RealReal (REAL -2.18%), a leading online platform for authenticated luxury consignments, reported earnings on August 7, 2025. It delivered GAAP revenue of $165 million, topping analyst expectations of $159.7 million. Adjusted earnings per share (Non-GAAP) landed at $(0.06), a substantial improvement over the $(0.09) consensus estimate and the GAAP diluted net loss per share of $(0.13) in Q2 2024. These results were supported by gains in active buyers, margin expansion, and a return to positive adjusted EBITDA after a loss in the prior year’s quarter. Despite persistent negative free cash flow, the quarter was marked by outperformance on key metrics and raised full-year guidance.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.06) | $(0.09) | $(0.13) | 53.8 % |
| Revenue (GAAP) | $165 million | $159.7 million | $144.9 million | 14.0 % |
| Adjusted EBITDA | $6.8 million | $(1.8) million | N/M | |
| Gross Margin | 74.3 % | 74.1 % | 0.2 pp | |
| Active Buyers (TTM) | 1,001,000 | 942,000 | 6.3 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Snapshot and Key Success Factors
RealReal operates an online marketplace that connects consignors of high-end goods with buyers seeking luxury fashion, handbags, jewelry, and art. Its core value proposition rests on authenticating every item, using specialized staff and technology to ensure the quality and legitimacy of each product sold on its platform.
The company’s success depends on several interlocking elements. Chief among these is its network effect: more consignors listing luxury goods attract more buyers, which encourages even more people to sell, creating a virtuous cycle. RealReal's rigorous authentication process builds trust—critical in combating the risk of counterfeit items. Technology and data analytics power pricing, inventory management, and operational efficiency, while sustainability and a circular economy message align the company with environmentally-minded consumers. Finally, its omni-channel presence—combining an e-commerce platform with select physical retail locations—broadens access and promotes both supply and demand.
Quarter Highlights: Revenue Growth, Operational Progress, and Platform Expansion
During the quarter, RealReal’s results outpaced both expectations and prior-year metrics, with GAAP revenue of $165 million and non-GAAP EPS of $(0.06), both exceeding analyst estimates. Revenue (GAAP) increased 14%, exceeding the analyst consensus, as up 14% from $440.9 million in Q2 2024. This top-line strength reflected steady growth in key operating segments:
Consignment revenue, the company’s main line generated from selling client-owned goods, climbed 14% to $128.6 million. Direct revenue, which is generated from purchases the company makes from sellers willing to be paid upfront, rose 23% to $20.5 million. Shipping services revenue contributed $16.1 million. Repeat consignors continued to drive supply, responsible for more than 80% of GMV in 2024. The average order value increased 8% to $581. Active buyers in the trailing twelve months rose 6% to 1,001,000, with orders totaled 868,000.
Gross margin improved to 74.3%, up 0.2 percentage points from Q2 2024. The company attributed this margin expansion to its use of automation and artificial intelligence tools—such as Athena for product intake and algorithmic pricing—which streamline operations and optimize sales. Adjusted EBITDA reached $6.8 million, swinging from a loss a year earlier. This improvement reflects increased operating efficiency. Operating expenses as a percentage of revenue continued to trend lower due to automation initiatives and disciplined marketing spend.
Several key initiatives supported ongoing momentum. “Get Paid Now,” a program allowing immediate payment to sellers of certain high-end categories, continued to grow as a source of profitable direct revenue. The Real Partners and Real Friends referral programs contributed to higher supply by encouraging stylists and closet organizers to bring new clients onto the platform. Drop ship, which lets business partners list their stock and have RealReal fulfill orders after post-purchase authentication, expanded from watches to include handbags.
Technology remained central. Management emphasized that AI-enabled tools are now responsible for an increasing share of intake and operational throughput. According to company statements, automation and data analytics helped reduce product processing times and support margin gains. The company also maintained its focus on building customer trust through stringent authentication, citing its team of expert gemologists, horologists (watch specialists), and brand authorities. Consistent execution of this process is key for sustaining repeat buyer business and protecting the brand's reputation.
The company did not declare or adjust a dividend and does not currently pay a dividend.
Looking Ahead: Guidance and Investor Focus Areas
Management raised its forward guidance for Q3 and full year 2025, reflecting strong recent performance and ongoing momentum. For the third quarter of fiscal 2025, the company projects GMV between $495 and $502 million, GAAP revenue between $167 and $170 million, and adjusted EBITDA (non-GAAP) of $6.1–$7.1 million. For the full fiscal year, the updated outlook calls for GMV of $2.030–$2.045 billion, GAAP total revenue of $667–$674 million, and adjusted EBITDA (non-GAAP) of $29.0–$32.0 million. These figures represent meaningful increases over prior guidance, which targeted full-year revenue at $645–$660 million and adjusted EBITDA (non-GAAP) at $20–$30 million.
Investors should keep a close watch on cash flow trends, as Free cash flow (non-GAAP) remained negative at $(15) million and cash balances declined to $94.3 million. Management highlighted ongoing improvements in operational efficiency and profitability. The company remains exposed to swings in luxury category demand and competitive pressures in luxury resale, though AI-powered pricing and new supply channels may help offset these risks.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
