Raised Full-Year Outlook
Company increased full-year guidance: GMV to $2.42B–$2.47B (14%–16% growth), revenue to $770M–$784M (11%–13% growth), and adjusted EBITDA to $59M–$67M (implying ~8.1% margin at midpoint, ~200 bps improvement vs. 2025).
RealReal
· REAL
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- +3.71%
- Next Earnings Date:
- 2026-08-11
Earnings Call Sentiment
PositiveThe call emphasized strong, consistent top-line growth (GMV +24%, revenue +19%), expanding profitability (adjusted EBITDA margin +430 bps), higher buyer engagement and AOV gains, and concrete operational investments in AI and automation that should drive future efficiency. Management raised full-year guidance and described multiple execution levers (stores, sales team, MyCloset, Real Partners, Athena, automated storage) to sustain the flywheel. The main issues noted were mix-driven take-rate compression, a modest decline in gross margin, seasonal negative operating cash flow, and that international/drop-ship initiatives remain early-stage. Overall, positives around growth, margin expansion and execution materially outweigh the manageable near-term headwinds.
Company Guidance
Management raised full‑year 2026 guidance to GMV of $2.42B–$2.47B (14%–16% YoY), revenue of $770M–$784M (11%–13% YoY) and adjusted EBITDA of $59M–$67M (≈8.1% margin at the midpoint, ~200 bps improvement vs. 2025), while reiterating a medium‑term adjusted EBITDA target of 15%–20%; for Q2 2026 they guided GMV $590M–$600M (17%–19% YoY; ~32% on a 2‑year basis at midpoint), revenue $186M–$189M (13%–14% YoY) and adjusted EBITDA $11M–$12M (≈6.1% margin at midpoint, ~200 bps YoY expansion). These raises were supported by Q1 results and operating metrics: Q1 GMV $606M (+24% YoY, +32% 2‑yr), revenue $190M (+19% YoY), adjusted EBITDA $13.1M (6.9%, +430 bps YoY), trailing‑12‑month active buyers +10% YoY, AOV $646 (+15% YoY), blended take rate 36.4% (‑220 bps YoY) and $139M cash on hand.
Operational Automation and AI Progress
Investment in AI/automation including Athena intake system (targeting nearly 50% of items flowing through Athena by end of the year/2026), AI-powered image embedding for pricing, and an automated storage and retrieval system expected to increase capacity by ~35% at a fulfillment center.
Supply and Distribution Expansion
Stores continuing to drive higher-value supply (sellers who engage with stores deliver 40% more value); new store markets planned for 2026 (San Francisco, Boston). Growing drop-ship and vendor channels and early partner development in Italy, France and Japan.
Strong Platform Trust and Long-Term Positioning
Company highlighted network effects and customer loyalty: ~50% of customers are Gen Z and millennials; management has paid out >$6B to consignors over 15 years; 43% of new consignors in Q1 originated from active buyers, supporting the flywheel.
Strong Top-Line Growth (GMV and Revenue)
Q1 GMV of $606M, up 24% year-over-year and up 32% on a 2-year stacked basis; Total revenue of $190M, up 19% year-over-year. Consignment revenue +18% and direct revenue +26% year-over-year.
Improved Profitability and Margin Expansion
Adjusted EBITDA of $13.1M (6.9% of revenue), an increase of $9M versus prior year and margin expansion of ~430 basis points year-over-year. Operating expenses leveraged ~730 basis points as a percent of revenue.
Buyer Engagement and AOV Momentum
Trailing 12-month active buyers grew 10% year-over-year. Average order value increased to $646, up 15% versus last year, reflecting stronger demand for higher-value items.
Operator
Good afternoon, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to The RealReal First Quarter 2026 Earnings Call. [Operator Instructions] At this time, I would like to turn the call over to Caitlin Howe, Senior Vice President of Finance.
Caitlin Howe
Thank you, operator. Joining me today to discuss our results for the period ended March 31, 2026, are Chief Executive Officer and President, Rati Levesque; and Chief Financial Officer, Ajay Gopal. Before we begin, I would like to remind you that during today's call, we will make forward-looking statements, which involve known and unknown risks and uncertainties. Our actual results may differ materially from those suggested in such statements. You can find more information about these risks, uncertainties and other factors that could affect our operating results in the company's most recent Form 10-K and subsequent quarterly reports on Form 10-Q. Today's presentation will also include certain non-GAAP financial measures, both historical and forward-looking. We have provided reconciliations for historical non-GAAP financial measures to the most comparable GAAP measures in our earnings press release, which is available on our Investor Relations website. I would now like to turn the call over to Rati Levesque, Chief Executive Officer of The RealReal.
Rati Levesque
Good afternoon, and thank you for joining us on today's call. Q1 demonstrated the strength of our platform as our financial and operating results exceeded expectations. I'm very proud of the team's execution during the quarter. Q1 w...
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