Rent the Runway, Inc.

Rent the Runway reported Q2 2026 net revenue of $97.7 million, up 20.8% year over year and 8.7% quarter over quarter. Gross profit margin was 36.1% versus 30.0% last year, a 609 basis point improvement. Adjusted EBITDA was $12.6 million, or 12.9% of revenue, versus $3.6 million, or 4.4%, in Q2 last year. Active subscribers ended the quarter at 140,826, down 3.8% year over year, while average active subscribers were 148,259, up 1.0%. For guidance, Q3 2026 revenue is expected to be $87 million to $90 million, implying flat to 3% growth year over year, and Q3 adjusted EBITDA is expected to be negative 3% to negative 6% of revenue. For full-year 2026, management reiterated double-digit revenue growth and adjusted EBITDA of 4% to 7% of revenue. Rental product investment is now expected to be $53 million to $55 million for FY2026, up from prior guidance of $45 million to $50 million but below FY2025's $75 million.

Teri Bariquit said the company is entering a new leadership phase with Paige Thomas becoming CEO on September 14, but emphasized that the strategy is already set and centered on the customer. She described Rent the Runway as a premium fashion service platform focused on total customer growth, profit expansion, and operational excellence. Her tone was confident and focused on execution, with the message that the company is simplifying priorities, concentrating resources on rental and selling, and building toward a clearer 2027 plan.

Dave Loretta highlighted clear financial improvement: revenue of $97.7 million, gross margin of 36.1%, and adjusted EBITDA of $12.6 million. He attributed the margin gains to lower product depreciation/revenue share costs and lower fulfillment expenses as a percentage of revenue, plus disciplined G&A control. He also noted year-to-date free cash flow of negative $21.6 million versus negative $32.9 million last year, and said liquidity improved through a $10 million term loan plus a planned $15 million rights offering backstopped by the same investor group.

This was a prepared remarks call rather than a detailed analyst Q&A segment, so the main discussion points centered on management commentary. The biggest issues raised were the slowdown in ending active subscriber growth, which management tied to stronger promotional activity last year, a higher pause rate this year, and reduced promotions in 2026. Management also addressed inventory and seasonality, saying Q3 EBITDA will be pressured by higher pause activity and more revenue-share inventory, while reserve orders and resale are expected to grow in the second half.