Rent the Runway Q3 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Fri, December 12, 2025 astatine 8:15 AM CST 14 min read

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Friday, Dec. 12, 2025 astatine 8:30 a.m. ET

• Chief Executive Officer — Jennifer Hyman

• Chief Financial Officer — Siddharth Thacker

Jennifer Hyman: Thanks, Cara, and convey you, everyone, for joining. We person been laser-focused connected 2 wide priorities. First, completing a strategical recapitalization of the concern to importantly fortify our equilibrium sheet. Second, bringing the concern backmost to maturation done a caller inventory strategy, accrued merchandise innovation, and improved transportation to our halfway customer. Now that we are present successful Q3, I americium pleased to accidental we person delivered some of these goals. We person strengthened our fiscal instauration by reducing our full indebtedness from astir $319 cardinal to astir $120 cardinal and extending the maturity to 2029, giving america years of further runway.

With the recapitalization, 2 highly respected backstage equity firms with heavy acquisition successful the user retail space, Nexus and Story3, alongside our semipermanent existing lender, contributed caller superior to further enactment the concern and its maturation initiatives. In addition, they volition articulation america successful the boardroom to supply their expertise and support. And importantly, the Rent the Runway, Inc. concern is increasing again. We are connected way for 11% to 14% year-over-year gross maturation successful Q4, up from 1% gross maturation year-over-year successful Q4 2024. Q3, well, fiscal twelvemonth 2025 ending progressive subscribers grew 12% year-over-year arsenic our basal of inventory has grown and we person enhanced the lawsuit experience.

Importantly, contempt raising prices successful August, we proceed to spot betterment successful some acquisition and retention versus the anterior year. We judge that customers are responding positively due to the fact that the end-to-end acquisition connected our app, discovering inventory, personalization, and getting the inventory you privation is better. And that shows up archetypal successful retention arsenic existing customers are the archetypal to notice. Inventory-related cancellations, which are related to availability, selection, and quality, year-to-date, is down implicit 20% year-over-year. And successful Q3, was down astir 30% versus past year. We tracked 3 important input metrics that are indicators of lawsuit engagement: Net Promoter Score, visits, and heart. All of which are up.

Our Q3 subscription Net Promoter Score was up 43% year-over-year, 67% versus Q3 2023, and 100% versus Q3 2022. We judge that this demonstrates a multiyear rebuild of lawsuit trust. Customer engagement is astatine its highest level successful caller years. The mean progressive subscriber visited our app implicit 20 times per period successful Q3, which is 34% higher year-over-year. Parts per subscriber, 1 of the astir important inputs to loyalty, arsenic we spot them arsenic impervious of the lawsuit uncovering and loving the inventory, are up 15% year-over-year successful Q3. And due to the fact that she is much engaged, she is consenting to walk much wealth with us.