Rent the Runway Inc

Previous wording

We give customers ongoing access to our “unlimited closet” — with thousands of styles by hundreds of designer brands — through our Subscription offering or the ability to rent a-la-carte through our Reserve offering. We also give our subscribers and customers the ability to buy our products through our Resale offering, which offers customers pre-loved styles from our closet at a discount to retail price, up to 90% off of designer retail value. These offerings allow us to engage and serve our subscribers and customers across diverse use cases from everyday life to special occasions. We have served approximately 3 million lifetime customers across all of our offerings and we had 175,087 ending total subscribers 1 (active and paused) as of July 31, 2024. We had 129,073 active subscribers as of July 31, 2024. The majority of our revenue is highly recurring and is generated by our subscribers. For the six months ended July 31, 2024 and 2023, respectively, 89% and 88% of our total revenue (including Reserve and Resale revenue) was generated by subscribers while they were active or paused.

Current wording

We give customers ongoing access to our “unlimited closet” — with thousands of styles by hundreds of designer brands — through our Subscription offering or the ability to rent a-la-carte through our Reserve offering. We also give our subscribers and customers the ability to buy our products through our Resale offering, which offers customers pre-loved styles from our closet at a discount to retail price, up to 90% off of designer retail value. These offerings allow us to engage and serve our subscribers and customers across diverse use cases from everyday life to special occasions. We have served approximately 3 million lifetime customers across all of our offerings and we had 174,511 ending total subscribers 1 (active and paused) as of October 31, 2024. We had 132,518 active subscribers as of October 31, 2024. The majority of our revenue is highly recurring and is generated by our subscribers. For the nine months ended October 31, 2024 and 2023, respectively, 88% and 88% of our total revenue (including Reserve and Resale revenue) was generated by subscribers while they were active or paused.

Previous wording

Restructuring charges for severance and related costs of $0.2 million were recognized during the six months ended July 31, 2024. No restructuring charges were recognized during the three months ended July 31, 2024. Restructuring charges of $2.0 million were recognized during the year ended January 31, 2024 and are reflected in Restructuring charges on our Condensed Consolidated Statements of Operations. We may incur additional restructuring charges in the future.

Current wording

Restructuring charges for severance and related costs of $0.2 million were recognized during the nine months ended October 31, 2024 and are reflected in Restructuring charges on our Condensed Consolidated Statements of Operations. No restructuring charges were recognized during the three months ended October 31, 2024. Restructuring charges for severance and related costs of $2.0 million were recognized during the year ended January 31, 2024 and were reflected in Restructuring charges on our Consolidated Statements of Operations. We may incur additional restructuring charges in the future.

Previous wording

The Company recorded asset impairment charges of $1.1 million during the quarter and year ended January 31, 2024 related to the discontinuation of a software implementation project in connection with the January 2024 restructuring plan. The charge was reflected in Loss on asset impairment related to restructuring on the Company’s Consolidated Statements of Operations.

Current wording

The Company recorded asset impairment charges of $1.1 million during the quarter and year ended January 31, 2024 related to the discontinuation of a software implementation project in connection with the January 2024 restructuring plan. The charge was reflected in Loss on asset impairment related to restructuring on our Consolidated Statements of Operations.

Previous wording

The January 2024 restructuring plan is expected to generate total annual operating expense savings of approximately $12 million, which primarily includes the reduction in force, with some open role closures/reduced backfills, and excludes potential hiring of new employees or other additions to the Company’s costs and expenses. The restructuring plan was substantially completed by the end of the second quarter of fiscal year 2024 and is expected to be fully completed by the end of the third quarter of fiscal year 2024.

Current wording

The January 2024 restructuring plan is expected to generate total annual operating expense savings of approximately $12 million, which primarily includes the reduction in force, with some open role closures/reduced backfills, and excludes potential hiring of new employees or other additions to the Company’s costs and expenses. The restructuring plan was substantially completed by the end of the second quarter of fiscal year 2024 and is expected to be fully completed by the end of the first quarter of fiscal year 2025.

Previous wording

Additional Key Fiscal Second Quarter and Recent Business Highlights:

Current wording

Additional Key Fiscal Third Quarter and Recent Business Highlights:

Previous wording

•Improved consumption of cash flows from operations plus cash flows generated (used) in investing of $6 million for the six months ending July 31, 2024, which is $24 million lower than the six months ending July 31, 2023 and $48 million lower than the six months ending July 31, 2022.

Current wording

•Improved consumption of cash flows from operations plus cash flows generated (used) in investing of $9 million for the nine months ending October 31, 2024, which is $38 million lower than the nine months ending October 31, 2023 and $61 million lower than the nine months ending October 31, 2022.

Previous wording

•129,073 and 137,566 ending Active Subscribers 2 (excluding paused subscribers), respectively, representing a change of (6)% year-over-year;

Current wording

•132,518 and 131,725 ending Active Subscribers 2 (excluding paused subscribers), respectively, representing growth of 1% year-over-year;

Previous wording

•137,455 and 141,393 Average Active Subscribers 3, respectively, representing a change of (3)% year-over-year;

Current wording

•130,796 and 134,646 Average Active Subscribers 3, respectively, representing a change of (3)% year-over-year;

Previous wording

•175,087 and 184,389 ending Total Subscribers (including paused subscribers), respectively, representing a change of (5)% year-over-year;

Current wording

•174,511 and 175,901 ending Total Subscribers (including paused subscribers), respectively, representing a change of (1)% year-over-year;

Previous wording

•Gross Profit was $32.4 million and $33.2 million, respectively, representing a gross margin of 41.1% and 43.9%, respectively;

Current wording

•Gross Profit was $26.3 million and $25.2 million, respectively, representing a gross margin of 34.7% and 34.8%, respectively;

Previous wording

•Net Loss was $(15.6) million and $(26.8) million, respectively. Net Loss as a percentage of revenue was (19.8)% and (35.4)%, respectively; and

Current wording

•Net Loss was $(18.9) million and $(31.5) million, respectively. Net Loss as a percentage of revenue was (24.9)% and (43.4)%, respectively; and

Previous wording

•Adjusted EBITDA was $13.7 million and $7.7 million, respectively, representing an Adjusted EBITDA Margin of 17.4% and 10.2%, respectively.

Current wording

•Adjusted EBITDA was $9.3 million and $3.5 million, respectively, representing an Adjusted EBITDA Margin of 12.3% and 4.8%, respectively.

Previous wording

Wehave achieved the following operating and financial results for the six months ended July 31, 2024 and 2023, respectively:

Current wording

Wehave achieved the following operating and financial results for thenine months ended October 31, 2024 and 2023, respectively:

Previous wording

•Gross Profit was $60.8 million and $64.6 million, respectively, representing a gross margin of 39.5% and 43.1%, respectively;

Current wording

•Gross Profit was $87.1 million and $89.8 million, respectively, representing a gross margin of 37.9% and 40.4%, respectively;

Previous wording

•Net Loss was $(37.6) million and $(56.9) million, respectively. Net Loss as a percentage of revenue was (24.4)% and (38.0)%, respectively, and included $0.2 million of restructuring and related charges for thesix months ended July 31, 2024;

Current wording

•Net Loss was $(56.5) million and $(88.4) million, respectively. Net Loss as a percentage of revenue was (24.6)% and (39.7)%, respectively, and included $0.2 million of restructuring and related charges for the nine months ended October 31, 2024;

Previous wording

•Adjusted EBITDA was $20.2 million and $12.2 million, respectively, representing an Adjusted EBITDA margin of 13.1% and 8.1%, respectively;

Current wording

•Adjusted EBITDA was $29.5 million and $15.7 million, respectively, representing an Adjusted EBITDA margin of 12.8% and 7.1%, respectively;

Previous wording

•Net cash used in operating activities plus net cash used in investing activities was $(5.9) million and $(29.6) million, respectively;

Current wording

•Net cash used in operating activities plus net cash used in investing activities was $(9.3) million and $(47.3) million, respectively;

Previous wording

•Net cash used in operating activities plus net cash used in investing activities as a percentage of revenue was (3.8)% and (19.7)%, respectively; and

Current wording

•Net cash used in operating activities plus net cash used in investing activities as a percentage of revenue was (4.0)% and (21.3)%, respectively; and

Previous wording

Customer acquisition is dependent on organic growth, the effectiveness of our paid marketing strategy and the availability of and satisfaction with our rental product. During fiscal year 2024, we anticipate focusing on increasing customer awareness of the Rent the Runway brand through brand campaigns, live events, and other initiatives. We are also focused on improving the efficiency of our paid marketing through channel diversification, improved creative content, and other optimizations. Our acquisitions are also reliant on new customer promotions. We expect our promotional spending to be below historical averages in the near to medium term, which is anticipated to reduce subscriber acquisition in the near-term, but support the health of the business over the longer-term. Our promotional strategy is subject to change depending on business and market conditions. In fiscal year 2024, we have focused, and plan to continue to focus, on improving both the availability of and satisfaction with our rental product for our Reserve and Subscription customers.

Current wording

Customer acquisition is dependent on organic growth, the effectiveness of our paid marketing strategy and the availability of and satisfaction with our rental product. During fiscal year 2024, we have focused on increasing customer awareness of the Rent the Runway brand through brand campaigns, live events, and other initiatives. We have also focused on improving the efficiency of our paid marketing through channel diversification, improved creative content, and other optimizations. Our acquisitions are also reliant on new customer promotions. We expect our promotional spending to be below historical averages in the near to medium term, which is anticipated to reduce subscriber acquisition in the near-term, but support the health of the business over the longer-term. Our promotional strategy is subject to change depending on business and market conditions. In fiscal year 2024, we have focused, and plan to continue to focus, on improving both the availability of and satisfaction with our rental product for our Reserve and Subscription customers.

Previous wording

We believe customer retention plays an important role in driving business growth. Customer retention is influenced by a number of factors, including rental product in-stock levels and satisfaction, product experience, and customer service levels. Starting in fiscal year 2023, we increased depth of our rental product purchases to improve rental product in-stock levels. We currently expect to continue to improve rental product in-stock levels through our depth strategy in fiscal year 2024. In addition, we are focused on improving the availability of and satisfaction with our rental product by focusing on improved logistics and merchandising. We are also focused on new product features as well as more personal customer service and styling. As a result of these initiatives, we have seen better customer retention in recent quarters.

Current wording

We believe customer retention plays an important role in driving business growth. Customer retention is influenced by a number of factors, including rental product in-stock levels and satisfaction, product experience, and customer service levels. Starting in fiscal year 2023, we increased depth of our rental product purchases to improve rental product in-stock levels. Through the nine months ending October 31, 2024, we have experienced better in-stock rates versus the prior fiscal year and we continue to expect average in-stock rates to be higher for fiscal year 2024 versus fiscal year 2023. Depending on customer demand, units sold, and other factors, in-stock rates in the fourth quarter of fiscal year 2024, while higher than those experienced during the majority of fiscal year 2023, may be below the higher in-stock rates achieved in the fourth quarter of fiscal year 2023. In addition, we are focused on improving the availability of and satisfaction with our rental product by focusing on improved logistics and merchandising. We are also focused on new product features as well as more personal customer service and styling. As a result of these initiatives, we have seen better customer retention for the first three quarters of fiscal year 2024.

Previous wording

Ability to Acquire, Manage and Monetize Products Efficiently. Our ability to deliver an elevated experience for our subscribers and customers that keeps them loyal to RTR depends on us having the right assortment. For example, beginning in fiscal year 2023, we focused on enhancing the availability of rental product on our site by increasing the depths of our buys (i.e. acquiring more units of particular styles) and expect to continue to pursue this strategy in fiscal year 2024. Due to our deep partnerships with brands, flexibility in our buying timelines and ability to react to advantageous retail purchasing environments, we can acquire products directly from brands in multiple cost effective ways. Our expertise in reverse logistics and garment restoration also provides us with the ability to monetize our products effectively over their useful life. Diversifying our product acquisition away from 100% Wholesale has driven higher overall product return on investment and reduced the capital needs of the business. In fiscal year 2023, approximately 61% of new items were acquired through our more capital efficient non-Wholesale channels, compared to 58% in fiscal year 2022 and 55% in fiscal year 2021. We plan to further increase the percentage of units acquired through Exclusive Designs and Share by RTR in fiscal year 2024. We continuously evaluate our product acquisition mix to maximize our strategic priorities.

Current wording

Ability to Acquire, Manage and Monetize Products Efficiently. Our ability to deliver an elevated experience for our subscribers and customers that keeps them loyal to RTR depends on us having the right assortment. For example, beginning in fiscal year 2023, we focused on enhancing the availability of rental product on our site by increasing the depths of our buys (i.e. acquiring more units of particular styles) and have continued to pursue this strategy in fiscal year 2024. Due to our deep partnerships with brands, flexibility in our buying timelines and ability to react to advantageous retail purchasing environments, we can acquire products directly from brands in multiple cost effective ways. Our expertise in reverse logistics and garment restoration also provides us with the ability to monetize our products effectively over their useful life. Diversifying our product acquisition away from 100% Wholesale has driven higher overall product return on investment and reduced the capital needs of the business. In fiscal year 2023, approximately 61% of new items were acquired through our more capital efficient non-Wholesale channels, compared to 58% in fiscal year 2022 and 55% in fiscal year 2021. We plan to further increase the percentage of units acquired through Exclusive Designs and Share by RTR on a combined basis in fiscal year 2024. We continuously evaluate our product acquisition mix to maximize our strategic priorities.

Previous wording

We use Adjusted EBITDA to assess our operating performance and the operating leverage of our business prior to capital expenditures. We also measure the cash consumption of the business including capital expenditures by assessing net cash used in operating activities and net cash used in investing activities on a combined basis.

Current wording

We use Adjusted EBITDA to assess our operating performance and the operating leverage of our business prior to capital expenditures. We also measure the cash consumption of the business including capital expenditures by assessing net cash used in operating activities and net cash used in investing activities on a combined basis. The 2023 Amended Temasek Facility reduces our cash interest payments during fiscal years 2024 and 2025 relative to the original agreement, which we expect to improve our overall liquidity.

Previous wording

We continue to take actions to adjust to the changing business environment and related inflationary pressure. For example, in light of potential pricing sensitivity in the current macro-economic environment, we are focused on investing in our customer and delivering even more value to her, and emphasizing the value proposition of our offering in our marketing materials. In addition, we increased wage rates during fiscal year 2023 and the first quarter of fiscal year 2024 to attract and retain talent at our fulfillment centers and we expect to continue to be impacted by rising labor costs in the future. We also expect transportation costs to decrease as a percentage of sales in fiscal year 2024 due to transportation efficiencies and the impact of our new transportation contract with a major national carrier, effective in September 2023. While we expect to be able to reduce transportation costs as a percentage of sales in fiscal year 2024, we plan to continue to mitigate longer-term rising costs by seeking to optimize shipping methods and improve contractual and pricing terms. Although we continue to face a challenging environment, we plan to invest in our customers, manage our staffing and further leverage our transportation partners to help to drive growth and efficiencies in our business.

Current wording

We continue to take actions to adjust to the changing business environment and related inflationary pressure. For example, in light of potential pricing sensitivity in the current macro-economic environment, we are focused on investing in our customer and delivering even more value to her, and emphasizing the value proposition of our offering in our marketing materials. In addition, we increased wage rates during fiscal year 2023 and the first quarter of fiscal year 2024 to attract and retain talent at our fulfillment centers and we expect to continue to be impacted by rising labor costs in the future. We also expect transportation costs to decrease as a percentage of sales in fiscal year 2024 on an annual basis due to transportation efficiencies and the impact of our September 2023 transportation contract with a major national carrier, notwithstanding an anticipated increase in the fourth quarter of fiscal year 2024. While we expect to be able to reduce transportation costs as a percentage of sales for fiscal year 2024, we plan to continue to mitigate longer-term rising costs by seeking to optimize shipping methods and improve contractual and pricing terms. Although we continue to face a challenging environment, we plan to invest in our customers, manage our staffing and further leverage our transportation partners to help to drive growth and efficiencies in our business.

Previous wording

Active Subscribers: Active Subscribers represents the number of subscribers with an active membership as of the last day of any given period and excludes paused subscribers. As of July 31, 2024, we had 129,073 Active Subscribers, down from 137,566 as of July 31, 2023. The decline in active subscribers was driven by lower acquisitions due primarily to the change in our promotional strategy during the second quarter of fiscal year 2024 versus the same quarter last year. This decline was partially offset by improved subscriber retention during the quarter compared to the same quarter last year.

Current wording

Active Subscribers: Active Subscribers represents the number of subscribers with an active membership as of the last day of any given period and excludes paused subscribers. As of October 31, 2024, we had 132,518 Active Subscribers, up from 131,725 as of October 31, 2023. The increase in active subscribers was driven by improved subscriber retention during the quarter compared to the same quarter last year. The increase was partially offset by slightly lower acquisitions.

Previous wording

Average Active Subscribers: Average Active Subscribers represents the mean of the beginning of quarter and end of quarter Active Subscribers for a quarterly period; and for other periods, represents the mean of the Average Active Subscribers of every quarter within that period. As of July 31, 2024, we had 137,455 Average Active Subscribers, down from 141,393 as of July 31, 2023. The decline in active subscribers was driven by lower acquisitions due primarily to the change in promotional strategy during the second quarter of fiscal year 2024 versus the same quarter last year. This decline was partially offset by improved subscriber retention during the quarter compared to the same quarter last year.

Current wording

Average Active Subscribers: Average Active Subscribers represents the mean of the beginning of quarter and end of quarter Active Subscribers for a quarterly period; and for other periods, represents the mean of the Average Active Subscribers of every quarter within that period. As of October 31, 2024, we had 130,796 Average Active Subscribers, down from 134,646 as of October 31, 2023. The decline in average active subscribers was primarily due to a change in promotional strategy during the second quarter of fiscal year 2024 versus the same quarter last year.

Previous wording

Gross Profit was $32.4 million for the three months ended July 31, 2024 compared to $33.2 million for the three months ended July 31, 2023, representing Gross Margins of 41.1% and 43.9%, respectively. Gross Profit was $60.8 million for the six months ended July 31, 2024 compared to $64.6 million for the six months ended July 31, 2023 representing Gross Margins of 39.5% and 43.1%, respectively. Gross Profit and Gross Margin for the three and six months ended July 31, 2024 decreased due to the impact of higher rental product depreciation and revenue share costs as a percentage of sales, partially offset by lower fulfillment costs as a percentage of sales. We will seek to continue to drive fulfillment and operational efficiency gains over time and strategically evolve our mix of revenue and product acquisition to offset cost increases.

Current wording

Gross Profit was $26.3 million for the three months ended October 31, 2024 compared to $25.2 million for the three months ended October 31, 2023, representing Gross Margins of 34.7% and 34.8%, respectively. Gross Profit was $87.1 million for the nine months ended October 31, 2024 compared to $89.8 million for the nine months ended October 31, 2023 representing Gross Margins of 37.9% and 40.4%, respectively. Gross Profit and Gross Margin for the three and nine months ended October 31, 2024 decreased due to the impact of higher rental product depreciation and revenue share costs as a percentage of sales, partially offset by lower fulfillment costs as a percentage of sales. We will seek to continue to drive fulfillment and operational efficiency gains over time and strategically evolve our mix of revenue and product acquisition to offset cost increases.

Previous wording

Adjusted EBITDA and Adjusted EBITDA Margin: We define Adjusted EBITDA as net loss, adjusted to exclude interest expense, rental product depreciation, other depreciation and amortization, share-based compensation expense, write-off of liquidated assets, non-recurring adjustments, restructuring charges, income tax (benefit) expense, other income and expense, and other gains / losses. Adjusted EBITDA margin is defined as Adjusted EBITDA calculated as a percentage of total revenue, net for a period.

Current wording

Adjusted EBITDA and Adjusted EBITDA Margin: We define Adjusted EBITDA as net loss, adjusted to exclude interest expense, rental product depreciation, other depreciation and amortization, share-based compensation expense, write-off of liquidated assets, non-recurring adjustments, non-ordinary course legal expenses, restructuring charges, income tax (benefit) expense, other income and expense, and other gains / losses. Adjusted EBITDA margin is defined as Adjusted EBITDA calculated as a percentage of total revenue, net for a period.

Previous wording

Adjusted EBITDA was $13.7 million for the three months ended July 31, 2024 compared to $7.7 million for the three months ended July 31, 2023, representing margins of 17.4% and 10.2%, respectively. Adjusted EBITDA was $20.2 million for the six months ended July 31, 2024 compared to $12.2 million for the six months ended July 31, 2023, representing margins of 13.1% and 8.1%, respectively. Adjusted EBITDA Margin improved year over year due to our fixed cost reduction efforts, higher revenue and lower fulfillment costs partially offset by higher revenue share payments due to a greater proportion of revenue share units.

Current wording

Adjusted EBITDA was $9.3 million for the three months ended October 31, 2024 compared to $3.5 million for the three months ended October 31, 2023, representing margins of 12.3% and 4.8%, respectively. Adjusted EBITDA was $29.5 million for the nine months ended October 31, 2024 compared to $15.7 million for the nine months ended October 31, 2023, representing margins of 12.8% and 7.1%, respectively. Adjusted EBITDA Margin improved year over year due to our fixed cost reduction efforts, higher revenue and lower fulfillment costs partially offset by higher revenue share payments due to a greater proportion of revenue share units.

Previous wording

Total Revenue, Net. Total revenue, net was $78.9 million for thethree months ended July 31, 2024, an increase of $3.2 million, or 4.2%, compared to $75.7 million for thethree months ended July 31, 2023. This increase was primarily driven by the increase in units purchased per subscriber. In fiscal year 2024, we expect revenue to increase as we work towards growing our customer base, improving the customer experience and continuing to focus on our resale revenue.

Current wording

Total Revenue, Net. Total revenue, net was $75.9 million for thethree months ended October 31, 2024, an increase of $3.4 million, or 4.7%, compared to $72.5 million for thethree months ended October 31, 2023. This increase was primarily driven by an increase in Reserve revenue, an increase in the average selling price per unit purchased, and an increase in the units purchased per subscriber. In fiscal year 2024, we expect revenue to increase as we work towards growing our customer base, improving the customer experience and continuing to focus on our resale revenue.

Previous wording

Subscription and Reserve Rental Revenue. Subscription and Reserve rental revenue was $68.5 million for thethree months ended July 31, 2024, an increase of $0.5 million, or 0.7%, compared to $68.0 million for thethree months ended July 31, 2023. This increase wasdriven by higher revenue per subscriber driven by changes in our promotional strategy and also due to higher reserve revenue compared to the same period last year.

Current wording

Subscription and Reserve Rental Revenue. Subscription and Reserve rental revenue was $66.3 million for thethree months ended October 31, 2024, an increase of $1.6 million, or 2.5%, compared to $64.7 million for thethree months ended October 31, 2023. This increase wasdriven by higher Reserve revenue and higher average revenue per subscriber offset by lower average subscribers compared to the same period last year.

Previous wording

Other Revenue. Other revenue was $10.4 million for thethree months ended July 31, 2024, an increase of $2.7 million, or 35.1%, compared to $7.7 million for thethree months ended July 31, 2023. This increase was primarily driven by an increase in the items purchased per subscriber. Other revenue represented 13.2% of total revenue, up from 10.2% in the same period last year.

Current wording

Other Revenue. Other revenue was $9.6 million for thethree months ended October 31, 2024, an increase of $1.8 million, or 23.1%, compared to $7.8 million for thethree months ended October 31, 2023. This increase was primarily driven by an increase in the average selling price per unit and an increase in the units purchased per subscriber. Other revenue represented 12.6% of total revenue, up from 10.8% in the same period last year.

Previous wording

Costs and Expenses. Total costs and expenses were $88.5 million for thethree months ended July 31, 2024, a decrease of $(4.7) million, or (5.0)%, comp ared to $93.2 million for thethree months ended July 31, 2023. This decrease wasprimarily driven by lower share-based compensation expense, cost savings from the January 2024 restructuring plan, the implementation of our new transportation contract in September 2023 and improvement in warehouse labor productivity, which reduced costs compared to the same period last year, offset by higher rental product depreciation and revenue share.

Current wording

Costs and Expenses. Total costs and expenses were $89.6 million for thethree months ended October 31, 2024, a decrease of $(4.8) million, or (5.1)%, comp ared to $94.4 million for thethree months ended October 31, 2023. This decrease wasprimarily driven by cost savings from the January 2024 restructuring plan, lower share-based compensation expense, and improvement in warehouse labor productivity, which reduced costs compared to the same period last year, offset by higher rental product depreciation and revenue share.

Previous wording

Fulfillment. Fulfillment expenses were $20.6 million for thethree months ended July 31, 2024, a decrease of $(1.9) million, or (8.4)%, representing 26.1% of revenue, compared to $22.5 million for thethree months ended July 31, 2023, representing 29.7% of revenue. The decrease in fulfillment dollars and as a percentage of revenue was primarily driven by transportation and processing cost efficiencies and higher revenue per shipment that offset an increase in wage rates during the first quarter of fiscal year 2024.

Current wording

Fulfillment. Fulfillment expenses were $21.4 million for thethree months ended October 31, 2024, a decrease of $(0.1) million, or (0.5)%, representing 28.2% of revenue, compared to $21.5 million for thethree months ended October 31, 2023, representing 29.7% of revenue. The decrease in fulfillment dollars and as a percentage of revenue was primarily driven by higher revenue per shipment and processing cost efficiencies that offset an increase in wage rates during the first quarter of fiscal year 2024.

Previous wording

In fiscal year 2024, we expect fulfillment expenses as a percentage of total revenue to decrease as a result of anticipated higher revenue per order and continued transportation and processing efficiencies.

Current wording

In fiscal year 2024, we expect fulfillment expenses as a percentage of total revenue to decrease compared to fiscal year 2023 as a result of anticipated higher revenue per order and continued transportation and processing efficiencies, notwithstanding an anticipated increase in the fourth quarter of fiscal year 2024.

Previous wording

Technology. Technology expenses were $8.7 million for thethree months ended July 31, 2024, a decrease of$(4.2)million, or (32.6)%, compared to $12.9 million for thethree months ended July 31, 2023. This decrease was driven by cost savings from the January 2024 restructuring plan, other cost saving initiatives and lower share-based compensation expense. We were able to realize these benefits while supporting growth initiatives including enhanced checkout completion and search, fit and discovery experience for the consumer. Technology expenses were 11.0% of revenue for the three months ended July 31, 2024 compared to 17.0% for the same period last year as we saw increased operating leverage with higher revenue and a lower cost base post-restructuring. Technology related share-based compensation expense was $0.5 million for the three months ended July 31, 2024 and was $1.8 million for the same period last year.

Current wording

Technology. Technology expenses were $8.7 million for thethree months ended October 31, 2024, a decrease of$(3.4)million, or (28.1)%, compared to $12.1 million for thethree months ended October 31, 2023. This decrease was driven by cost savings from the January 2024 restructuring plan, other cost saving initiatives and lower share-based compensation expense. We were able to realize these benefits while supporting growth initiatives including enhanced checkout completion and search, fit and discovery experience for the consumer. Technology expenses were 11.5% of revenue for the three months ended October 31, 2024 compared to 16.7% for the same period last year as we saw increased operating leverage with higher revenue and a lower cost base post-restructuring. Technology related share-based compensation expense was $0.4 million for the three months ended October 31, 2024 and was $0.9 million for the same period last year.

Previous wording

In fiscal year 2024, we expect marketing expenses to remain roughly flat in dollars compared to fiscal year 2023. The timing of our marketing expenses during the year will depend in part on the timing of marketing campaigns.

Current wording

In fiscal year 2024, we expect marketing expenses to decrease in dollars and as a percentage of total revenue compared to fiscal year 2023. The timing of our marketing expenses during the year will depend in part on the timing of marketing campaigns.

Previous wording

General and Administrative. General and administrative (“G&A”) expenses were $22.2 million for the three months ended July 31, 2024, a decrease of $(3.7) million, or (14.3)%, compared to $25.9 million for the three months ended July 31, 2023. This decrease was driven by lower share-based compensation expense and cost savings from the January 2024 restructuring plan. G&A expenses as a percentage of revenue were 28.1%, compared to 34.2% last year, as we saw increased operating leverage with higher revenue and a lower cost base post-restructuring. G&A related share-based compensation expense was $1.9 million for the three months ended July 31, 2024 and was $5.6 million for the three months ended July 31, 2023. The decrease was primarily due to reduced share-based compensation in the current quarter.

Current wording

General and Administrative. General and administrative (“G&A”) expenses were $21.2 million for the three months ended October 31, 2024, a decrease of $(3.2) million, or (13.1)%, compared to $24.4 million for the three months ended October 31, 2023. This decrease was driven by lower share-based compensation expense and cost savings from the January 2024 restructuring plan. G&A expenses as a percentage of revenue were 27.9%, compared to 33.7% last year, as we saw increased operating leverage with higher revenue and a lower cost base post-restructuring. G&A related share-based compensation expense was $1.8 million for the three months ended October 31, 2024 and was $4.0 million for the three months ended October 31, 2023. The decrease was primarily due to reduced share-based compensation in the current quarter.

Previous wording

Rental Product Depreciation and Revenue Share. Rental product depreciation and revenue share was $25.9 million for thethree months ended July 31, 2024, an increase of $5.9 million, or 29.5%, compared to $20.0 million for thethree months ended July 31, 2023. The increase was primarily driven by higher Share by RTR units acquired, higher base of rental product and an increase in other revenue. Rental product depreciation and revenue share was 32.8% of revenue in the three months ended July 31, 2024, up from 26.4% in the same period last year primarily due tothe factors discussed above.

Current wording

Rental Product Depreciation and Revenue Share. Rental product depreciation and revenue share was $28.2 million for thethree months ended October 31, 2024, an increase of $2.4 million, or 9.3%, compared to $25.8 million for thethree months ended October 31, 2023. The increase was primarily driven by higher Share by RTR units acquired, higher base of rental product and an increase in other revenue. Rental product depreciation and revenue share was 37.2% of revenue in the three months ended October 31, 2024, up from 35.6% in the same period last year primarily due tothe factors discussed above.

Previous wording

Other Depreciation and Amortization. Other depreciation and amortization was $3.3 million for thethree months ended July 31, 2024, a decrease of $(0.4) million, or (10.8)%, compared to $3.7 million for the three months ended July 31, 2023. This decrease was primarily driven by lower depreciation associated with reusable packaging and machinery and equipment.

Current wording

Other Depreciation and Amortization. Other depreciation and amortization was $3.0 million for thethree months ended October 31, 2024, a decrease of $(0.5) million, or (14.3)%, compared to $3.5 million for the three months ended October 31, 2023. This decrease was primarily driven by lower depreciation associated with machinery and equipment and reusable packaging.

Previous wording

Interest Income / (Expense), Net. Interest expense, net was $(6.0) million for thethree months ended July 31, 2024, a decrease in expense of $3.5 million, or (36.8)%, compared to $(9.5) million for thethree months ended July 31, 2023. This decrease was driven by lowered paid-in-kind (“PIK”) and cash interest from the 2023 Amended Temasek Facility, partially offset by higher debt discount amortization. Of the $(6.0) million total interest expense in the three months ended July 31, 2024, $0.7 million was the net of cash interest earned, financing lease and other interest and $(6.7) million was debt discount amortization, compared to $(7.6) million of PIK interest, $(0.1) million net of cash interest, financing lease and other interest and $(1.8) million of debt discount amortization in the three months ended July 31, 2023.

Current wording

Interest Income / (Expense), Net. Interest expense, net was $(6.1) million for thethree months ended October 31, 2024, a decrease in expense of $3.9 million, or (39.0)%, compared to $(10.0) million for thethree months ended October 31, 2023. This decrease was driven by lowered paid-in-kind (“PIK”) and cash interest from the 2023 Amended Temasek Facility, partially offset by higher debt discount amortization. Of the $(6.1) million total interest expense in the three months ended October 31, 2024, $0.8 million was the net of cash interest earned, financing lease and other interest and $(6.9) million was debt discount amortization, compared to $(7.8) million of PIK interest, $(0.4) million net of cash interest, financing lease and other interest and $(1.8) million of debt discount amortization in the three months ended October 31, 2023.