The RealReal, Inc.

Good day and thank you for standing by. Welcome to the RealReal Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Caitlin Howe, Senior Vice President of Finance. Please go ahead.

Thank you, Operator. Joining me today to discuss our results for the period ended June 30th, 2024, our Chief Executive Officer, John Corral, President and Chief Operating Officer, 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 and 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, for which historical financial measures we have provided reconciliations to the most comparable GAAP measures in our earnings press release. In addition to the earnings press release, we issued a shareholder letter earlier today, both of which are available on our investor relations website. I WOULD NOW LIKE TO TURN THE CALL OVER TO JOHN CORRALL, CHIEF EXECUTIVE OFFICER OF THE REAL REAL.

THANKS, CAITLIN, AND WELCOME TO OUR EARNINGS CALL. TODAY WE REPORTED FINANCIAL RESULTS FOR Q2 AND THE FIRST HALF OF 2024. WE DELIVERED ANOTHER STRONG QUARTER WITH ACCELERATED YEAR-OVER-YEAR GMV GROWTH AND DOUBLE DIGIT REVENUE GROWTH. OUR FOCUS ON THE CONSIGNMENT BUSINESS RESULTED IN A 17% YEAR-OVER-YEAR INCREASE IN CONSIGNMENT REVENUE IN THE SECOND QUARTER. Active buyers on a trailing three-month basis grew 9% compared to the same period in 2023. In addition to growth, we significantly improved our bottom line results. In the second quarter, adjusted EBITDA was negative $1.8 million, an improvement of $21 million, and the 11th consecutive quarter of year-over-year improvement in adjusted EBITDA. In 2024, we returned to top line growth and the incremental revenue dollars flowed to our bottom line at a high rate. In the first half of 2024, we grew revenue by $16 million and improved adjusted EBITDA by $46 million compared to the prior year. We believe this demonstrates the success of our strategic initiatives, highlights the resilience of our business model, and positions us to capitalize on the expanding market for luxury resale. As I look ahead, we are focused on delivering sustained growth and expanding our margins. We believe sales, marketing, and stores are the engine powering the next chapter of our profitable growth. When these three areas work together, our sellers encounter a frictionless multi-channel experience. We will continue to refine our approach and identify attractive markets for new stores. We also see opportunities to drive incremental growth from new supply channels. In addition to growth, we are realizing operational efficiencies to drive profitability. We can leverage recent advancements in AI thanks to 13 years' worth of data on 40 million luxury items. Our approach to continuous improvement and measured investments is paying off. Today, we provided Q3 2024 guidance and updated our full-year guidance. We increased the midpoint of our full-year adjusted evento range and we are now guiding to positive adjusted EBITDA for full year 2024. I am truly excited about the momentum in our business. As the leading marketplace for authenticated luxury goods, we are playing to our strengths. We remain focused on core business growth, operational excellence, and exceptional service to drive profitability. With that, let's open the call for questions.