10-Q · June 3, 2026
Rent the Runway reported Q4 2026 results with a total revenue of $92 million, reflecting a sequential increase from the previous quarter and showing growth compared to the prior year. The company reported a narrower net…
Earnings analysis · 10-Q
RENT earnings analysis
Filed September 11, 2026 · Our reading of the company's report
The latest report
Rent the Runway delivered strong top-line and gross-margin improvement in the second quarter, with revenue up 20.8% to $97.7 million and Adjusted EBITDA margin expanding to 12.9% from 4.4%. Net loss narrowed…
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Rent the Runway delivered strong top-line and gross-margin improvement in the second quarter, with revenue up 20.8% to $97.7 million and Adjusted EBITDA margin expanding to 12.9% from 4.4%. Net loss narrowed substantially, but the company remained loss-making and consumed $21.6 million of cash on an operating-plus-investing basis during the first six months. Liquidity, unresolved material weaknesses, litigation obligations, subscriber contraction, and continued leadership transitions offset the operating improvement.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.38
What stood out
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Revenue growth accelerated
Revenue rose 20.8% year over year to $97.7 million from $80.9 million. Subscription and Reserve rental revenue increased 21.1% to $83.8 million, driven by higher revenue per subscriber and average active subscribers.
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Gross margin improved materially
Gross profit increased to $35.3 million from $24.3 million, while gross margin expanded to 36.1% from 30.0%. Fulfillment expense declined to 24.1% of revenue from 27.8%, and rental product depreciation and revenue share declined to 39.8% from 42.2%.
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Operating leverage strengthened
Adjusted EBITDA increased to $12.6 million from $3.6 million, with Adjusted EBITDA margin expanding to 12.9% from 4.4%. Management attributed the improvement primarily to higher revenue and operating leverage.
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Net loss and interest burden declined
Net loss narrowed to $12.9 million from $26.4 million, and net loss margin improved to negative 13.2% from negative 32.6%. Interest expense declined to $0.2 million from $6.9 million following the recapitalization and debt amendments.
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Capital intensity moderated
Six-month cash consumption, measured as operating cash flow plus investing cash flow, improved to negative $21.6 million from negative $32.9 million. Rental product purchases declined to $27.7 million from $42.0 million.
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AI engagement shows early traction
AI-powered outfit generation was deployed to all customers by June 2026, with approximately 35% engagement; during the pilot, customers with the feature added items to their bags approximately 12% more often than customers without it.
What to watch
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Liquidity remains constrained
Cash and cash equivalents declined to $29.0 million from $50.4 million at January 31, 2026, while long-term debt increased to $157.5 million from $156.6 million. The company states there is no remaining borrowing availability under the New Credit Agreement, although it added $10.0 million of new term loans on September 1, 2026.
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Litigation settlement creates cash and dilution risk
The company recorded a $6.1 million securities litigation expense and agreed to a proposed settlement with total consideration of $9.0 million, comprising $6.0 million in cash and $3.0 million in Class A common stock, subject to final court approval.
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Material weaknesses remain unresolved
Disclosure controls were ineffective as of July 31, 2026 because material weaknesses remained unremediated. The identified IT-control deficiencies could result in misstatements affecting all financial statement accounts and disclosures.
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Active subscriber base contracted
Ending active subscribers declined 3.8% year over year to 140,826 from 146,373, driven primarily by a higher pause rate and fewer subscriber acquisitions. Management also states that the June 2026 shipping charge had a temporary negative impact on subscriber retention.
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Leadership transition execution risk
The company appointed Paige Thomas as CEO effective September 14, 2026, with a $650,000 annual salary and a target annual bonus equal to 100% of salary, following recent CEO and CFO transitions.
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Product revenue-share costs increased
Rental product depreciation and revenue share increased 33.4% for the six months to $81.9 million from $61.4 million, reaching 43.7% of revenue versus 40.8% a year earlier, primarily due to higher Share by RTR revenue-share expenses.
Management's outlook
The 10-Q does not provide new numeric revenue or EPS guidance. Management expects fiscal 2026 revenue to increase, technology and G&A expense ratios to decline, and marketing expense to increase in dollars but decline as a percentage of revenue. Prior quantitative outlook was disclosed in the earnings release rather than this filing.
Earlier filings 2
10-K · April 14, 2026
Rent the Runway positions itself as a subscription-first “Closet in the Cloud” with 143,796 active subscribers as of January 31, 2026 and subscribers driving 90% of total revenue in fiscal year 2025. The company has…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.