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Jul 31
Rent the Runway Q2 2025 Earnings Report
Rent the Runway reported its second quarter 2025 earnings, highlighting a transformative recapitalization plan and continued business growth.
Key Takeaways
Rent the Runway announced a significant recapitalization plan to reduce its debt from $340 million to $120 million, extending maturity to 2029. The company reported a 2.5% year-over-year revenue increase to $80.9 million and a 13.4% increase in ending active subscribers. However, gross profit and Adjusted EBITDA saw declines compared to the prior year.
Rent the Runway announced a transformative recapitalization plan, reducing debt from $340 million to $120 million and extending maturity to 2029.
Revenue for Q2 2025 increased by 2.5% year-over-year, reaching $80.9 million.
Ending active subscribers grew by 13.4% year-over-year to 146,373, and average active subscribers increased by 6.8%.
Gross Profit decreased by 25.0% to $24.3 million, and Adjusted EBITDA fell to $3.6 million from $13.7 million in the prior year.
Rent the Runway
Rent the Runway
Rent the Runway Revenue by Segment
Revenue by Segment
Subscription and Reserve Rental Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
For the fiscal third quarter of 2025, Rent the Runway expects revenue between $82 million and $84 million and Adjusted EBITDA Margin between (2)% and +2%. For fiscal year 2025, the company reiterates guidance for double-digit growth in ending Active Subscribers but expects Free Cash Flow to be lower than $(40) million due to recapitalization costs.
Positive Outlook
- Expected revenue growth for Q3 2025, with a range of $82 million to $84 million.
- Reiterated guidance for double-digit growth in ending Active Subscribers for fiscal year 2025.
- Anticipated positive Adjusted EBITDA Margin for Q3 2025, with a range of (2)% to +2%.
- The recapitalization plan is expected to strengthen the balance sheet and provide financial flexibility.
- Continued deployment of bold inventory strategy and increased customer engagement are expected to drive future growth.
Challenges Ahead
- Free Cash Flow for fiscal year 2025 is expected to be lower than $(40) million.
- Costs related to the recapitalization transactions will negatively impact Free Cash Flow.
- Uncertainties around the economy could affect actual results for fiscal year 2025.
- Potential tariffs could further affect actual results for fiscal year 2025.
- Timing of potential customer retention improvements remains an unknown factor.
Revenue & Expenses
Visualization of income flow from segment revenue to net income