The RealReal (Nasdaq: REAL)—the world’s largest online marketplace
for authenticated, resale luxury goods—today reported financial
results for its fourth quarter and full year ended December 31,
2022. Fourth quarter and full year 2022 gross merchandise value
(GMV) increased 13% and 23%, respectively, compared to the same
periods in 2021.
“We are pleased to announce solid financial results for the
fourth quarter and full year 2022, including improved gross profit
and Adjusted EBITDA loss on a year-over-year basis,” said Rati
Levesque, President and Chief Operating Officer of The RealReal.
“During the fourth quarter and into 2023, we continue to focus on
our key initiatives: (1) update our consignor commission structure,
(2) improve efficiency and cut costs, (3) optimize product pricing,
and (4) pursue potential new revenue streams. We continue to
believe these actions will move the business forward. Additionally,
we are pleased with the recent addition of John Koryl as Chief
Executive Officer; his leadership will be invaluable as we drive
toward profitability.”
Robert Julian, Chief Financial Officer of The RealReal, stated,
“The fourth quarter results demonstrated the financial progress we
have made throughout 2022. In particular, shrinking the
unprofitable direct business and growing the profitable consignment
business resulted in a 490-basis-point improvement in gross margin
in the fourth quarter of 2022 compared to the fourth quarter of
2021. This change also benefited our balance sheet. As of the end
of 2022, net inventory decreased $28 million year-over-year, and we
anticipate that our inventory balance will continue to decline in
2023. Also, we improved cash used in operating, investing, and
financing activities in the fourth quarter of 2022 to $(7) million,
compared to $(57) million in the first quarter, $(45) million in
the second quarter, and $(15) million in third quarter of
2022.”
Fourth Quarter Financial Highlights
- GMV was $493 million, an increase of 13% compared to the same
period in 2021
- Total Revenue was $160 million, an increase of 10% compared to
the same period in 2021
- Net Loss was $39 million compared to $52 million in the same
period in 2021
- Adjusted EBITDA was $(20.2) million or (12.6)% of total revenue
compared $(26.9) million or (18.5)% of total revenue in the fourth
quarter of 2021
- GAAP basic and diluted net loss per share was $(0.39) compared
to $(0.56) in the prior year period
- Non-GAAP basic and diluted net loss per share was $(0.29)
compared to $(0.42) in the prior year period
- Top-line-related Metrics
- Trailing 12-months active buyers reached 998,000, an increase
of 25% compared to the same period in 2021
- Orders reached 993,000, an increase of 15% compared to the same
period in 2021
- Average order value (AOV) was $496, a decrease of 2% compared
to the same period in 2021
- Lower AOV was driven by a 2% decrease in average selling prices
(ASPs)
- GMV from repeat buyers was 84%, which was consistent with the
fourth quarter of 2021
Full Year 2022 Financial Highlights
- GMV was $1.8 billion, an increase of 23% compared to full year
2021
- Total Revenue was $603 million, an increase of 29% compared to
full year 2021
- Net Loss was $196 million compared to $236 million in 2021
- Adjusted EBITDA was $(112.4) million or (18.6)% of total
revenue compared to $(126.9) million or (27.1)% of total revenue
for full year 2021
- GAAP basic and diluted net loss per share was $(2.05) compared
to $(2.58) in the prior year
- Non-GAAP basic and diluted net loss per share was $(1.53)
compared to $(1.88) in the prior year
- At the end of 2022, cash and cash equivalents totaled $294
million
Q1 2023 GuidanceBased on market conditions as
of February 28, 2023, we are providing guidance for GMV, total
revenue and Adjusted EBITDA, which is a Non-GAAP financial
measure.
We have not reconciled forward-looking Adjusted EBITDA to net
income (loss), the most directly comparable GAAP measure, because
we cannot predict with reasonable certainty the ultimate outcome of
certain components of such reconciliations, including payroll tax
expense on employee stock transactions, that are not within our
control, or other components that may arise, without unreasonable
effort. For these reasons, we are unable to assess the probable
significance of the unavailable information, which could materially
impact the amount of future net income (loss).
|
Q1 2023 |
GMV |
$430 - $460 million |
Total
Revenue |
$135 - $145 million |
Adjusted
EBITDA |
$(35) - $(31) million |
We expect to provide full year guidance on our next earnings
call.
Webcast and Conference CallThe RealReal will
post a stockholder letter on its investor relations website
at investor.therealreal.com/financial-information/quarterly-results and
host a conference call at 2:00 p.m. Pacific Time (5:00 p.m. Eastern
Time) to answer questions regarding its fourth quarter and full
year 2022 results. Investors and analysts can access the call via
the following link:
https://register.vevent.com/register/BI79b9f8053dba42d19df97d2b66ff5eb3.
The call will also be available via live webcast
at investor.therealreal.com along with the stockholder
letter and supporting slides.
An archive of the webcast conference call will be available
shortly after the call ends at investor.therealreal.com.
About The RealReal, Inc.
The RealReal is the world’s largest online marketplace for
authenticated, resale luxury goods, with more than 31 million
members. With a rigorous authentication process overseen by
experts, The RealReal provides a safe and reliable platform for
consumers to buy and sell their luxury items. We have hundreds of
in-house gemologists, horologists and brand authenticators who
inspect thousands of items each day. As a sustainable company, we
give new life to pieces by thousands of brands across numerous
categories—including women's and men's fashion, fine jewelry and
watches, art and home—in support of the circular economy. We make
selling effortless with free virtual appointments, in-home pickup,
drop-off and direct shipping. We do all of the work for consignors,
including authenticating, using AI and machine learning to
determine optimal pricing, photographing and listing their items,
as well as handling shipping and customer service.
Investor Relations Contact:Caitlin HoweSenior
Vice President, Investor RelationsIR@therealreal.com
Press Contact:Laura HogyaHead of
Communicationspr@therealreal.com
Forward Looking Statements
This press release contains forward-looking statements relating
to, among other things, the future performance of The RealReal that
are based on the company's current expectations, forecasts and
assumptions and involve risks and uncertainties. In some cases, you
can identify forward-looking statements by terminology such as
“may,” “will,” “should,” “could,” “expect,” “plan,” anticipate,”
“believe,” “estimate,” “predict,” “intend,” “potential,”
“continue,” “ongoing” or the negative of these terms or other
comparable terminology. These statements include, but are not
limited to, statements about future operating and financial
results, including our strategies, plans, commitments, objectives
and goals, in particular in the context of the recent geopolitical
events and uncertainty surrounding macroeconomic trends, inflation
and impacts of the COVID-19 pandemic, our ability to achieve
anticipated savings in connection with our real estate reduction
plan and associated workforce reduction; financial guidance,
timeline to profitability, 2025 vision and long-range financial
projections. Actual results could differ materially from those
predicted or implied and reported results should not be considered
as an indication of future performance. Other factors that could
cause or contribute to such differences include, but are not
limited to, the impact of r COVID-19 pandemic on our operations and
our business environment, inflation, macroeconomic uncertainty,
geopolitical instability, any failure to generate a supply of
consigned goods, pricing pressure on the consignment market
resulting from discounting in the market for new goods, failure to
efficiently and effectively operate our merchandising and
fulfillment operations, labor shortages and other reasons.
More information about factors that could affect the company's
operating results is included under the captions “Risk Factors” and
“Management's Discussion and Analysis of Financial Condition and
Results of Operations” in the company's most recent Annual Report
on Form 10-K for the year ended December 31, 2021 and subsequent
Quarterly Reports on Form 10-Q, copies of which may be obtained by
visiting the company's Investor Relations website at
https://investor.therealreal.com or the SEC's website at
www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this press release, which are based
on information available to the company on the date hereof. The
company assumes no obligation to update such statements.
Non-GAAP Financial Measures
To supplement our unaudited and condensed financial statements
presented in accordance with generally accepted accounting
principles ("GAAP"), this earnings release and the accompanying
tables and the related earnings conference call contain certain
non-GAAP financial measures, including Adjusted EBITDA, Adjusted
EBITDA as a percentage of total revenue ("Adjusted EBITDA Margin"),
non-GAAP net loss attributable to common stockholders, and non-GAAP
net loss per share attributable to common stockholders, basic and
diluted. We have provided a reconciliation of these non-GAAP
financial measures to the most directly comparable GAAP financial
measures in this earnings release.
We do not, nor do we suggest that investors should, consider
such non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with
GAAP. Investors should also note that non-GAAP financial measures
we use may not be the same non-GAAP financial measures, and may not
be calculated in the same manner, as that of other companies,
including other companies in our industry.
Adjusted EBITDA is a key performance
measure that our management uses to assess our operating
performance. Because Adjusted EBITDA facilitates internal
comparisons of our historical operating performance on a more
consistent basis, we use this measure as an overall assessment of
our performance, to evaluate the effectiveness of our business
strategies and for business planning purposes. Adjusted EBITDA may
not be comparable to similarly titled metrics of other
companies.
We calculate Adjusted EBITDA as net
loss before interest income, interest expense, other (income)
expense net, provision (benefit) for income taxes, depreciation and
amortization, further adjusted to exclude stock-based compensation,
employer payroll tax on employee stock transactions, and certain
one-time expenses. The employer payroll tax expense related to
employee stock transactions are tied to the vesting or exercise of
underlying equity awards and the price of our common stock at the
time of vesting, which may vary from period to period independent
of the operating performance of our business. Adjusted EBITDA
has certain limitations as the measure excludes the impact of
certain expenses that are included in our statements of operations
that are necessary to run our business and should not be considered
as an alternative to net loss or any other measure of financial
performance calculated and presented in accordance with GAAP.
In particular, the exclusion of certain expenses in calculating
Adjusted EBITDA and Adjusted EBITDA Margin facilitates operating
performance comparisons on a period-to-period basis and, in the
case of exclusion of the impact of stock-based compensation and the
related employer payroll tax on employee stock transactions,
excludes an item that we do not consider to be indicative of our
core operating performance. Investors should, however, understand
that stock-based compensation and the related employer payroll tax
will be a significant recurring expense in our business and an
important part of the compensation provided to our employees.
Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA
Margin provide useful information to investors and others in
understanding and evaluating our operating results in the same
manner as our management and board of directors.
Free cash flow is a non-GAAP financial
measure that is calculated as net cash (used in) provided by
operating activities less net cash used to purchase property and
equipment and capitalized proprietary software development costs.
We believe free cash flow is an important indicator of our business
performance, as it measures the amount of cash we generate.
Accordingly, we believe that free cash flow provides useful
information to investors and others in understanding and evaluating
our operating results in the same manner as our management.
Non-GAAP net loss per share attributable to common
stockholders, basic and diluted is a non-GAAP
financial measure that is calculated as GAAP net loss plus
stock-based compensation expense, provision (benefit) for income
taxes, employer payroll tax on employee stock transactions and
non-recurring items divided by weighted average shares outstanding.
We believe that adding back stock-based compensation expense,
employer payroll tax on employee stock transactions, provision
(benefit) for income taxes, and non-recurring items as adjustments
to our GAAP net loss, before calculating per share amounts for all
periods presented provides a more meaningful comparison between our
operating results from period to period.
THE REALREAL,
INC.Statements of Operations(In
thousands, except share and per share data)(Unaudited)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
Consignment revenue |
$ |
110,199 |
|
|
$ |
86,508 |
|
|
$ |
384,979 |
|
|
$ |
302,221 |
|
Direct revenue |
|
33,252 |
|
|
|
45,262 |
|
|
|
158,726 |
|
|
|
120,844 |
|
Shipping services revenue |
|
16,204 |
|
|
|
13,355 |
|
|
|
59,788 |
|
|
|
44,627 |
|
Total revenue |
|
159,655 |
|
|
|
145,125 |
|
|
|
603,493 |
|
|
|
467,692 |
|
Cost of revenue: |
|
|
|
|
|
|
|
Cost of consignment revenue |
|
13,770 |
|
|
|
14,764 |
|
|
|
56,963 |
|
|
|
44,985 |
|
Cost of direct revenue |
|
36,246 |
|
|
|
36,062 |
|
|
|
141,661 |
|
|
|
101,427 |
|
Cost of shipping services revenue |
|
13,029 |
|
|
|
13,672 |
|
|
|
56,178 |
|
|
|
47,803 |
|
Total cost of revenue |
|
63,045 |
|
|
|
64,498 |
|
|
|
254,802 |
|
|
|
194,215 |
|
Gross profit |
|
96,610 |
|
|
|
80,627 |
|
|
|
348,691 |
|
|
|
273,477 |
|
Operating expenses: |
|
|
|
|
|
|
|
Marketing |
|
14,659 |
|
|
|
18,371 |
|
|
|
63,128 |
|
|
|
62,749 |
|
Operations and technology |
|
71,799 |
|
|
|
62,923 |
|
|
|
279,110 |
|
|
|
235,829 |
|
Selling, general and administrative |
|
48,097 |
|
|
|
43,914 |
|
|
|
195,160 |
|
|
|
176,418 |
|
Legal settlement |
|
— |
|
|
|
1,601 |
|
|
|
456 |
|
|
|
13,389 |
|
Total operating expenses(1) |
|
134,555 |
|
|
|
126,809 |
|
|
|
537,854 |
|
|
|
488,385 |
|
Loss from operations |
|
(37,945 |
) |
|
|
(46,182 |
) |
|
|
(189,163 |
) |
|
|
(214,908 |
) |
Interest income |
|
1,831 |
|
|
|
116 |
|
|
|
3,191 |
|
|
|
365 |
|
Interest expense |
|
(2,458 |
) |
|
|
(6,157 |
) |
|
|
(10,472 |
) |
|
|
(21,531 |
) |
Other income (expense),
net |
|
38 |
|
|
|
1 |
|
|
|
171 |
|
|
|
23 |
|
Loss before provision for
income taxes |
|
(38,534 |
) |
|
|
(52,222 |
) |
|
|
(196,273 |
) |
|
|
(236,051 |
) |
Provision (benefit) for income
taxes |
|
76 |
|
|
|
(27 |
) |
|
|
172 |
|
|
|
56 |
|
Net loss attributable to
common stockholders |
$ |
(38,610 |
) |
|
$ |
(52,195 |
) |
|
$ |
(196,445 |
) |
|
$ |
(236,107 |
) |
Net loss per share
attributable to common stockholders, basic and diluted |
$ |
(0.39 |
) |
|
$ |
(0.56 |
) |
|
$ |
(2.05 |
) |
|
$ |
(2.58 |
) |
Weighted average shares used
to compute net loss per share attributable to common stockholders,
basic and diluted |
|
98,546,282 |
|
|
|
92,634,986 |
|
|
|
95,921,246 |
|
|
|
91,409,624 |
|
|
|
|
|
|
|
|
|
(1)Includes stock-based
compensation as follows: |
|
|
|
|
|
|
|
Marketing |
$ |
435 |
|
|
$ |
633 |
|
|
$ |
2,209 |
|
|
$ |
2,557 |
|
Operations and technology |
|
3,919 |
|
|
|
5,606 |
|
|
|
19,822 |
|
|
|
21,395 |
|
Selling, general and administrative |
|
4,764 |
|
|
|
6,239 |
|
|
|
24,107 |
|
|
|
24,850 |
|
Total |
$ |
9,118 |
|
|
$ |
12,478 |
|
|
$ |
46,138 |
|
|
$ |
48,802 |
|
THE REALREAL,
INC.Condensed Balance Sheets(In
thousands, except share and per share data)(Unaudited)
|
December 31,2022 |
|
December 31,2021 |
Assets |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
293,793 |
|
|
$ |
418,171 |
|
Accounts receivable |
|
12,207 |
|
|
|
7,767 |
|
Inventory, net |
|
42,967 |
|
|
|
71,015 |
|
Prepaid expenses and other current assets |
|
23,291 |
|
|
|
20,859 |
|
Total current assets |
|
372,258 |
|
|
|
517,812 |
|
Property
and equipment, net |
|
112,679 |
|
|
|
89,286 |
|
Operating lease right-of-use assets |
|
127,955 |
|
|
|
145,311 |
|
Other
assets |
|
2,749 |
|
|
|
2,535 |
|
Total assets |
$ |
615,641 |
|
|
$ |
754,944 |
|
Liabilities and Stockholders’ Equity
(Deficit) |
|
|
|
Current
liabilities |
|
|
|
Accounts payable |
$ |
11,902 |
|
|
$ |
4,503 |
|
Accrued consignor payable |
|
81,543 |
|
|
|
71,042 |
|
Operating lease liabilities, current portion |
|
20,776 |
|
|
|
18,253 |
|
Other accrued and current liabilities |
|
93,292 |
|
|
|
94,188 |
|
Total current liabilities |
|
207,513 |
|
|
|
187,986 |
|
Operating lease liabilities, net of current portion |
|
125,118 |
|
|
|
143,159 |
|
Convertible senior notes, net |
|
449,848 |
|
|
|
348,380 |
|
Other
noncurrent liabilities |
|
3,254 |
|
|
|
2,291 |
|
Total liabilities |
|
785,733 |
|
|
|
681,816 |
|
Stockholders’ equity (deficit): |
|
|
|
Common stock, $0.00001 par value; 500,000,000 shares authorized as
of December 31, 2022 and December 31, 2021; 99,088,172 and
92,960,066 shares issued and outstanding as of December 31, 2022
and December 31, 2021, respectively |
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
781,060 |
|
|
|
841,255 |
|
Accumulated deficit |
|
(951,153 |
) |
|
|
(768,128 |
) |
Total stockholders’ equity (deficit) |
|
(170,092 |
) |
|
|
73,128 |
|
Total liabilities and stockholders’ equity (deficit) |
$ |
615,641 |
|
|
$ |
754,944 |
|
THE REALREAL,
INC.Condensed Statements of Cash Flows(In
thousands)(Unaudited)
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(196,445 |
) |
|
$ |
(236,107 |
) |
Adjustments to reconcile net loss to cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
27,669 |
|
|
|
23,531 |
|
Stock-based compensation expense |
|
46,138 |
|
|
|
48,802 |
|
Reduction of operating lease right-of-use assets |
|
19,602 |
|
|
|
19,439 |
|
Bad debt expense |
|
1,680 |
|
|
|
1,034 |
|
Accrued interest on convertible notes |
|
— |
|
|
|
950 |
|
Accretion of debt discounts and issuance costs |
|
2,368 |
|
|
|
13,989 |
|
Loss on disposal of property and equipment and impairment of
capitalized proprietary software |
|
702 |
|
|
|
546 |
|
Other adjustments |
|
— |
|
|
|
10 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(6,120 |
) |
|
|
(1,588 |
) |
Inventory, net |
|
28,048 |
|
|
|
(28,694 |
) |
Prepaid expenses and other current assets |
|
(2,952 |
) |
|
|
(4,009 |
) |
Other assets |
|
(409 |
) |
|
|
(638 |
) |
Operating lease liability |
|
(17,764 |
) |
|
|
(15,285 |
) |
Accounts payable |
|
4,947 |
|
|
|
(9,989 |
) |
Accrued consignor payable |
|
10,501 |
|
|
|
13,989 |
|
Other accrued and current liabilities |
|
(9,823 |
) |
|
|
30,922 |
|
Other noncurrent liabilities |
|
301 |
|
|
|
947 |
|
Net cash used in operating activities |
|
(91,557 |
) |
|
|
(142,151 |
) |
Cash flow from
investing activities: |
|
|
|
Proceeds from maturities of short-term investments |
|
— |
|
|
|
4,000 |
|
Capitalized proprietary software development costs |
|
(14,061 |
) |
|
|
(9,967 |
) |
Purchases of property and equipment |
|
(22,861 |
) |
|
|
(37,470 |
) |
Net cash used in investing activities |
|
(36,922 |
) |
|
|
(43,437 |
) |
Cash flow from
financing activities: |
|
|
|
Proceeds from issuance of 2028 convertible senior notes, net of
issuance costs |
|
— |
|
|
|
278,234 |
|
Purchase of capped calls in conjunction with the issuance of the
2028 convertible senior notes |
|
— |
|
|
|
(33,666 |
) |
Proceeds from exercise of stock options |
|
2,906 |
|
|
|
6,009 |
|
Proceeds from issuance of stock in connection with the Employee
Stock Purchase Program |
|
1,400 |
|
|
|
2,341 |
|
Taxes paid related to restricted stock vesting |
|
(205 |
) |
|
|
(5 |
) |
Net cash provided by financing activities |
|
4,101 |
|
|
|
252,913 |
|
Net increase (decrease) in cash and cash equivalents |
|
(124,378 |
) |
|
|
67,325 |
|
Cash and cash
equivalents |
|
|
|
Beginning of period |
|
418,171 |
|
|
|
350,846 |
|
End of period |
$ |
293,793 |
|
|
$ |
418,171 |
|
The following table reflects the reconciliation of net loss to
Adjusted EBITDA for each of the periods indicated (in
thousands):
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Adjusted EBITDA
Reconciliation: |
|
|
|
|
|
|
|
Net loss |
$ |
(38,610 |
) |
|
$ |
(52,195 |
) |
|
$ |
(196,445 |
) |
|
$ |
(236,107 |
) |
Depreciation and amortization |
|
7,414 |
|
|
|
5,691 |
|
|
|
27,669 |
|
|
|
23,531 |
|
Interest income |
|
(1,831 |
) |
|
|
(116 |
) |
|
|
(3,191 |
) |
|
|
(365 |
) |
Interest expense |
|
2,458 |
|
|
|
6,157 |
|
|
|
10,472 |
|
|
|
21,531 |
|
Provision (benefit) for income taxes |
|
76 |
|
|
|
(27 |
) |
|
|
172 |
|
|
|
56 |
|
EBITDA |
|
(30,493 |
) |
|
|
(40,490 |
) |
|
|
(161,323 |
) |
|
|
(191,354 |
) |
Stock-based compensation(1) |
|
9,118 |
|
|
|
12,478 |
|
|
|
46,138 |
|
|
|
48,802 |
|
CEO separation benefits(2) |
|
46 |
|
|
|
— |
|
|
|
948 |
|
|
|
— |
|
CEO transition costs(3) |
|
533 |
|
|
|
— |
|
|
|
1,551 |
|
|
|
— |
|
Payroll tax expense on employee stock transactions |
|
39 |
|
|
|
201 |
|
|
|
451 |
|
|
|
1,168 |
|
Legal fees reimbursement benefit(4) |
|
— |
|
|
|
(704 |
) |
|
|
(1,400 |
) |
|
|
(1,204 |
) |
Legal settlements(5) |
|
— |
|
|
|
1,601 |
|
|
|
456 |
|
|
|
13,389 |
|
Restructuring charges(6) |
|
621 |
|
|
|
— |
|
|
|
896 |
|
|
|
2,314 |
|
Other (income) expense, net |
|
(38 |
) |
|
|
(1 |
) |
|
|
(171 |
) |
|
|
(23 |
) |
Adjusted
EBITDA |
$ |
(20,174 |
) |
|
$ |
(26,915 |
) |
|
$ |
(112,454 |
) |
|
$ |
(126,908 |
) |
(1) The stock-based compensation expense for the year ended
December 31, 2022 includes a one-time charge of $1.0 million
related to the modification of certain equity awards pursuant to
the terms of the transition and separation agreement entered into
with our founder, Julie Wainwright, in connection with her
resignation as Chief Executive Officer ("CEO") on June 6, 2022 (the
"Separation Agreement").
(2) The separation benefit charges for the year ended
December 31, 2022 consists of base salary, bonus and benefits
for the 2022 fiscal year, as well as an additional twelve months of
base salary and benefits payable to Julie Wainwright pursuant to
the Separation Agreement. In addition, see footnote 1 for
disclosure regarding the incremental stock-based compensation
expense incurred in connection with the Separation Agreement.
(3) The CEO transition charges for the year ended
December 31, 2022 consist of general and administrative fees,
including legal and recruiting expenses, as well as retention
bonuses for certain executives incurred in connection with our
founder's resignation on June 6, 2022.
(4) During the year ended December 31, 2022, we received
insurance reimbursement of $1.4 million related to a legal
settlement expense. During the year ended December 31, 2021,
we received insurance reimbursement of $4.3 million related to
legal fees for a certain matter, of which $3.1 million were applied
to legal expenses for the year ended December 31, 2021.
(5) The legal settlement charges for the year ended
December 31, 2021 reflects legal settlement expenses arising
from the settlement of a putative shareholder class action and
derivative case.
(6) The restructuring charges for the year ended
December 31, 2022 consists of employee severance payments and
benefits. The restructuring charges for the year ended December 31,
2021 consist of the costs to transition operations from the
Brisbane warehouse to our new Phoenix warehouse.
A reconciliation of GAAP net loss to non-GAAP net loss
attributable to common stockholders, the most directly comparable
GAAP financial measure, in order to calculate non-GAAP net loss
attributable to common stockholders per share, basic and diluted,
is as follows (in thousands, except share and per share data):
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net loss |
$ |
(38,610 |
) |
|
$ |
(52,195 |
) |
|
$ |
(196,445 |
) |
|
$ |
(236,107 |
) |
Stock-based compensation |
|
9,118 |
|
|
|
12,478 |
|
|
|
46,138 |
|
|
|
48,802 |
|
CEO separation benefits |
|
46 |
|
|
|
— |
|
|
|
948 |
|
|
|
— |
|
CEO transition costs |
|
533 |
|
|
|
— |
|
|
|
1,551 |
|
|
|
— |
|
Payroll tax expense on employee stock transactions |
|
39 |
|
|
|
201 |
|
|
|
451 |
|
|
|
1,168 |
|
Legal fees reimbursement benefit |
|
— |
|
|
|
(704 |
) |
|
|
(1,400 |
) |
|
|
(1,204 |
) |
Legal settlement |
|
— |
|
|
|
1,601 |
|
|
|
456 |
|
|
|
13,389 |
|
Restructuring charges |
|
621 |
|
|
|
— |
|
|
|
896 |
|
|
|
2,314 |
|
Provision (benefit) for income taxes |
|
76 |
|
|
|
(27 |
) |
|
|
172 |
|
|
|
56 |
|
Non-GAAP net loss attributable to common stockholders |
$ |
(28,177 |
) |
|
$ |
(38,646 |
) |
|
$ |
(147,233 |
) |
|
$ |
(171,582 |
) |
Weighted-average common shares outstanding used to calculate
Non-GAAP net loss attributable to common stockholders per share,
basic and diluted |
|
98,546,282 |
|
|
|
92,634,986 |
|
|
|
95,921,246 |
|
|
|
91,409,624 |
|
Non-GAAP net loss attributable to common stockholders per share,
basic and diluted |
$ |
(0.29 |
) |
|
$ |
(0.42 |
) |
|
$ |
(1.53 |
) |
|
$ |
(1.88 |
) |
The following table presents a reconciliation of net cash used
in operating activities to free cash flow for each of the periods
indicated (in thousands):
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash used in operating
activities |
$ |
3,698 |
|
|
$ |
(18,764 |
) |
|
$ |
(91,557 |
) |
|
$ |
(142,151 |
) |
Purchase of property and equipment and capitalized proprietary
software development costs |
|
(10,667 |
) |
|
|
(9,679 |
) |
|
|
(36,922 |
) |
|
|
(47,437 |
) |
Free Cash Flow |
$ |
(6,969 |
) |
|
$ |
(28,443 |
) |
|
$ |
(128,479 |
) |
|
$ |
(189,588 |
) |
Key Financial and Operating Metrics:
|
December 31,2020 |
|
March 31,2021 |
|
June 30,2021 |
|
September 30 2021 |
|
December 31, 2021 |
|
March 31,2022 |
|
June 30,2022 |
|
September 30,2022 |
|
December 31,2022 |
|
(In thousands, except AOV and percentages) |
GMV |
$ |
301,219 |
|
|
$ |
327,327 |
|
|
$ |
350,001 |
|
|
$ |
367,925 |
|
|
$ |
437,179 |
|
|
$ |
428,206 |
|
|
$ |
454,163 |
|
|
$ |
440,659 |
|
|
$ |
492,955 |
|
NMV |
$ |
223,390 |
|
|
$ |
244,162 |
|
|
$ |
256,509 |
|
|
$ |
273,417 |
|
|
$ |
318,265 |
|
|
$ |
310,511 |
|
|
$ |
332,508 |
|
|
$ |
325,105 |
|
|
$ |
367,382 |
|
Consignment Revenue |
$ |
61,285 |
|
|
$ |
64,887 |
|
|
$ |
72,452 |
|
|
$ |
78,373 |
|
|
$ |
86,508 |
|
|
$ |
83,989 |
|
|
$ |
96,917 |
|
|
$ |
93,874 |
|
|
$ |
110,199 |
|
Direct
Revenue |
$ |
15,512 |
|
|
$ |
23,735 |
|
|
$ |
22,460 |
|
|
$ |
29,387 |
|
|
$ |
45,262 |
|
|
$ |
48,823 |
|
|
$ |
42,646 |
|
|
$ |
34,005 |
|
|
$ |
33,252 |
|
Shipping
Services Revenue |
$ |
10,035 |
|
|
$ |
10,195 |
|
|
$ |
10,000 |
|
|
$ |
11,078 |
|
|
$ |
13,355 |
|
|
$ |
13,888 |
|
|
$ |
14,872 |
|
|
$ |
14,824 |
|
|
$ |
16,204 |
|
Number
of Orders |
|
671 |
|
|
|
690 |
|
|
|
673 |
|
|
|
757 |
|
|
|
861 |
|
|
|
878 |
|
|
|
934 |
|
|
|
952 |
|
|
|
993 |
|
Take
Rate |
|
35.7 |
% |
|
|
34.3 |
% |
|
|
34.5 |
% |
|
|
34.9 |
% |
|
|
35.0 |
% |
|
|
35.7 |
% |
|
|
36.1 |
% |
|
|
36.0 |
% |
|
|
35.7 |
% |
Active
Buyers |
|
649 |
|
|
|
687 |
|
|
|
730 |
|
|
|
772 |
|
|
|
797 |
|
|
|
828 |
|
|
|
889 |
|
|
|
950 |
|
|
|
998 |
|
AOV |
$ |
449 |
|
|
$ |
474 |
|
|
$ |
520 |
|
|
$ |
486 |
|
|
$ |
508 |
|
|
$ |
487 |
|
|
$ |
486 |
|
|
$ |
463 |
|
|
$ |
496 |
|
% of GMV
from Repeat Buyers |
|
82.4 |
% |
|
|
83.6 |
% |
|
|
84.5 |
% |
|
|
84.1 |
% |
|
|
83.8 |
% |
|
|
85.0 |
% |
|
|
84.7 |
% |
|
|
84.2 |
% |
|
|
84.0 |
% |
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