The RealReal Q4 2024 Earnings: Mixed Results, tepid Outlook

Q4 Highlights:

* Revenue: $164 million (in line with estimates)
* Adjusted EPS: -$0.01 (in line with estimates)
* Adjusted EBITDA: $11.01 million (6.7% margin, exceeding estimates)

Full-Year 2025 Guidance:

* Revenue: $652.5 million (slightly below estimates, implying 8.7% growth)
* EBITDA: $25 million (below estimates)

Company Highlights:

* Founded by Julie Wainwright, The RealReal is an online marketplace for second-hand luxury goods.
* Active buyers grew by 27,000 in Q4 to 408,000.
* Average Revenue per User (ARPU) increased by 6.8% to $401.95.

Growth and Outlook:

* Annualized revenue growth of 8.7% over the past three years is considered mediocre.
* Sell-side analysts predict 9.5% growth in the next 12 months.
* The RealReal faces challenges in accelerating growth, despite its strong ARPU.

Key Takeaways:

* EBITDA outperformed expectations, while full-year EBITDA guidance missed.
* Active buyer count fell short of estimates.
* The earnings report leaves room for improvement, as reflected in the post-earnings stock decline.

Conclusion:

The RealReal's Q4 results delivered mixed signals. While revenue and EBITDA met expectations, the full-year guidance and active buyer growth were disappointing. Investors should consider the company's valuation, business qualities, and the latest earnings before making investment decisions.