Rent the Runway Reports Revenue Growth of 20.8% Amid Subscriber Decline
Rent the Runway (RENT) reported a 20.8% increase in revenue for its second fiscal quarter, reaching $97.7 million as of July 31, driven by higher add-on bookings and pricing adjustments. However, active subscribers declined by 3.8%, raising concerns about customer retention and long-term sustainability. The company improved gross margin to 36.1% from 30.0%, with non-GAAP adjusted EBITDA rising significantly to $12.6 million compared to $3.6 million in the prior year. Despite these gains, cash flow remains negative due to continued investment in rental inventory and operational costs. Management has paused certain initiatives like its marketplace pilot to focus on core operations but still faces challenges with subscriber growth and free cash generation.
Topics: cash flow sustainability EBITDA improvement revenue growth subscriber metrics