San Francisco, October 29th / PRNewswire / -- The RealReal, Inc. (Nasdaq ticker: REAL) – The world's largest certified second-hand luxury goods online marketplace – announced its financial results for the third quarter ending September 30, 2026, today. In the third quarter of 2026, total merchandise transactions ( GMV ) and total revenue increased by 23% and 19% respectively compared to the third quarter of 2025. Consignment revenue grew by 18% year-on-year, and direct sales revenue also increased by 19% year-on-year.

The gross margin for this quarter was 74.9%, an increase of 64 basis points compared to the same period in 2025. The adjusted EBITDA profit margin for the third quarter was 8.3%, up 290 basis points from the same period last year.

The RealReal CEO Rati Levesque stated: "The third quarter was yet another record-breaking quarter for The RealReal. Both GMV and revenue reached record highs for the quarter, with orders increasing by 15% year-on-year, representing the strongest quarterly order growth since 2022. At the same time, we managed to increase our EBITDA profit margin by 290 basis points. Moreover, earlier this month, we completed a key refinancing that extended the debt maturity structure and laid the foundation for continued deleveraging in the coming years."

Levesque added, "Behind these achievements is a fundamental change in the way people purchase luxury fashion, and the platform we have specifically built is driving this change. More and more customers start their shopping journey with us and continue to interact beyond the transaction, discovering what to buy, tracking what they own, and deciding when to sell it. This is the new operating system for luxury fashion ownership, and that's exactly what we are building. Our performance this quarter has strengthened our confidence in our business direction and execution capabilities, and we are raising our full-year outlook."

Key Points of the Third Quarter

• GMV amounted to 642 million US dollars, representing a 23% increase compared to the same period in 2025.
• Total revenue amounted to 206 million US dollars, representing a 19% increase compared to the same period in 2025.
• Gross profit amounted to $154 million, an increase of $25 million compared to the same period in 2025.
• Gross profit margin is 74.9%, an increase of 64 basis points compared to the same period in 2025.
• Net profit was 16 million US dollars, accounting for 7.8% of total revenue; in the same period last year, there was a net loss of 54 million US dollars, which accounted for 31.1% of total revenue. The net profit for the third quarter of 2026 includes a non-cash adjustment of 21.2 million US dollars due to changes in the fair value of warrant liabilities.
• After adjustment, EBITDA amounts to 17 million US dollars, accounting for 8.3% of the total revenue; in the same period last year, it was 9.3 million US dollars, accounting for 5.4% of the total revenue.
• The basic net income per share calculated according to GAAP is $0.13, compared to a net loss of $0.47 per share in the same period last year; the diluted net loss per share is $0.04, whereas in the same period last year it was $0.49 per share.
• Excluding GAAP, the basic and diluted earnings per share attributable to common stockholders were $0.02, compared to a net loss of $0.04 per share in the same period last year.
• In the past 12 months, there were 1.152 million active buyers, representing a year-on-year increase of 13%.
• The average order value ( AOV ) is $629, representing a year-on-year increase of 8%.

Guidelines for the Fourth Quarter of 2026 and the Full Year

Based on market conditions as of October 29, 2026, the company has raised its full-year guidance. In addition, the company has also provided guidance for the fourth quarter of 2026, GMV, total revenue, and adjusted EBITDA, where the adjusted EBITDA refers to non-GAAP financial indicators.

The company stated that it has not yet made adjustments to the most directly comparable indicator, which is the forward-looking adjusted EBITDA versus net profit (loss) GAAP, because the company is unable to predict the final outcomes of certain adjustment items with reasonable certainty. This includes factors such as payroll taxes related to employee stock transactions that are beyond the company's control, as well as other possible items that could arise without requiring undue effort. Consequently, the company is unable to assess the potential significance of this unavailable information, which may have a significant impact on future net profit (loss) amounts.

Live webcast and teleconference

The RealReal will hold a teleconference around 2:00 PM Pacific Time (5:00 PM Eastern Time) today to review the company's third-quarter performance. Live webcast of the teleconference and related materials can be obtained online at investor.therealreal.com. A replay of the live broadcast will also be available on the same website. To participate in the teleconference, please register through the following link:

https :// the-realreal-earnings-call-q3-2026.open-exchange.net / registration

Regarding The RealReal, Inc.

The RealReal is the world's largest certified second-hand luxury goods online marketplace, trusted by a community of 45 million members. The company offers a full-process consignment service covering fashion, high-end jewelry and watches, artworks, and home furnishings, allowing customers to buy and sell luxury goods effortlessly no matter where they are. By combining strict, expert-led certifications with artificial intelligence and proprietary technologies, the company optimizes operations and pricing while simplifying the customer experience. With 15 years of proprietary data and over 55 million sold items, The RealReal has become the preferred destination for modern second-hand luxury trade, redefining the lifecycle of luxury goods.

Forward-looking Statements

This press release contains forward-looking statements related to the future performance of The RealReal. These statements are based on the company's current expectations, projections, and assumptions and involve risks and uncertainties. In some cases, you may identify forward-looking statements through words such as "may," "will," "should," "can," "expect," "plan," "anticipate," "target," "consider," "project," "believe," "estimate," "predict," "intend," "potential," "continue," "sustain," or their negative forms, or other similar expressions. These statements include, but are not limited to, statements regarding future operating and financial results, including our strategies, plans, commitments, objectives, and purposes, especially in the context of uncertain macroeconomic trends, financial guidance, expected growth for 2026, the anticipated impact of generative artificial intelligence, as well as financial targets, objectives, and forecasts. Actual results may differ significantly from the predicted or implied results, and the reported results should not be considered an indication of future performance. Other factors that may lead to or contribute to such differences include, but are not limited to: our ability to successfully complete and achieve the expected benefits of the balance sheet strengthening plan, inflation, macroeconomic uncertainties, geopolitical instability, inability to sustain the supply of consigned goods, new product discounts in the market leading to pressure on consignment market pricing, inability to operate the goods sales and fulfillment business efficiently and effectively, labor shortages, and other reasons.

For more information that may affect the company's operating results, please refer to the company's most recent annual Form 10-K report as of December 31, 2025, as well as the "Risk Factors" and "Management's Discussion and Analysis of Financial Conditions and Operating Results" sections in subsequent Form 10-Q quarterly reports. These documents are available on the company's investor relations website https :// investor.therealreal.com or on the U.S. Securities and Exchange Commission website www.sec.gov. Readers should not rely excessively on the forward-looking statements contained in this press release, which are based on information available to the company as of the date of this release. The company does not assume any obligation to update such statements.

Non-GAAP Financial Indicators

To complement the unaudited and simplified financial statements prepared in accordance with generally accepted accounting principles (“GAAP”), this financial report press release, along with the accompanying tables and related earnings conference calls, include several non-GAAP financial indicators. These include adjusted EBITDA, the proportion of adjusted EBITDA to total revenue (“adjusted EBITDA margin”), free cash flow, non-GAAP net profit (loss) attributable to common shareholders, and non-GAAP net profit (loss) per share attributable to common shareholders, both basic and diluted. The company has provided a reconciliation table in this press release that shows these non-GAAP financial indicators versus the most directly comparable GAAP financial indicators.

The company does not recommend that investors consider these non-GAAP financial indicators in isolation, nor should they be used as a substitute for the financial information prepared according to GAAP. Investors should also be aware that the non-GAAP financial indicators used by the company may differ from those used by other companies, including those in the same industry, and the methods of calculation may also vary.

After adjustment, EBITDA has become a key performance indicator used by management to evaluate operational performance. Since the adjusted EBITDA facilitates a more consistent internal comparison of historical operational performance, the company uses this indicator as a tool for overall performance assessment, measuring the effectiveness of business strategies, and for business planning. The adjusted EBITDA may not be directly comparable to similar indicators used by other companies.

The company will define the adjusted EBITDA as net profit (loss) after deducting interest income, interest expenses, income tax provisions (benefits), depreciation, and amortization. Furthermore, it will exclude equity incentive expenses, employer payroll tax expenses related to employee stock transactions, gains from debt settlement, changes in the fair value of warrant liabilities, and certain one-time expenses. The employer payroll tax expenses related to employee stock transactions are associated with the attribution or exercise of relevant equity rewards and are influenced by the company's common stock price at the time of attribution, and may vary from period to period without being affected by the company's operating performance. The adjusted EBITDA has certain limitations, as this indicator excludes some expenses that are essential for the company's operations and have already been included in the operating statements. Therefore, it should not be considered a substitute for net profit (loss) or any other financial performance indicators calculated and presented according to GAAP.

In particular, when calculating the adjusted EBITDA and adjusted EBITDA profit margins by excluding certain expenses, it is helpful to compare operational performance over different periods; however, when excluding the impact of equity incentives and related employee stock transaction taxes, items that the company believes do not reflect core operational performance are also removed. Nevertheless, investors should understand that equity incentives and related tax expenses will be an important recurring expense in the company's operations and a significant component of employee compensation. Therefore, the company believes that the adjusted EBITDA and adjusted EBITDA profit margins provide useful information for investors and other stakeholders to understand and evaluate the business results, in the same manner as management and the board of directors do.

Free cash flow is a non-GAAP financial indicator, calculated by subtracting the net cash used for purchasing fixed assets and capitalizing proprietary software development costs from the net cash provided (used) by operating activities. The company believes that free cash flow is an important indicator of business performance, as it reflects the amount of cash generated by the company. Therefore, the company considers free cash flow to provide useful information for investors and other stakeholders to understand and evaluate operating results in the same manner as management does.

The net profit (loss) per share attributable to common shareholders, excluding GAAP, after basic and diluted earnings per share calculations, is a non-GAAP financial indicator. It is calculated by adding net profit (loss), stock-based incentive expenses, income tax provisions (benefits), employee stock transaction taxes, debt settlement gains, changes in the fair value of warrant liabilities, and certain one-time expenses, and then dividing by the weighted average number of outstanding shares. The company believes that making these adjustments before calculating the per-share amount for each reporting period allows for a more meaningful comparison of operating results across different periods.

The following table reflects the adjustment of net profit (loss) and adjusted EBITDA for the specified period (unit: thousand US dollars):

To calculate the net profit (loss) per share attributable to common stockholders, excluding GAAP, before and after dilution, the following is a reconciliation table between the net profit (loss) of GAAP and the net profit (loss) attributable to common stockholders, excluding GAAP. This represents the most directly comparable financial indicator GAAP (unit: thousand US dollars, excluding shares and per-share data):

The following table shows the adjustment between net cash provided (used) from operating activities and free (negative) cash flow for the period indicated (unit: thousand US dollars):

Key financial and operational indicators: