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Oct 31, 2025
Rent the Runway Q3 2025 Earnings Report
Rent the Runway reported Q3 2025 results and returned to profitability with a significant gain from debt restructuring.
Key Takeaways
Rent the Runway delivered strong top-line growth and ended the quarter with positive net income due to a one-time gain from recapitalization. Subscriber growth remained in double digits, supported by expanded inventory and improved retention.
Revenue by Segment
Forward Guidance
Rent the Runway expects continued growth in Q4 with steady revenue and improved EBITDA margins, though cash flow remains challenged by recapitalization-related costs.
Positive Outlook
- Q4 revenue expected between $85M and $87M
- Adjusted EBITDA margin guided between 11% and 13%
- FY25 revenue projected at $323.1M to $325.1M
- Reiterated guidance for double-digit growth in ending active subscribers
- Continued improvements in customer retention and inventory experience
Challenges Ahead
- Free cash flow for FY25 expected to be worse than -$40M
- Gross margin declined YoY due to inventory costs
- Adjusted EBITDA margin fell sharply YoY in Q3
- Ongoing macroeconomic uncertainty may affect results
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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