The RealReal, Inc.

Thank you for standing by. My name is Liz, and I'll be your conference operator today. At this time, I would like to welcome everyone to the RealReal Second Quarter 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Kaitlyn Howe, Senior Vice President of Finance. Please go ahead.

Thank you, operator. Joining me today to discuss our results for the period ended June 30, 2025, our Chief Executive Officer and President, Rossi 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-GAP financial measures, both historical and forward-looking. We have provided reconciliations for historical non-GAP financial measures to the most comparable GAP measures in our earnings press release, which is available on our investor relations website. I would now like to turn the call over to Rossi Levesque, Chief Executive Officer of the RealReal.

Thank you, Kaitlyn. Good afternoon, everyone. I'm pleased to review our second quarter 2025 results. Q2 was a breakout quarter for the RealReal. We demonstrated progress while further validating the success of our strategic roadmap. Our strong Q2 performance was highlighted by 14% top-line growth, coupled with adjusted EBITDA above expectations. These results were driven by our clear strategic vision, innovative mindset, and unique position in a growing category. We are fundamentally changing the way people shop, and we are at a pivotal moment, not just as a company, but as a category leader. Before diving into this quarter's highlights, I'll take a moment to explain more about what changing the way people shop means to us. For the past 14 years, we've been ahead of the curve, making luxury resale desirable and accessible. Now, the circular economy is on the rise. We are not only leading the cultural shift in luxury resale, we are also helping to define it. Our operating and consumer expertise and growing brand affinity drives our market leadership. Our operating and consumer expertise is showcased in our world-class authentication, which has been the cornerstone from day one, creating trust with our customers. Our growth playbook centers on a scalable supply engine and helps us forge enduring relationships with our sellers. And our powerful brand attracts customers across the generational spectrum. With 53% of our customers being millennial and Gen Z, all of these are underpinned by our data-driven intelligence, from authentication to pricing to our smart sales and smart process engines. We are leveraging AI to drive efficiency, scalability, and user engagement. Today's modern consumer is embracing the circular economy and approaching luxury resale as an option of first resort, not last. Our customers view their closet as an investment that retains value. In fact, 47% of our consumers consider the resale value of -to-wear items before making a purchase. The RealReal helps our sellers unlock that value and allows them to reinvest in other pieces, changing the way they shop on multiple fronts, prioritizing uniqueness, circularity, and financial savvy. This quarter's results affirm our strong brand affinity and cultural relevance, positioning us for sustained growth improved profitability, and consistent cash flow. Looking at the numbers for Q2, we delivered record GMB at $504 million and record revenue of $165 million, both up 14% year over year. Adjusted EBITDA was $6.8 million, a .1% margin, which is a substantial beat versus expectation. This performance was underpinned by record new consignors, double-digit growth for the second quarter, in a row, and our highest number of new consignors ever. We're encouraged by this trend, which has continued into Q3, as new consignor growth is a leading indicator for supply. Based on our second quarter results and the momentum we are seeing in the business, we are raising our full year outlook. Through strong execution across our strategic pillar, unlocking supply through our growth playbook, driving operational efficiency, and obsessing over service, we are fueling top-line momentum and powering our profitability. The first pillar, our growth playbook, is focused on three key areas, sales, marketing, and stores. The new sales team compensation plan has been fully implemented and emphasizes retail value rather than simply unit targets. This means we are delivering even more of the goods and brands buyers want. The key areas of our growth playbook amplify one another to generate supply. Our season sales team has been collaborating with our store team on experiential pop-up events, like a recent event, Newport Beach, which unlocked $800,000 of supply, and another at a Chicago store, which brought in $500,000 in a single day. These events generate excitement, brand energy, and incremental high-value supply. We're also making it simpler for those who already know and love us to engage on the platform. Our new reconfine program makes it easy for our existing repeat consigners to add items they've previously bought from us back to their sell list. This provides a seamless, convenient way to reengage with our platform, creating a circular loop for luxury assets. Reconsigned strengthens our supply and is performing well, increasing new opportunities, and accelerating the flywheel. On the supply innovation front, we're progressing with our dropship initiative. Building on the success in watches and handbags, we are expanding dropship to fine jewelry and Q3. In the back half of this year, we plan to partner with larger luxury good aggregators and international vendors. While still early days, we are confident in dropship and its ability to drive incremental supply. Within the second pillar of driving operational efficiency, AI and automation are central to our efficiency gains. Our new product intake process, Athena, is now touching approximately 20% of all units, and we are on track to reach 30 to 40% by end of year. Our next phase will focus on enabling listing automation, enhancing search through AI, and further reducing manual processes. Through our AI and automation efforts, we are increasing efficiency and accuracy, reducing processing time, and we are on track to cut multiple dollars from our processing cost per unit over the medium term. Authentication is a differentiator that sets us apart. We set the industry standard for luxury goods authentication, and we continue to raise the bar. We actively collaborate with law enforcement and government agencies to address the issue of counterfeiting within luxury. Since our inception, we've kept over one quarter of a million fakes off the market. With proprietary technology like Vision Shield and now Athena, we are the definitive authority on what is real as we combine our extensive data, AI capabilities, and authentication expertise. Going forward, we believe Athena will continue to elevate our authentication process, in particular driving speed and efficiency while reinforcing the rigorous accuracy that defines our approach. Touching briefly on our third strategic pillar, obsessing over service. Innovation is key as we elevate both the seller and buyer journeys on our platform. During Q2, we made a number of enhancements to our consigner page, all aimed at improving transparency in the consignment process and reinforcing trust with our sellers. Furthermore, in July, we launched a new price history feed, which is currently in a phased rollout. This provides consignors with simple, timely, and actionable insights to maximize their earnings. We are also building toward an extension of our platform called My Closet, a digital catalog of luxury items allowing sellers to keep up on market insight and luxury managers to give proactive consignment recommendations. On the buyer side, we are working to elevate the shopping journey. In the coming quarters, we look forward to releasing features like visual and conversational search powered by AI to make it effortless for buyers to discover items they love. Our relentless focus on innovation will help us continue to meet and anticipate the evolving needs of our discerning customers. In closing, there's a rising tide in luxury resale that we've helped to pioneer. Now we're capitalizing on it and accelerating it. Resale is a smart choice for a luxury minded consumer and price increases in the primary market due to tariffs or other factors make our value proposition even more compelling. Our business is fueled by the vast pool of luxury items currently sitting in domestic closets. A large and growing cam of over $200 billion that our growth playbook is designed to effectively tap into. Our disciplined approach to operational execution and unlocking supply, driving efficiency and obsessing over service creates a powerful flywheel that fuels our growth. We lead with vision, authenticity and a relentless commitment to excellence. The market is ready, the customer is ready and we are more ready than ever to embrace the moment and define the next era of luxury resale. With that, I'll turn the call over to Ajay.