The RealReal raises outlook as Q3 revenue reaches $206 million

Third-quarter revenue reached $206 million

The RealReal Inc. reported third-quarter revenue of $206 million for the period ended Sept. 30, a 19% year-on-year increase that exceeded the 13.4% growth analysts expected, according to Yahoo Finance.

Gross merchandise volume reached $642 million, up 23%. Adjusted EBITDA rose 83% to $17 million, while adjusted earnings per share reached 2 cents. Wall Street had expected adjusted earnings per share to remain flat.

The stock stood 28% lower for the year at the close. It then rose 5.3% to $11.95 in after-hours trading as investors responded positively to the quarterly figures.

The performance arrived as large luxury houses also benefited from the relative strength of the American market. For The RealReal, growth came from the secondhand market for high-end goods, where the company operates an online resale marketplace.

What did buyer activity show?

The company counted 1.2 million active buyers over the past 12 months, up 13%. Average order value rose 8% to $629.

Those figures show simultaneous expansion in buyer participation and order size, but they do not separate new buyers from repeat buyers or price increases from product mix, leaving two important demand questions unanswered for brand and marketplace partners.

Gross merchandise volume grew four percentage points faster than revenue. The report offers no take rate, gross-margin bridge or inventory-cost detail, so brands cannot treat 23% GMV growth as 23% profit growth.

For fashion brands monitoring resale channels, the figures establish a 1.2 million-buyer marketplace. The reported data does not state who owns inventory, who funds markdowns or how returns affect net margin.

What did Levesque say drove the record?

Rati Levesque, chief executive officer, called the results “another record quarter,” citing record highs in revenue and GMV.

“Underlying those results is a fundamental change in how people shop for luxury fashion, and our purpose-built platform is helping to drive it,” Levesque said. “Customers increasingly start their journey with us and engage well beyond the transaction, to discover what to buy, to track what they own, and to decide when to sell.”

“That is the new operating system for luxury fashion ownership, and that is what we are building,” she said. “Our performance this quarter reinforces our conviction in the direction of the business and our ability to execute, and we are raising our full-year outlook.”

Levesque described a structural shift in luxury fashion ownership. The figures support record revenue and higher average order values, but they do not quantify engagement outside individual transactions. Her platform language remains a management characterization rather than a separately reported metric.

What changes in the raised outlook?

The company now expects full-year revenue of $806 million to $810 million, raised from $788 million to $797 million. Adjusted EBITDA guidance increased to $71.1 million to $72.6 million from $66 million to $69 million.

These remain management forecasts, not booked revenue or reported earnings. For commercial partners, the higher targets raise the question of whether The RealReal can sustain 23% GMV growth while delivering its adjusted EBITDA guidance. The company gave no revised take-rate, cost or unit-volume assumptions.

The RealReal’s launch was described as “an earthquake of an idea.” The business has made several course corrections over the years, and now appears to be finding a rhythm.

Who is Alexis Hoopes?

The company named Alexis Hoopes chief merchandising officer this week. She joins after leading eBay’s $10 billion global fashion business as vice president and general manager of global fashion.

Earlier, Hoopes served as senior vice president of e-commerce at Mattel. In that role, she built the company’s direct-to-consumer business, launched two digital commerce platforms and integrated American Girl’s e-commerce operations.

Her appointment places fashion merchandising under an operator with scaled marketplace and digital-commerce experience. The announcement did not specify assortment priorities, financial targets, reporting lines or an exact start date.

The next test is whether The RealReal can sustain 23% GMV growth, deliver its raised $806 million-to-$810 million revenue outlook and meet the new $71.1 million-to-$72.6 million adjusted EBITDA target as Hoopes takes charge of merchandising.