The RealReal, Inc. reported third‑quarter 2025 results that included a revenue of $173.57 million, up 17 % year‑over‑year, and an adjusted loss of $0.04 per share, beating the consensus estimate of a $0.06 loss. The company also posted a GAAP diluted net loss of $0.49 per share, largely driven by a $44 million warrant liability adjustment that widened the GAAP loss relative to the adjusted figure.
Revenue growth was powered by a 20 % increase in gross merchandise value (GMV) to $520 million, reflecting stronger demand for authenticated luxury goods. The direct‑sales segment grew 47 % and contributed a higher margin, while the consignment segment saw a 70‑basis‑point improvement in gross margin. The overall gross margin fell 60 basis points year‑over‑year because the mix shifted toward higher‑volume direct sales, which have lower gross margins than consignment sales.
Operating profitability improved on an adjusted basis, with adjusted EBITDA rising to $9.3 million and the adjusted EBITDA margin expanding 380 basis points to 5.4 % of revenue. The margin expansion was driven by cost efficiencies from the company’s AI‑driven intake process and a higher proportion of direct sales, which have lower fulfillment costs. The decline in gross margin is offset by the higher direct‑sales mix and the improved consignment margin, resulting in a net positive effect on adjusted profitability.
Management raised its full‑year revenue guidance to $687 million–$690 million, up from the prior $667 million–$674 million range, and projected fourth‑quarter revenue of $188 million–$191 million versus the consensus estimate of $179.61 million. The upward revision reflects confidence in sustained demand for luxury resale, the continued acceleration of GMV, and the effectiveness of the company’s growth playbook and operational efficiencies.
CEO Rati Levesque said the quarter “delivered another period of accelerating growth and expanded margins, driven by unlocking supply, improving operational efficiency, and enhancing customer service.” CFO Ajay Gopal added that the company’s “adjusted EBITDA of $9.3 million, or 5.4 % of revenue, expanded 380 basis points year‑over‑year, and free cash flow of $14 million” underscored the operational gains that support the raised guidance.
Investors reacted positively to the earnings beat and guidance, but the GAAP net loss and the warrant liability adjustment tempered enthusiasm. The market’s mixed reaction highlights the importance of distinguishing between adjusted and GAAP profitability when evaluating the company’s financial health.
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