverse ownership structure, including institutional investors, insiders, and retail shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| Vanguard Group, Inc. | 10.5% | Institutional |
| BlackRock, Inc. | 9.8% | Institutional |
| FMR LLC (Fidelity) | 6.7% | Institutional |
| Insider Ownership (Executive Team & Board) | 5.2% | Insider |
| Other Institutional Investors | 20.0% | Institutional |
| Retail Investors | 47.8% | Retail |
Stock Performance
The stock performance of The RealReal, Inc. has shown fluctuations throughout the year. As of September 30, 2024, the closing stock price was $6.50, reflecting a year-to-date change of -15.2%.
Recent Financial Data
The following financial metrics provide insight into The RealReal's performance as of the latest reporting:
| Metric | Value |
|---|---|
| Total Revenue (Q3 2024) | $147.8 million |
| Net Loss (Q3 2024) | $(17.9) million |
| Gross Merchandise Value (GMV) | $433.1 million |
| Active Members | 37.8 million |
| Common Shares Outstanding | 109.7 million |
Insider Transactions
Insider transactions have included stock options and restricted stock units awarded to executives, contributing to the executive team's ownership stake. In 2024, the company reported the issuance of:
- 1,232,416 shares upon vesting of restricted stock units.
- 14,873 shares from the exercise of stock options.
Debt and Liabilities
The RealReal, Inc. has significant debt obligations as reflected in its balance sheet. As of September 30, 2024, the following liabilities were reported:
| Liability Type | Amount (in millions) |
|---|---|
| Convertible Senior Notes | $276.5 |
| Non-convertible Notes | $131.4 |
| Total Liabilities | $751.7 |
Market Capitalization
The market capitalization of The RealReal, Inc. as of September 30, 2024, was approximately $715 million, calculated based on the share price and the total number of shares outstanding.
The RealReal, Inc. (REAL) Mission Statement
Mission Overview
The RealReal, Inc. is a leading online marketplace for authenticated luxury consignment. The company's mission focuses on sustainability, authenticity, and providing a unique shopping experience for consumers. As of 2024, The RealReal aims to redefine luxury retail through its commitment to a circular economy, helping consumers buy and sell luxury goods while promoting environmental responsibility.
Key Components of the Mission Statement
- Sustainability: The RealReal emphasizes reducing waste through the resale of luxury items.
- Authenticity: The company guarantees the authenticity of all items sold, ensuring customer trust.
- Community: The RealReal aims to build a community of buyers and sellers who value luxury and sustainability.
Financial Performance and Growth Metrics
The RealReal's financial performance reflects its growth strategy and mission. Below is a summary of key financial metrics from the nine months ended September 30, 2024, compared to the same period in 2023:
| Metric | 2024 (in thousands) | 2023 (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Consignment Revenue | $345,270 | $302,072 | $43,198 | 14% |
| Direct Revenue | $45,056 | $63,196 | $(18,140) | (29%) |
| Shipping Services Revenue | $46,163 | $40,663 | $5,500 | 14% |
| Total Revenue | $436,489 | $405,931 | $30,558 | 8% |
| Gross Profit | $325,458 | $270,229 | $55,229 | 20% |
| Net Loss | $(65,747) | $(146,779) | $81,032 | 55% |
Active Membership and Engagement
As of September 30, 2024, The RealReal has achieved significant growth in its active membership base:
- Total active members: 37.8 million
- Active buyers for the nine months ended September 30, 2024: 795,000
- Average Order Value (AOV): $533
Sustainability Initiatives
The RealReal's commitment to sustainability is evident in its operational practices:
- Over $4.6 billion paid in commissions to consignors since inception.
- Focus on reducing carbon footprint through the resale of luxury goods.
Market Position and Future Outlook
The RealReal continues to strengthen its position in the luxury consignment market with a focus on innovation and customer experience. The company is leveraging technology to enhance its platform and improve operational efficiency, aligning with its mission to promote sustainability and authenticity in luxury retail.
How The RealReal, Inc. (REAL) Works
Overview of Business Model
The RealReal, Inc. operates as a leading online marketplace for authenticated luxury consignment. The company generates revenue primarily from consignment sales, direct sales of inventory, and shipping services.
Revenue Breakdown
As of September 30, 2024, The RealReal reported the following revenue figures:
| Revenue Type | Three Months Ended Sept 30, 2024 (in thousands) | Three Months Ended Sept 30, 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Consignment Revenue | $116,908 | $102,852 | 14% |
| Direct Revenue | $15,623 | $17,356 | (10%) |
| Shipping Services Revenue | $15,224 | $12,964 | 17% |
| Total Revenue | $147,755 | $133,172 | 11% |
Gross Merchandise Value (GMV)
For the three months ended September 30, 2024, The RealReal reported a GMV of $433.1 million, representing a 6% increase compared to $407.6 million in the same period in 2023. The net merchandise value (NMV) increased by 11% to $335.2 million from $302.9 million year-over-year.
Operating Expenses
Operating expenses for the three months ended September 30, 2024, were as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| Marketing | $11,604 |
| Operations and Technology | $66,199 |
| Selling, General and Administrative | $47,512 |
| Total Operating Expenses | $125,315 |
Net Loss
The net loss attributable to common stockholders for the three months ended September 30, 2024, was $17.9 million, compared to a net loss of $22.9 million in the same period of 2023. This translates to a basic net loss per share of $(0.16) for 2024 versus $(0.22) for 2023.
Cash Flow
For the nine months ended September 30, 2024, The RealReal reported net cash used in operating activities of $1.1 million, significantly improved from $71.8 million in the same period of 2023. The company experienced non-cash charges totaling $109.0 million and a net change in operating assets and liabilities that reflected a cash inflow.
Balance Sheet Highlights
As of September 30, 2024, The RealReal's balance sheet included:
| Assets (in thousands) | Amount |
|---|---|
| Cash and Cash Equivalents | $153,179 |
| Accounts Receivable | $15,953 |
| Inventory | $19,921 |
| Total Assets | $406,252 |
Liabilities and stockholders' deficit included:
| Liabilities (in thousands) | Amount |
|---|---|
| Total Current Liabilities | $225,697 |
| Total Liabilities | $751,665 |
| Total Stockholders' Deficit | $(345,413) |
Key Performance Indicators
The following key metrics were reported for the nine months ended September 30, 2024:
| Metric | Value |
|---|---|
| Active Buyers | 795,000 |
| Average Order Value (AOV) | $533 |
| Take Rate (%) | 38.5% |
The RealReal continues to evolve its operations, focusing on enhancing its marketplace by improving the customer experience and optimizing its inventory management strategies while addressing its financial challenges.
How The RealReal, Inc. (REAL) Makes Money
Revenue Streams
The RealReal, Inc. generates revenue primarily through three main streams: consignment revenue, direct revenue, and shipping services revenue.
Consignment Revenue
Consignment revenue is the largest source of income for The RealReal. In the nine months ended September 30, 2024, consignment revenue reached $345.3 million, a 14% increase compared to $302.1 million in the same period of 2023. This growth was driven by a 4% increase in Gross Merchandise Value (GMV) and a 3% increase in Average Order Value (AOV).
The take rate, which is the percentage of the sale price retained by The RealReal, improved to 38.5% from 37.4% year-over-year. This reflects an increase in sales mix from higher-value categories, particularly women's apparel.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Consignment Revenue | $345.3 million | $302.1 million | +14% |
| GMV | $1,325.9 million | $1,275.3 million | +4% |
| AOV | $533 | $515 | +3% |
| Take Rate | 38.5% | 37.4% | +1.1% |
Direct Revenue
Direct revenue, which is generated from the sale of inventory owned by The RealReal, decreased to $45.1 million in the nine months ended September 30, 2024, down 29% from $63.2 million in 2023. This decline was attributed to strategic actions taken to minimize vendor-purchased inventory, as the margin profile of direct revenue is lower than that of consignment revenue.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Direct Revenue | $45.1 million | $63.2 million | -29% |
Shipping Services Revenue
The RealReal also earns revenue from shipping services, which amounted to $46.2 million in the nine months ended September 30, 2024, representing a 14% increase from $40.7 million in 2023. This growth was primarily due to an increase in the standard shipping fee per order and a higher volume of orders processed.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Shipping Services Revenue | $46.2 million | $40.7 million | +14% |
Cost Structure
The cost of revenue for The RealReal includes costs associated with consignment, direct sales, and shipping services. In the nine months ended September 30, 2024, the total cost of revenue was $111.0 million, down from $135.7 million in 2023, reflecting a decrease in costs across all categories.
| Cost Component | 2024 | 2023 |
|---|---|---|
| Cost of Consignment Revenue | $39.7 million | $43.7 million |
| Cost of Direct Revenue | $39.0 million | $61.2 million |
| Cost of Shipping Services Revenue | $32.3 million | $30.9 million |
| Total Cost of Revenue | $111.0 million | $135.7 million |
Gross Profit and Operating Loss
For the nine months ended September 30, 2024, The RealReal reported a gross profit of $325.5 million, up 20% from $270.2 million in the same period in 2023. However, the company recorded an operating loss of $51.3 million compared to $145.2 million in 2023, indicating improvements in operational efficiency despite ongoing losses.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Gross Profit | $325.5 million | $270.2 million | +20% |
| Operating Loss | $51.3 million | $145.2 million | Improvement |
Member Base and Market Position
As of September 30, 2024, The RealReal has a global member base of over 37.8 million. The company has cumulatively paid more than $4.6 billion in commissions to consignors, reinforcing its position as a leading player in the luxury consignment market.
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Resources:
- The RealReal, Inc. (REAL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The RealReal, Inc. (REAL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The RealReal, Inc. (REAL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.