The RealReal, Inc.

Good afternoon, everyone. My name is Lennius and I will be your conference operator today. At this time, I would like to welcome you to the RealReal fourth quarter 2025 earnings call. All lines have been placed on mute. After the speaker's remarks, there will be a question and answer session. At this time, 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 December 31st, 2025, our Chief Executive Officer and President, Ratsi 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-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, and good afternoon, everyone. Thanks for joining us as we discuss our fourth quarter and full year results. 2025 was a transformative year for The RealReal. We accelerated top-line growth throughout the year, culminating in exceptional fourth quarter performance. We delivered $616 million in GMB for the quarter, representing 22% growth while achieving an adjusted EBITDA margin of 11%. During the fourth quarter, we surpassed the $2 billion mark in GMB for the year, a milestone for The RealReal that gives us further confidence in our growth trajectory and our market leadership position. For the full year, we delivered $2.1 billion in GMB and our first year of positive adjusted EBITDA in every quarter, demonstrating our ability to scale profitably while maintaining strong momentum. Before Ajay walks you through our detailed results in a moment, let me provide some context. Our performance in 2025 is the result of years of laying the groundwork for the luxury resale market and refining our business model. We built a durable and hard-to-replicate foundation that uniquely positions us to lead and create long-term value. We are leading a fundamental shift in the luxury consumer's mindset. Our customers have begun to view their closets as a portfolio of assets to be tracked, actively managed, and eventually monetized. With 47% of all consumers considering resale value when making a purchase in the primary market, we are influencing the luxury consumer's behavior in a meaningful way. I see us becoming the personal advisor of the closet, providing tools, access to information, and curated insights. Today, we are blending uniqueness, quality, and depth with the commercial scale and accessibility that only the real real can offer. We are leaning into this vision through disciplined execution of our three strategic pillars. First, our growth playbook, which is how we unlock supply through meeting the customer where they are. Second, operational excellence, which is how we drive profitability. And third, obsess over service, where we up-level our experience. These efforts are underpinned by a foundational culture of trust with our community of over 40 million members. Diving into our growth playbook, our sales team, which we've built over the last 15 years, is a competitive differentiator that anchors our growth playbook. Our model combines art and science, deep personal relationships our team cultivates with consignors, accelerated by data and insights. Last year, we rolled out Smart Sales, our AI-enabled tool that automates lead scoring, ensuring our sales team is mobilized towards the highest value supply opportunities. In Q4, we launched a new tool for our sales team, which leverages our vast data and AI-led pricing algorithms to provide real-time valuation estimates. It allows for a more precise dialogue with consignors about their expected earnings and strengthens our position as a trusted advisor. Sales team tenure reached an all-time high in Q4, with 54% of our team at TRR for two years or longer. The longer a sales associate is with TRR, the more productive they become. On average, an experienced sales rep delivered approximately 20% more value than a first-year sales professional. Our marketing engine drives our sales execution. Active buyer growth accelerated in Q4 to 9% on a trailing 12-month basis. We aren't just finding shoppers, we are identifying future consignors. Our Q4 results highlight this flywheel in action. 40% of new consignors come from our existing buyer base. By turning buyers into sellers, we're acquiring supply more cost effectively while deepening the loyalty of our community. We accelerated new buyer growth in Q4 and we believe it's a positive catalyst for future supply. Through leveraging social channels and high impact creative, like our holiday influencer campaigns, we've energized our existing customers and attracted a new generation of luxury shoppers. Our second pillar, operational excellence, is centered on scaling our unique technology and operational advantages. Our current industry-leading authentication approach is the result of years of strategic development. To date, we've received 12 patents formally recognizing our innovations in luxury resale and positioning us to capitalize on AI as an enablement tool in authentication and pricing. We continue to lean into our authentication expertise through Athena, a proprietary AI-enabled intake process. Athena is designed to optimize the blend of human expertise and technology. By automating the repetitive, data-driven tasks, we are reducing costs and increasing speed to site. A core advantage of our model involves physical possession. When our experts have an item in hand, we verify details that cannot be captured digitally, like the weight of a gemstone or the texture of a fabric. The success of our approach is showing up in our results. We met our goal of exiting 2025 with 35% of all units fully flowing through Athena, a key contributor to the strong leverage we delivered in the quarter. Looking to the future, we are focused on further automation around listings and fulfillment to continue our progress on operational speed, accuracy, and efficiency. Our third pillar is obsessing over service, which is focused on up-leveling the experience for our customers. As you may recall, we introduced My Closet last year. The first phase was Reconsign, which provides a one-click consignment experience for items purchased on TRR's platform. The next step in the evolution of My Closet is customer tools to track and capitalize on the value of their closet. We're evolving our consigner interaction to make it less transactional and more relational and enduring. We are the trusted advisor for our customers as they journey through the primary and secondary luxury markets. Currently, we're testing app features that allow consignors to get on-demand valuation and earnings estimates and look forward to expanding MyCloset as we move through 2026. We are obsessing over service in other ways, including leveraging GenAI to transform how our members discover items on our platform. We've launched a new natural language search experience to make discovery more intuitive and are seeing encouraging results. The new search experience drove a notable improvement in new customer conversion during our test period. As we look out through 2026, we will expand these capabilities further, starting with AI recommendations in the near term, followed by visual and agentic conversational search to further create a hyper-personalized, high-end shopping experience. In closing, we've proven that our growth playbook is working. By integrating our team's deep expertise with our industry-leading technology, we're building an engine that is designed to scale, win, and deliver lasting value. I want to thank our team across the country and our more than 40 million members. The trust you place in us is our most valuable asset. Looking forward, we're excited to continue to drive results together and delivering on our mission to be the definitive authority in luxury resale. Thank you. With that, I'll turn the call over to Ajay.