The RealReal, Inc.

Hello and welcome to the RealReal Q3 earnings call. We ask that you please hold all questions until the completion of the formal remarks, at which time you'll be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded. If you have any objections, please disconnect at this time. With that, I would like to turn the call over to Caitlin Howe, Senior Vice President of Finance.

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

Thank you, Caitlin. Good afternoon, everyone, and welcome to the RealReal's third quarter earnings conference call. Our strong third quarter results and our full year outlook for GMB of over $2 billion are a testament to our long-term strategy, which has solidified our position as the market leader in luxury resale. We are changing the way people shop, making resale a primary option. 58% of shoppers prefer the secondary market outright, and 47% of shoppers now consider resale value before buying something new. Resale is no longer reacting to the fashion industry, but driving it. In fact, Vogue used search on The RealReal as a key metric for brand heat in their coverage of the new creative director debuts during the fall fashion shows. Our proprietary data allows us to identify and respond to what buyers want ahead of the cycles. Insights from our recent resale report, which analyzes shopping and consignment behaviors across our community of over 40 million members, include the following. Fine jewelry has been our fastest-growing category. First-time watch buyers increased 46% with heritage brands leading the way. Customers are turning to us for major life milestones, evidenced by search volume up 247% for wedding dresses. In handbags, shoppers are embracing the lived-in look with searches for fair-conditioned handbags up 32%. And finally, rising acceptance of luxury resale is fueling the adoption of secondhand and holiday gifting. Turning to Q3 results, we delivered accelerating growth and expanded margins. We set a new record on quarterly GMV with third quarter GMV of $520 million, up 20% versus Q3 of last year. And we delivered adjusted EBITDA of $9.3 million or 5.4% of total revenue, up 380 basis points year over year. Let's discuss how our three strategic pillars, Growth Playbook, Operational Efficiency, and Obsessed Over Service are fueling these strong results. Diving into the Growth Playbook, our sales team is unlocking high-quality supply through data and deep consigner relationships. Q3 2025 was the first full quarter with our new compensation plan rolled out to the entire sales team. The plan's design focuses on value over unit volume. In addition, tools like Smart Sales are enabling our sales team to unlock supply using AI and data. Productivity increased with supply value per existing luxury manager up 12% year-over-year. Sales team tenure reached an all-time high in Q3 with more than half of the sales team in place for over two years. and we added top talent to the ranks of our sales team, laying the foundation for deeper relationships with our sellers. With a total addressable market of over $200 billion of untapped supply in U.S. closets, we see a long runway ahead to drive top-line growth. Through sales, real partners, our affiliate program, Real Friends, which is our referral program, and the continued expansion of Dropship, we will continue to unlock supply in the coming years. Turning to marketing, our efforts are focused on scaling our active consigner base and reinforcing our brand authority. In Q3, we grew new and repeat consigners double digits year over year. Trailing 12-month active buyers increased to reach an all-time high of over 1 million. And new buyer LTV is trending higher with average order value and 12-month lifetime value expanding. From a strategic perspective, we're focused on attracting flywheelers, or customers who participate in both sides of our marketplace. These flywheelers are two to three times more valuable and transact with us more frequently, accelerating the network effects of our platform. Looking forward to 2026, we are seeing green shoots in our marketing efforts. Our focus is on pursuing an AI-fueled smart engine to increase our LTV. Our smart prospecting engine aims to enhance targeting of new consignors. Building on our success in social, we are developing a 360-degree presence that combines organic and paid social media to propel brand relevance and digital performance. Early test results are positive. Our retail stores and high-value events work in concert with our marketing and sales team, generating desirable supply and new consignors. In fact, 25% of new consignors come from our stores. Consignors can interact with our in-store experts, gemologists, urologists, and handbag experts, who provide specialized valuations that build trust with prospective sellers. We are seeing success with introducing high-value experiential events in our retail stores. Q3 set new records. Newport Beach in Tyson's Corner unlocked $2.6 million of supply over just a couple of days. We currently have 18 brick-and-mortar locations, and we plan to add one to three stores per year, giving us a 10-year runway of growth from new stores. Moving to our next strategic pillar, driving operational efficiencies. Athena, our proprietary AI enabled product intake process, is delivering efficiency and reducing costs while improving speed and accuracy. As of the end of Q3, the Athena intake process touched 27% of all items, and we are on track for 30-40% by year end. Our future vision is to achieve full listing automation and reduce our processing time from 14 days to our goal of 7 days. In the next phase of Athena, we plan to expand into mid and high value items with the opportunity to save millions of dollars while delivering superior service and speed for our sellers. Turning to our third strategic pillar, obsessing over service is the secret sauce that reinforces our deep customer loyalty. In Q3, our customer trust metric increased eight points year over year. The customer is evolving rapidly, and we are listening. When I think about our strategic vision, I think of us as an advisor to our customers, a real partnership built on trust, transparency, and personalized communication. By helping our customer manage the luxury assets in their closet, this partnership is not just transactional, but is defined by a deep understanding of our customer's financial motivations, fashion sense, and individual style. We look to accompany them on their journey through the primary and secondary market. Last quarter, we introduced the concept of My Closet through Reconsign, which allows our consignors to resell items they purchased on the RealReal in one click. Looking to the future, My Closet is creating additional customer tools to help catalog closet inventory, enhance access to product insights, and provide personalized advising. We see flywheel behavior becoming the norm as our service moves past simply buying and selling, offering ways to optimize and manage the contents of the fashion portfolio. In closing, Q3 was a strong quarter. Our performance across all key metrics and the trends we are seeing in the business gives us confidence to raise our full year guidance. As I reflect in the last year, four quarters of progress since I stepped into the CEO role, I am incredibly proud of the RealReal team and the significant transformation we've achieved. We believe we have proven that our growth playbook works, our model is scalable, and the superior service drives our powerful flywheel. I want to thank the entire RealReal team for their unwavering commitment to our customers and for executing with excellence this quarter. I couldn't be more excited about where the RealReal is headed. We've built a strong foundation, we're seeing great momentum, and I believe the best is yet to come. I will now turn the call over to Ajay for a more detailed review of our financial performance.