Q3 2025 Rent the Runway Inc Earnings Call Transcript
Key Points
- Rent the Runway Inc (RENT) successfully reduced its total debt from approximately $319 million to $120 million, extending the maturity to 2029.
- The company achieved a 12% year-over-year growth in active subscribers by the end of Q3 fiscal year 2025.
- Revenue per subscriber increased, driven by a price increase in August 2025 and improved customer engagement.
- The company reported a 17% year-over-year increase in the subscription add-on rate in Q3 2025.
- Rent the Runway Inc (RENT) launched several new features to enhance customer experience, including a personalized homepage and better onboarding for new subscribers.
- Gross margins decreased to 29.6% in Q3 2025 from 34.7% in Q3 2024, primarily due to higher revenue share costs.
- Adjusted EBITDA for Q3 2025 was $4.3 million, down from $9.3 million in Q3 2024.
- Free cash flow was negative $13.6 million in Q3 2025, compared to negative $3.4 million in Q3 2024.
- The company experienced higher operating expenses, primarily due to increased employee expenses.
- Rent the Runway Inc (RENT) expects free cash flow to be lower than negative $40 million for fiscal year 2025, mainly due to costs associated with the recapitalization transaction.
Greetings. Welcome to Rent the Runway third quarter 2025 earnings call. (Operator Instructions) Please note that this conference is being recorded.
I'll now turn the conference over to Cara Schembri, Chief Administrative Officer and General Counsel. Thank you, Cara. You may now begin.
Hello, everyone, and thanks for joining us today. During this call, we will make references to our Q3 2025 earnings presentation, which can be found in the Events and Presentations section of our Investor Relations website. Before we begin, we would like to remind you that this call will include forward-looking statements. These statements include guidance and underlying assumptions for the fourth quarter and fiscal year 2025 and statements regarding the recapitalization transactions and our business initiatives. These statements are subject to various risks, uncertainties, and assumptions that could cause our actual results to differ materially.
These risks, uncertainties, and assumptions
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