The RealReal, Inc.

What they do

The company operates an online marketplace plus retail stores that sell primarily pre-owned luxury goods consigned by individuals and businesses. It authenticates and inspects consigned items, retains a take rate on sales, and also earns revenue from direct sales, shipping fees, and its First Look subscription program. It serves over 40 million registered members as of June 30, 2026, across women's and men's fashion, fine jewelry, and watches.

Revenue drivers

• Consignment revenue — Largest revenue source; company retains a take rate on goods sold for consignors. Take rate was 35.9% in Q2 2026, down from 37.9% a year earlier due to sales mix into higher-value items.
• Direct revenue — Generated when the company takes ownership of goods from out-of-policy returns or direct purchases and keeps 100% of proceeds on resale. Grew 26% year-over-year in Q2 2026.
• Shipping services revenue — Fees charged to buyers for outbound shipping and handling, and for in-policy returns of consigned products.
• First Look subscription — Monthly fee program giving buyers early access to items; part of consignment and other services revenue.

Recent performance

Second quarter 2026 GMV reached a record $617 million, up 22% year-over-year, marking the fourth consecutive quarter of GMV growth above 20%. Total revenue was $193 million, up 17%, with consignment revenue up 15% and direct revenue up 26%. Gross margin was 74.4%, up 10 basis points, and Adjusted EBITDA was $13.5 million, or 7.0% of revenue, up 290 basis points. Net loss was $(27) million, or (14.1)% of revenue, including an $(18.6) million non-cash warrant liability fair value adjustment. Trailing twelve months active buyers rose 11% to 1,107,000 and average order value rose 13% to $659.

Strategy

The company executes against three strategic pillars: unlocking supply through its growth playbook, driving operational efficiency aided by technology and automation, and obsessing over service for buyers and consignors. It invests in its technology platform, logistics infrastructure, and authentication operations to strengthen a network effect where consignors and buyers drive each other. It operates neighborhood retail stores of roughly 1,800 to 3,500 square feet and flagship stores in San Francisco, Los Angeles, and New York of about 8,000 to 10,000 square feet to reach higher-value consignors and buyers. Management views 2026 as a year when its advantages begin to compound, citing supply trends and durability of growth.

Risks

• History of losses — The company has a history of losses and may not achieve or maintain profitability, and it carries negative shareholder equity of $(377.7) million as of June 30, 2026.
• Supply acquisition — The company may not obtain sufficient new and recurring supply of pre-owned luxury goods or attract and retain talented sales professionals, which would limit growth.
• Consumer discretionary demand — Revenue depends on consumer discretionary spending, which is adversely affected by economic downturns and macroeconomic conditions.
• Authentication and trust — Success depends on the accuracy and reliability of authentication processes, and failures could harm buyer trust and brand.

Outlook

Management raised full year 2026 guidance, expecting GMV of $2.535 to $2.565 billion, total revenue of $788 to $797 million, and Adjusted EBITDA of $66.0 to $69.0 million. For Q3 2026, guidance is GMV of $610 to $620 million, total revenue of $194 to $198 million, and Adjusted EBITDA of $13.5 to $14.5 million. Management said it enters the second half from a position of strength with momentum in its flywheel. Forward-looking Adjusted EBITDA is not reconciled to net income due to unpredictable items such as payroll tax expense on employee stock transactions.