The RealReal revenue jumps 19% to $206 million in third quarter
Key Facts
The RealReal reported results on October 29 for the third quarter ended September 30, posting revenue of $206 million, up 19% year over year, and gross merchandise value of $642 million, up 23%. Revenue topped analysts’ estimate of $196.78 million, according to an Investing.com comparison, while non-GAAP earnings per share came to $0.02 against an estimate of $0.003. The company released its results after the market close, so the share move during the October 28 session came before the announcement. In the October 29 session, the stock rose 2.62% to $11.35, then climbed to $11.91 in after-hours trading, according to Investing.com. The figures reflected growth in sales and merchandise value traded, alongside improved adjusted profitability metrics.
The results also exceeded the range the company set for the third quarter in its August disclosure, when it forecast revenue of between $194 million and $198 million and adjusted EBITDA of between $13.5 million and $14.5 million. Actual revenue was $206 million, while adjusted EBITDA reached $17 million, surpassing the upper end of both ranges. The adjusted EBITDA margin was 8.3% of revenue, compared with 5.4% in the same period a year earlier, when the company recorded $9.3 million. Gross margin also rose to 74.9%, up 64 basis points year over year, according to the company’s statement. The comparison shows that the improvement extended across revenue and margins, beyond beating the earnings-per-share and revenue estimates cited in the results report.
By revenue source, consignment revenue rose to $159.145 million from $134.429 million a year earlier, while direct revenue increased to $27.381 million from $22.928 million. The chief executive said orders posted their “strongest quarterly growth since 2022,” increasing 15% from the same period last year. Gross merchandise value reached $642 million, a measure of the volume of goods sold through the platform, according to the earnings statement, which reported annual growth of 23%. Total revenue rose 19% to $206 million during the quarter. These indicators place growth in orders, consignment and direct revenue in the context of the increase in gross merchandise value.
But reported net income needs to be read alongside the components of earnings per share: the company posted net income of $16 million, compared with a net loss of $54 million a year earlier. The company said quarterly net income included a non-cash adjustment of $21.2 million related to a change in the fair value of a warrant liability. On an earnings-per-share basis, basic and diluted non-GAAP earnings came to $0.02, while diluted GAAP earnings showed a loss of $0.04 per share. The earnings picture therefore varies by measure, despite reported net income moving from a loss to a profit. The report combines stronger adjusted earnings and margins with the non-cash adjustment and a diluted per-share loss under generally accepted accounting principles.
The RealReal raised its fiscal 2026 outlook to revenue of between $806 million and $810 million and adjusted EBITDA of between $71.1 million and $72.6 million. For the fourth quarter, the company expects revenue of between $218 million and $222 million and adjusted EBITDA of between $27.5 million and $29 million. These ranges are the next financial guidance in the earnings statement, after third-quarter performance exceeded the company’s previous expectations. Management announced that earlier outlook in August, setting a third-quarter revenue range of $194 million to $198 million and an adjusted EBITDA range of $13.5 million to $14.5 million. Attention now turns to the fourth quarter and fiscal year, based on the ranges the company announced.