The RealReal 2025 Q3 Earnings Revenue Rises 17.5% Despite Widening Losses

The RealReal (REAL) reported Q3 2025 earnings that exceeded revenue estimates while raising full-year guidance, though losses widened significantly. The company’s 17.5% revenue growth outperformed expectations, driven by strong consignment sales and GMV expansion. However, the net loss expanded to $54.05 million, reflecting ongoing operational challenges.

Revenue

The RealReal’s total revenue surged 17.5% year-over-year to $173.57 million, led by consignment revenue of $134.43 million. Direct revenue contributed $22.93 million, while shipping services added $16.22 million, rounding out the performance. The 15% increase in consignment revenue underscored robust demand, supported by a 46.8% jump in direct sales.

Earnings/Net Income

Despite the revenue boost, the EPS of -$0.49 significantly deepened the loss, signaling ongoing financial challenges. The net loss widened to $54.05 million, a 201.3% increase from the prior year, as the company set a new record for fiscal Q3 net income—a paradoxical “high” in losses over eight years.

Price Action

The stock price of The RealReal surged 13.91% during the latest trading day, with momentum accelerating to a 38.34% gain over the past week and a 63.81% rally month-to-date. This post-earnings rally reflected optimism around the company’s guidance raise and strategic initiatives, though the underlying financials remain a concern.

CEO Commentary

CEO Rati Levesque emphasized a 20% GMV growth and 5.4% Adjusted EBITDA margin, exceeding expectations. Strategic priorities include unlocking supply, enhancing operational efficiency, and leveraging AI to improve customer trust. Levesque expressed confidence in raising full-year guidance and positioning the company to lead the luxury resale industry’s evolution.

Guidance

The RealReal raised 2025 full-year GMV guidance to $2.099–$2.109 billion and total revenue to $687–$690 million. Adjusted EBITDA is now projected at $37.7–$38.7 million. Q4 expectations include GMV of $585–$595 million and revenue of $188–$191 million, excluding unpredictable GAAP components.

Post-Earnings Price Action Review

The stock’s post-earnings surge was fueled by a combination of improved guidance and sector optimism, despite the company’s widening losses. A 13.91% single-day jump highlighted short-term investor confidence, while the 63.81% month-to-date rally suggested broader market enthusiasm for the luxury resale sector. However, analysts remain cautious, with average price targets implying a potential downside from current levels.

Additional News

Recent non-earnings developments include UBS raising its price target to $14 (a 33.33% increase) and BTIG lifting its target to $15 (36.36% increase), both maintaining “Buy” ratings. Additionally, CEO Rati Levesque sold 260,171 shares (a 12.6% stake reduction), raising questions about insider sentiment. Institutional ownership remains strong at 79.69%, but insider selling activity over the past three months totaled 462,745 shares.

Financial Health Analysis

The RealReal’s financials remain mixed, with a 74.65% gross margin offset by a -5.55% net margin. Liquidity metrics (current ratio of 0.8, quick ratio of 0.66) and a -2.12 Altman Z-Score signal distress risks. Analysts highlight the company’s strategic focus on AI and operational efficiency as potential catalysts but caution against high leverage and sector volatility.