In a strong finish to 2021, The RealReal saw significant growth in its gross merchandise value (GMV) and total revenues, both increasing by more than 40%. Despite this, the company’s profitability remained in the red. In the fourth quarter, revenues grew by an impressive 67% to reach $145 million, while full-year revenues jumped by 56% to $468 million compared to the previous year. Additionally, both fourth quarter and full-year GMV experienced substantial growth, with increases of 45% and 50% respectively.
However, despite the company’s strong top-line growth and the significant leverage gained from operating expenses, The RealReal reported a widened net loss of $52 million in the fourth quarter, compared to $51 million during the same period in 2020. While there was improvement in adjusted EBITDA, reaching $(26.9) million or (18.5)% of total revenue, there is still work to be done to achieve profitability.
Looking at the full year, The RealReal recorded a net loss of $236 million, compared to $176 million in 2020. Adjusted EBITDA for the year was $(126.9) million or (27.1)% of total revenue. Despite these losses, the company remains optimistic about its financial performance.
Julie Wainwright, the founder and CEO of The RealReal, expressed her satisfaction with the solid financial results for the fourth quarter of 2021. She specifically highlighted the improvements in adjusted EBITDA loss, attributing them to the strong top-line growth and operational expense leverage. The company also emphasized its utilization of technology to enhance operational efficiency and drive higher average selling prices.
Though The RealReal faced some processing delays due to staffing challenges caused by COVID-19 cases at the end of 2021 and the beginning of 2022, the company maintains a positive outlook for its supply chain and anticipates a robust year in 2022.
Looking ahead to 2022, The RealReal has set ambitious expectations. The company predicts a GMV range of $2 billion to $2.1 billion and anticipates that adjusted EBITDA will narrow to a range between $(100) and $(80) million.
Useful links:
– The RealReal Official Website
– Business of Fashion Article: The RealReal Lost Less Money Last Quarter
