Rent the Runway, Inc.
For the period ended Oct 31, 2025. Filed Dec 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 31, 2025 · Filed Dec 12, 2025
RENT$2.19-3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-31; filed 2025-09-12.
0001468327-25-000176
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-12.
0001468327-25-000237
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 174 previous paragraphs and 177 current paragraphs.
74 unchanged; 80 reworded; 23 added; 20 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
•Driving Growth by Making the Biggest Inventory Acquisition in RTR History. This year, we’re on track to nearly double the new inventory added to our site and post more than 1.5 times the number of new styles relative to last year, which has driven substantial growth in our business. Ending Active Subscribers for the third quarter of fiscal year 2025 increased 12% year-over-year primarily driven by improvement in subscriber retention. Inventory continues to be a significant driver of improvements in customer loyalty, with inventory-related churn down nearly 30% year-over-year in the third quarter of fiscal year 2025.
Current report
•Reinvigorating our Brand & Fueling Growth with Community-First Organic Tactics: We’ve expanded our community-driven organic growth strategy to drive brand awareness and acquisition. Key launches in the third quarter of fiscal year 2025 include the RTR Muse, Affiliate Creator and City Ambassador programs, each of which leverage community-driven content and word-of-mouth tactics designed to reach new customers more efficiently than traditional paid marketing tactics.
Current report
•Accelerating Product Innovation and Personalized Experience: Third quarter of fiscal year 2025 launches include a personalized home page redesign that encourages inventory discovery tailored according to a customer’s preferences.Since launch to date, our customer is engaging +57% more with the personalized app experience compared to the prior homepage.
Current report
•Optimizing Revenue per Subscriber and Driving Add-On Growth: We’ve enhanced the add-on pricing experience for customers by clearly showing her that the price prorates based on her specific billing cycle. These updates, along with overall inventory improvements, resulted in a +17% year-over-year increase in the subscription add-on rate in the third quarter of fiscal year 2025. We also recently launched instant gratification, a product that uses our in-stock notifications to enable subscribers to make one-off inventory orders when they are out of shipments.
Current report
•Revenue was $87.6 million and $75.9 million, respectively, representing 15.4% growth year-over-year;
Current report
•Net Income (Loss) was $76.5 million and $(18.9) million, respectively. Net Income (Loss) as a percentage of revenue was 87.3% and (24.9)%, respectively; and
Current report
•Revenue was $238.1 million and $229.8 million, respectively, representing 3.6% growth year-over-year;
Current report
•Net cash (used in) provided by operating activities was $(3.6) million and $11.5 million, and net cash used in investing activities was $(42.9) million and $(20.8) million, respectively;
Current report
•Net cash (used in) provided by financing activities was $19.4 million and $(1.6) million, respectively;
Current report
•Cash and Cash Equivalents was $50.7 million and $74.1 million, respectively.
Current report
Net Income (Loss) was $76.5 million for the three months ended October 31, 2025 compared to $(18.9) million for the three months ended October 31, 2024, representing margins of 87.3% and (24.9)%, respectively. Net Loss, excluding the Gain on Debt Restructuring as a result of the recapitalization transactions, increased year-over-year primarily due to lower Gross Profit combined with higher technology and G&A expenses. Net Income (Loss) was $24.0 million for the nine months ended October 31, 2025 compared to $(56.5) million for the nine months ended October 31, 2024, representing margins of 10.1% and (24.6)%, respectively. Net Loss, excluding the Gain on Debt Restructuring as a result of the recapitalization transactions, increased year-over-year primarily due to lower Gross Profit, higher Technology costs, higher Interest Expense and higher G&A expenses, partially offset by lower Other Depreciation and Amortization expenses and lower Marketing costs.
Current report
Gain on Debt Restructuring. Gain on Debt Restructuring consists of the gain recognized on the troubled debt restructuring from the Recapitalization Transactions completed in October 2025.
Current report
Subscription and Reserve Rental Revenue. Subscription and Reserve rental revenue was $77.0 million for thethree months ended October 31, 2025, an increase of $10.7 million, or 16.1%, compared to $66.3 million for thethree months ended October 31, 2024. This increase was primarily driven by higher Average Active Subscribers and higher average revenue per subscriber. Higher average revenue per subscriber was primarily the result of the subscription price increase effective August 1, 2025 as well as newly implemented enforcement of our late fee policy. These increases were partially offset by lower Reserve rental revenue in the third quarter of fiscal year 2025 as compared to the third quarter of fiscal year 2024.
Current report
In fiscal year 2025, we expect general and administrative expenses to decrease as a percentage of total revenue compared to fiscal year 2024.
Current report
Gain on Debt Restructuring. Gain on Debt Restructuring was $96.3 million for the three months ended October 31, 2025. The gain was recognized from the troubled debt restructuring from the Recapitalization Transactions completed in October 2025.
Current report
Comparison of thenine months ended October 31, 2025 and 2024
Current report
Marketing. Marketing expenses were $22.4 million for the nine months ended October 31, 2025, a decrease of $(1.5) million, or (6.3)%, compared to $23.9 million for the nine months ended October 31, 2024. This decrease was driven primarily by lower paid marketing expenses and lower personnel costs. Marketing expenses unrelated to personnel costs were $20.0 million in the nine months ended October 31, 2025 and 8.4% of revenue, compared to $21.7 million and 9.4% of total revenue for the same period last year.
Current report
In fiscal year 2025, we expect general and administrative expenses to decrease as a percentage of total revenue compared to fiscal year 2024.
Current report
Gain on Debt Restructuring. Gain on Debt Restructuring was $96.3 million for the nine months ended October 31, 2025. The gain was recognized from the troubled debt restructuring from the Recapitalization Transactions completed in October 2025.
Current report
Net Income (Loss) was $76.5 million for the three months ended October 31, 2025 compared to $(18.9) million for the three months ended October 31, 2024. Net Income (Loss) as a percentage of revenue was 87.3%, and (24.9)% for the three months ended October 31, 2025 and 2024, respectively. Net Income (Loss) was $24.0 million for the nine months ended October 31, 2025 compared to $(56.5) million for the nine months ended October 31, 2024. Net Income (Loss) as a percentage of revenue was 10.1%, and (24.6)% for the nine months ended October 31, 2025 and 2024, respectively, and included $0.2 million of restructuring and related charges during the nine months ended October 31, 2024.
Current report
Net Income for the three and nine months ended October 31, 2025 increased year-over-year primarily due to the impact of the Gain on Debt Restructuring as a result of the recapitalization. Net Loss for the three and nine months ended October 31, 2025, excluding the Gain on Debt Restructuring as a result of the recapitalization transactions, increased year-over-year primarily due to lower Gross Profits, higher Technology costs and higher G&A expenses, partially offset by lower Marketing costs.
Current report
(8)Reflects the gain recognized from the troubled debt restructuring from the Recapitalization Transactions completed in October 2025.
Current report
On October 28, 2025, the Company completed the previously announced recapitalization transactions to enhance the Company’s financial position and financial flexibility by significantly reducing its existing indebtedness, improving its borrowing rate and extending the maturity of its remaining indebtedness. The Company’s lender exchanged $100 million of existing outstanding indebtedness on a dollar-for-dollar cashless basis for new term loans under the New Credit Agreement and exchanged the remaining indebtedness for 26,175,193 newly issued shares of the Company’s Class A Common Stock. The Investor Group also provided an additional $20 million of new term loans under the New Credit Agreement, resulting in a total aggregate principal amount of $120 million. The Company’s minimum liquidity maintenance covenant was also reduced from $30 million to $15 million until February 20, 2027.
Removed paragraphs (20)
Previous report
•Continued deployment of our bold inventory strategy: As of August 2025, we have posted almost twice the inventory units compared to the prior year, with 323% more styles in May, 235% more in June, and 253% more in July. Year to date, we have added thousands of new styles and dozens of new brands to the platform.
Previous report
•Increased customer engagement: Engagement with new inventory in the second quarter of fiscal year 2025 overperformed last year across every key metric, including share of views (up 84% year-over-year), hearts per style (up 15% year-over-year), and new units at home (up 57% year-over-year). Second quarter of fiscal year 2025 average subscription net promoter score was up 77% versus the prior year.
Previous report
•Increased revenue share units and launched new exclusive brand collaborations: Revenue share units from existing revenue share partners are up 40% year-over-year, and total revenue share units are up 119% year-over-year. We plan to add 80+ new brands in fiscal year 2025, with 56 already launched in the first half of fiscal year 2025, and have launched seven new exclusive brand collaborations year to date.
Previous report
•Organic social delivered its strongest quarter in years: Through 11 new social series, a new ‘face of RTR,’ and a fresh approach to our influencer strategy, second quarter of fiscal year 2025 overall engagement with our social media channels is up ~800% year-over-year and views are up 175% year-over-year.
Previous report
•Enhanced the subscription experience to be more personalized, rewarding, and engaging: Introduced a new personalized home screen that we estimate will drive a significant increase in engagement, a rewards program with tiered membership perks, and the ability to preview "coming soon" styles.
Previous report
•Increased prices of our subscription plans to respond to inflationary and tariff pressures: Implemented first pricing adjustment in three years on August 1, 2025, with an average increase of $2 per item.
Previous report
•Revenue was $80.9 million and $78.9 million, respectively, representing 2.5% growth year-over-year;
Previous report
•Net Loss was $(26.4) million and $(15.6) million, respectively. Net Loss as a percentage of revenue was (32.6)% and (19.8)%, respectively; and
Previous report
•Revenue was $150.5 million and $153.9 million, respectively, representing a change of (2.2)% year-over-year;
Previous report
•Net cash (used in) provided by operating activities was $(2.2) million and $6.8 million, and net cash used in investing activities was $(30.7) million and $(12.7) million, respectively;
Previous report
•Cash and Cash Equivalents was $43.6 million and $76.6 million, respectively.
Previous report
Recapitalization Transactions
Previous report
See Note 15 — “Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements for more information.
Previous report
Net Loss was $(26.4) million for the three months ended July 31, 2025 compared to $(15.6) million for the three months ended July 31, 2024, representing margins of (32.6)% and (19.8)%, respectively. Net Loss increased year over year primarily due to the impact of higher revenue share costs, G&A expenses, fulfillment costs, technology costs, and a reduction in Other Income, partially offset by an increase in Revenue. Net Loss was $(52.5) million for the six months ended July 31, 2025 compared to $(37.6) million for the six months ended July 31, 2024, representing margins of (34.9)% and (24.4)%, respectively. Net Loss increased year over year primarily due to the impact of higher revenue share costs, lower revenue, higher fulfillment costs, higher interest expense and higher technology costs versus the prior year, partially offset by lower rental product depreciation and write-offs, other depreciation and amortization and marketing expense.
Previous report
Subscription and Reserve Rental Revenue. Subscription and Reserve rental revenue was $69.2 million for thethree months ended July 31, 2025, an increase of $0.7 million, or 1.0%, compared to $68.5 million for thethree months ended July 31, 2024. This increase was primarily driven by higher Average Active Subscribers, partially offset by a decrease in average revenue per subscriber. The decrease in revenue per subscriber was driven primarily by higher promotional spending and impact of changes in program mix of active subscribers. Reserve rental revenue was largely unchanged year-over-year.
Previous report
In fiscal year 2025, we expect G&A expenses to increase in the next several fiscal quarters due to costs relating to the Recapitalization Transactions. The Company is currently evaluating the impact of the Recapitalization Transactions on the Company’s consolidated financial statements.
Previous report
Comparison of thesix months ended July 31, 2025 and 2024
Previous report
Marketing. Marketing expenses were $16.0 million for the six months ended July 31, 2025, a decrease of $(0.8) million, or (4.8)%, compared to $16.8 million for the six months ended July 31, 2024. This decrease was driven primarily by lower consulting costs and brand marketing expenses. Marketing expenses unrelated to personnel costs were $14.4 million in the six months ended July 31, 2025 and 9.6% of revenue, compared to $15.3 million and 9.9% of total revenue for the same period last year.
Previous report
In fiscal year 2025, we expect G&A expenses to increase in the next several fiscal quarters due to costs relating to the Recapitalization Transactions. We are currently evaluating the impact of the Recapitalization Transactions on our consolidated financial statements..
Previous report
On August 20, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with its existing lender, CHS US Investments LLC, as part of a broader recapitalization intended to improve the Company’s capital structure, enhance financial flexibility, and extend debt maturities. Upon the closing of the Recapitalization Transactions, the Company shall enter into an amended and restated credit agreement (the “New Credit Agreement”), by and among the Company, as borrower, CHS (US) Management LLC, as administrative agent, and CHS US Investments LLC, Gateway Runway, LLC (“Nexus”) and S3 RR Aggregator, LLC (“Story3”) (collectively, the “Investor Group”). The New Credit Agreement, when entered into in accordance with the terms of the Exchange Agreement, will amend and restate the 2025 Amended Facility and provide for $120 million in aggregate principal amount of term loans comprised of (x) $100 million of the Company’s existing outstanding indebtedness owing to CHS US Investments LLC under the 2025 Amended Facility to be exchanged on a dollar-for-dollar cashless basis for new term loans under the New Credit Agreement and (y) $20 million of new money term loans to be provided by the Investor Group upon the closing of the Recapitalization Transactions. All such term loans would mature on the fourth anniversary of the closing of the Recapitalization Transactions and bear interest, at the Company’s option, at either (i) a bank reference rate plus 4.00% or (ii) term SOFR plus 5.00%, in each case per annum. The New Credit Agreement would modify the 2025 Amended Facility in certain other respects, including by temporarily reducing the minimum liquidity maintenance covenant from $30 million to $15 million through February 20, 2027, after which the original covenant level resumes. Pursuant to the Exchange Agreement, the remaining outstanding indebtedness owing to CHS US Investments LLC under the 2025 Amended Facility would be contributed by CHS US Investments LLC to the Company upon the closing of the Recapitalization Transactions in exchange for newly issued shares of the Company’s Class A common stock, equal to 86% of the Company’s outstanding shares (after giving effect to the Conversions, but before giving effect to the Rights Offering and the MIP Pool). Our total indebtedness as of July 31, 2025 was $343.9 million. See “Note 15 - Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements for more information.
Reworded paragraphs (80)
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 185,102 ending Total Subscribers 1 (active and paused) as of July 31, 2025. We had 146,373 Active Subscribers as of July 31, 2025. The majority of our revenue is highly recurring and is generated by our subscribers. For the six months ended July 31, 2025 and 2024, respectively, 89% and 89% 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 185,166 ending Total Subscribers 1 (active and paused) as of October 31, 2025. We had 148,916 Active Subscribers as of October 31, 2025. The majority of our revenue is highly recurring and is generated by our subscribers. For the nine months ended October 31, 2025 and 2024, respectively, 89% and 88% of our total revenue (including Reserve and Resale revenue) was generated by subscribers while they were active or paused.
Previous wording
Key Fiscal Second Quarter and Recent Business Highlights:
Current wording
Key Fiscal Third Quarter and Recent Business Highlights:
Previous wording
•Announced the Recapitalization Transactions. See Note 15 — “Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements for more information.
Current wording
•Completed the Recapitalization Transactions. See “Note 4 — Recapitalization Transactions” in the Notes to the Condensed Consolidated Financial Statements for more information.
Previous wording
•146,373 and 129,073 ending Active Subscribers 2, respectively, representing an increase of 13.4% year-over-year;
Current wording
•148,916 and 132,518 ending Active Subscribers 2, respectively, representing an increase of 12.4% year-over-year;
Previous wording
•146,765 and 137,455 Average Active Subscribers 3, respectively, representing an increase of 6.8% year-over-year;
Current wording
•147,645 and 130,796 Average Active Subscribers 3, respectively, representing an increase of 12.9% year-over-year;
Previous wording
•185,102 and 175,087 ending Total Subscribers (including paused subscribers), respectively, representing an increase of 5.7% year-over-year;
Current wording
•185,166 and 174,511 ending Total Subscribers (including paused subscribers), respectively, representing an increase of 6.1% year-over-year;
Previous wording
•Gross Profit was $24.3 million and $32.4 million, respectively, representing a gross margin of 30.0% and 41.1%, respectively;
Current wording
•Gross Profit was $25.9 million and $26.3 million, respectively, representing a gross margin of 29.6% and 34.7%, respectively;
Previous wording
•Adjusted EBITDA was $3.6 million and $13.7 million, respectively, representing an Adjusted EBITDA Margin of 4.4% and 17.4%, respectively.
Current wording
•Adjusted EBITDA was $4.3 million and $9.3 million, respectively, representing an Adjusted EBITDA Margin of 4.9% and 12.3%, respectively.
Previous wording
Wehave achieved the following operating and financial results for the six months ended July 31, 2025 and 2024, respectively:
Current wording
Wehave achieved the following operating and financial results for thenine months ended October 31, 2025 and 2024, respectively:
Previous wording
•Gross Profit was $46.2 million and $60.8 million, respectively, representing a gross margin of 30.7% and 39.5%, respectively;
Current wording
•Gross Profit was $72.1 million and $87.1 million, respectively, representing a gross margin of 30.3% and 37.9%, respectively;
Previous wording
•Net Loss was $(52.5) million and $(37.6) million, respectively. Net Loss as a percentage of revenue was (34.9)% and (24.4)%, respectively, and included $0.2 million of restructuring and related charges for thesix months ended July 31, 2024;
Current wording
•Net Income (Loss) was $24.0 million and $(56.5) million, respectively. Net Income (Loss) as a percentage of revenue was 10.1% and (24.6)%, respectively, and included $0.2 million of restructuring and related charges for the nine months ended October 31, 2024;
Previous wording
•Adjusted EBITDA was $2.3 million and $20.2 million, respectively, representing an Adjusted EBITDA margin of 1.5% and 13.1%, respectively;
Current wording
•Adjusted EBITDA was $6.6 million and $29.5 million, respectively, representing an Adjusted EBITDA margin of 2.8% and 12.8%, respectively;
Previous wording
•Net cash (used in) provided by operating activities as a percentage of revenue was (1.5)% and 4.4% and net cash used in investing activities as a percentage of revenue was (20.4)% and (8.3)%, respectively; and
Current wording
•Net cash (used in) provided by operating activities as a percentage of revenue was (1.5)% and 5.0% and net cash used in investing activities as a percentage of revenue was (18.0)% and (9.1)%, respectively; and
Previous wording
We acquire and monetize products in three ways: Wholesale, Share by RTR and Exclusive Designs. Wholesale items are acquired directly from brand partners, typically at a discount to Wholesale price. Share by RTR items are acquired directly from brand partners on consignment, at zero to low upfront cost with performance-based revenue share payments to our brand partners over time. Exclusive Designs items are designed using our data in collaboration with our brand partners. These units are manufactured through third-party partners with an upfront fee and, in most cases, minimal revenue share payments to our brand partners over time.
Current wording
We acquire and monetize products in three ways: Wholesale, Share by RTR and Exclusive Designs. Wholesale items are acquired directly from brand partners, typically at a discount to Wholesale price. Share by RTR items are acquired directly from brand partners on consignment, at zero or significantly reduced upfront cost relative to Wholesale with performance-based revenue share payments to our brand partners over time. Exclusive Designs items are designed using our data in collaboration with our brand partners. These units are manufactured through third-party partners with an upfront fee and, in most cases, minimal revenue share payments to our brand partners over time.
Previous wording
In fiscal year 2024, 30% of new items were acquired through Wholesale, 48% through Share by RTR and 22% through Exclusive Designs, compared to 39% Wholesale, 33% Share by RTR and 28% Exclusive Designs in fiscal year 2023. In total, approximately 70% of new items were acquired through Share by RTR and Exclusive Designs, our more capital-efficient channels in fiscal year 2024 and approximately 61% in fiscal year 2023. Both our purchasing power and the diversification into Share by RTR and Exclusive Designs have led to a decrease in rental product capital expenditures (or Purchases of Rental Product as presented in the Condensed Consolidated Statement of Cash Flows) as a percentage of revenue over time. We expect the total percentage of units acquired through our more capital-efficient channels to be largely unchanged in fiscal year 2025 versus fiscal year 2024, with an increase in the percentage of units acquired through our Share by RTR program versus fiscal year 2024. We plan to further decrease the percentage of units acquired through Wholesale and increase the percentage of units acquired through our more capital-efficient channels over the longer term. We expect to incur higher purchases of rental product in fiscal year 2025 relative to fiscal year 2024 in connection with our strategy to approximately double the new rental product added to our site and made available to our customers in fiscal year 2025.
Current wording
In fiscal year 2024, 30% of new items were acquired through Wholesale, 48% through Share by RTR and 22% through Exclusive Designs, compared to 39% Wholesale, 33% Share by RTR and 28% Exclusive Designs in fiscal year 2023. In total, approximately 70% of new items were acquired through Share by RTR and Exclusive Designs, our more capital-efficient channels in fiscal year 2024 and approximately 61% in fiscal year 2023. Both our purchasing power and the diversification into Share by RTR and Exclusive Designs have led to a decrease in rental product capital expenditures (or Purchases of Rental Product as presented in the Condensed Consolidated Statement of Cash Flows) as a percentage of revenue over time. We expect the total percentage of units acquired through our more capital-efficient channels to be largely unchanged in fiscal year 2025 versus fiscal year 2024, with an increase in the percentage of units acquired through our Share by RTR program versus fiscal year 2024. We plan to further decrease the percentage of units acquired through Wholesale and increase the percentage of units acquired through our more capital-efficient channels over the longer term. We expect to incur higher purchases of rental product in fiscal year 2025 relative to fiscal year 2024 in connection with our strategy to nearly double the new rental product added to our site and made available to our customers in fiscal year 2025.
Previous wording
We provide a flexible offering that allows our subscribers to customize their subscription as their everyday life changes, choosing to pause and reactivate their membership as needed. We have also historically seen that many subscribers who cancel their subscription will return and resubscribe when membership again makes sense for their everyday life. Customer acquisition is dependent on organic growth, the effectiveness of our paid marketing strategy and the availability of and satisfaction with our rental product. Our acquisitions are also reliant on new customer promotions. Our promotional strategy is subject to change depending on business and market conditions. In fiscal year 2024, we focused, and plan to continue to focus in fiscal year 2025, on improving both the availability of and satisfaction with our rental product for our Reserve and Subscription customers.
Current wording
We provide a flexible offering that allows our subscribers to customize their subscription as their everyday life changes, choosing to pause and reactivate their membership as needed. We have also historically seen that many subscribers who cancel their subscription will return and resubscribe when membership again makes sense for their everyday life. Customer acquisition is dependent on organic growth, the effectiveness of our paid marketing strategy and the availability of and satisfaction with our rental product. We are focused on our community-driven organic growth marketing strategy that is intended to drive improved brand awareness and acquisition. Our acquisitions are also reliant on new customer promotions. Our promotional strategy is subject to change depending on business and market conditions. .
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 the depth of our rental product purchases to improve rental product in-stock levels. We increased the depth of our rental product further in fiscal year 2024 and experienced better customer retention for fiscal year 2024 versus fiscal year 2023. In fiscal year 2025, we plan to focus on significantly increasing the quantity and desirability of rental product purchases, which we believe will increase customer satisfaction and improve retention further. We are also focused on new product features as well as more personal customer service and styling.
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 the depth of our rental product purchases to improve rental product in-stock levels. We increased the depth of our rental product further in fiscal year 2024 and experienced better customer retention for fiscal year 2024 versus fiscal year 2023. In fiscal year 2025, we have focused and plan to continue to focus on approximately doubling the quantity of our rental product purchases year-over year and enhancing the desirability of rental product purchases, which we believe will increase customer satisfaction and improve retention further. We are also focused on new product features as well as more a more personalized customer experience.
Previous wording
Purchases of rental product includes the cost of Wholesale products acquired in the period and other ancillary costs such as freight, where applicable. Many factors impact the purchases of rental product including our depth and acquisition mix strategy, the proportion of subscribers to total customers, timing of when those subscribers are acquired, the formality of styles, brand assortment, opportunities in the market and timing of when the rental product is received and paid for. Purchases of rental product as a percentage of revenue in fiscal year 2024 was 16% as a result of a greater proportion of rental product acquired through our Share by RTR channel combined with fewer units of rental product purchased compared to fiscal year 2023. Purchases of rental product as a percentage of revenue was 26% and 21% in fiscal year 2023 and 2022, respectively. We anticipate this percentage to increase in fiscal year 2025 compared with fiscal year 2024, despite a greater proportion of Share by RTR units, due to a significant increase in units of rental product purchased. Due to seasonality factors, we track our progress on purchases of rental product as a percentage of revenue on a full year basis, as quarterly expenditures are not necessarily reflective of full year trends. As of July 31, 2025, the quarterly and annual spend levels for rental product capital expenditures for fiscal year 2025 under our 2025 Amended Facility were eliminated under the Fourteenth Amendment to the debt facility. See “Note 15 - Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements for more details.
Current wording
Purchases of rental product includes the cost of Wholesale products acquired in the period and other ancillary costs such as freight, where applicable. Many factors impact the purchases of rental product including our depth and acquisition mix strategy, the proportion of subscribers to total customers, timing of when those subscribers are acquired, the formality of styles, brand assortment, opportunities in the market and timing of when the rental product is received and paid for. Purchases of rental product as a percentage of revenue in fiscal year 2024 was 16% as a result of a greater proportion of rental product acquired through our Share by RTR channel combined with fewer units of rental product purchased compared to fiscal year 2023. Purchases of rental product as a percentage of revenue was 26% and 21% in fiscal year 2023 and 2022, respectively. We anticipate this percentage to increase in fiscal year 2025 compared with fiscal year 2024, despite a greater proportion of Share by RTR units, due to a significant increase in units of rental product purchased. Due to seasonality factors, we track our progress on purchases of rental product as a percentage of revenue on a full year basis, as quarterly expenditures are not necessarily reflective of full year trends. As of October 31, 2025, the quarterly and annual spend levels for rental product capital expenditures for fiscal year 2025 under our 2025 Amended Facility were eliminated under the Fourteenth Amendment to the debt facility.
Previous wording
Ability to Achieve Leverage in our Cost Structure. Improving operational efficiency of our platform is imperative to increasing profitability. We expect certain of our operating costs to increase as order volume increases and as we make investments to grow subscribers and revenue and to enhance the customer experience. In September 2022, we announced a restructuring plan that reduced operating expenses by approximately $27 million in the four quarters following the restructuring compared to the annualized run rate for the second quarter of fiscal year 2022. In January 2024, we announced a restructuring plan that generated total annual operating expense savings of approximately $12 million, which primarily included 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. Though we anticipate quarterly fluctuations in operating leverage over time we anticipate that our operating costs will grow more slowly than our total revenue on an annual basis. As of July 31, 2025, the quarterly and annual spend levels for rental product capital expenditures for fiscal year 2025 under our 2025 Amended Facility were eliminated under the Fourteenth Amendment to the debt facility. See “Note 15 - Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements for more details.
Current wording
Ability to Achieve Leverage in our Cost Structure. Improving operational efficiency of our platform is imperative to increasing profitability. We expect certain of our operating costs to increase as order volume increases and as we make investments to grow subscribers and revenue and to enhance the customer experience. In January 2024, we announced a restructuring plan that generated total annual operating expense savings of approximately $12 million, which primarily included 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. Though we anticipate quarterly fluctuations in operating leverage over time we anticipate that our operating costs will grow more slowly than our total revenue on an annual basis. As of October 31, 2025, the quarterly and annual spend levels for fixed operating and marketing expenditures for fiscal year 2025 under our 2025 Amended Facility were eliminated under the Fourteenth Amendment to the debt facility.
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. See also “Note 3 - Liquidity” and “Note 15 - Subsequent Events” in the Notes to the Condensed Consolidated Financial Statements for more details regarding our 2025 Amended Facility and Recapitalization Transactions, which we expect to improve our overall liquidity.
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. See also Note 3 — “Liquidity” and Note 4 — “Recapitalization Transactions” in the Notes to the Condensed Consolidated Financial Statements for more details regarding our 2025 Amended Facility and Recapitalization Transactions, which we expect to improve our overall liquidity.
Previous wording
We experience seasonality in our business, which has been impacted due to the effects of COVID-19, the macro environment, and business decisions and may in the future continue to evolve. For our Subscription rentals, we typically acquire the highest number of subscribers in March through May and September through November, as these are the times customers naturally think about changing over their wardrobes. We generally see a higher rate of subscribers pause in the summer, and in mid-December through the end of January. In the third and fourth fiscal quarters, our Reserve offering historically (prior to COVID-19) benefited from increased wedding and holiday events but this seasonality has varied since the onset of COVID-19. For example, in fiscal year 2022, we believe that a price increase of our Subscription programs in April 2022 affected traditional seasonal patterns. In fiscal year 2023, changes in rental product in-stock levels and changes to promotional prices also disrupted typical seasonality. However, in fiscal year 2024, we observed more typical seasonal patterns. Given continued business changes, our future seasonality may not resemble historical trends.
Current wording
We experience seasonality in our business, which has been impacted due to the effects of COVID-19, the macro environment, and business decisions and may in the future continue to evolve. For our Subscription rentals, we typically acquire the highest number of subscribers in March through May and September through November, as these are the times customers naturally think about changing over their wardrobes. We generally see a higher rate of subscribers pause in the summer, and in mid-December through the end of January. In prior periods, business decisions including, but not limited to, changes in prices for our Subscription programs, changes in timing and amounts of promotional spending, changes in timing and amounts of paid marketing spending, and changes in timing and quantity of rental product availability, have impacted typical seasonal trends. Given continued business changes, our future seasonality may not resemble historical trends.
Previous wording
In addition to the measures presented in our condensed consolidated financial statements, we use the following key business and financial metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. The calculation of the key business and financial metrics discussed below may differ from similarly titled metrics used by other companies, securities analysts or investors, limiting the usefulness of those measures for comparative purposes. These key business and financial metrics are not meant to be considered as indicators of our financial performance in isolation from or as a substitute for our financial information prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and should be considered in conjunction with other metrics and components of our results of operations, such as each of the other key business and financial metrics, and our revenue and net loss.
Current wording
In addition to the measures presented in our condensed consolidated financial statements, we use the following key business and financial metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. The calculation of the key business and financial metrics discussed below may differ from similarly titled metrics used by other companies, securities analysts or investors, limiting the usefulness of those measures for comparative purposes. These key business and financial metrics are not meant to be considered as indicators of our financial performance in isolation from or as a substitute for our financial information prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and should be considered in conjunction with other metrics and components of our results of operations, such as each of the other key business and financial metrics, and our revenue and net income (loss).
Previous wording
(1)Adjusted EBITDA is a non-GAAP financial measure; for a reconciliation to the most directly comparable U.S. GAAP financial measure, net loss, and why we consider Adjusted EBITDA to be a useful metric, see “—Non-GAAP Financial Metrics” below.
Current wording
(1)Adjusted EBITDA is a non-GAAP financial measure; for a reconciliation to the most directly comparable U.S. GAAP financial measure, net income (loss), and why we consider Adjusted EBITDA to be a useful metric, see “—Non-GAAP Financial Metrics” below.
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, 2025, we had 146,373 Active Subscribers, an increase from 129,073 as of July 31, 2024. The increase in Active Subscribers was driven primarily by higher subscriber acquisitions, increased promotional activity and an improvement in retention during the second quarter of fiscal year 2025 as compared to the prior year as we focused on improving our customer experience through increased rental product and the rollout of multiple product improvements.
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, 2025, we had 148,916 Active Subscribers, an increase from 132,518 as of October 31, 2024. The increase in Active Subscribers was driven primarily by a higher base of active subscribers at the end of the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2025, in addition to higher subscriber acquisitions, driven in part by higher promotional activity, and improved subscriber retention versus the third quarter of fiscal year 2024.
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, 2025, we had 146,765 Average Active Subscribers, an increase from 137,455 as of July 31, 2024. The year over year increase in Average Active Subscribers was primarily due to the higher base of Ending Active Subscribers at the end of the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024, and a higher level of acquisitions, increased promotional activity, and stronger retention in the second quarter of fiscal year 2025 as compared to the prior 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, 2025, we had 147,645 Average Active Subscribers, an increase from 130,796 as of October 31, 2024. The year-over-year increase in Average Active Subscribers was primarily due to the higher base of Ending Active Subscribers at the end of the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024, in addition to higher subscriber acquisitions, driven in part by higher promotional activity, and improved subscriber retention versus the third quarter of fiscal year 2024.
Previous wording
Gross Profit was $24.3 million for the three months ended July 31, 2025 compared to $32.4 million for the three months ended July 31, 2024, representing Gross Margins of 30.0% and 41.1%, respectively. Gross Profit was $46.2 million for the six months ended July 31, 2025 compared to $60.8 million for the six months ended July 31, 2024, representing Gross Margins of 30.7% and 39.5%, respectively. Gross Profit and Gross Margin for the three and six months ended July 31, 2025 decreased primarily due to the impact of higher revenue share costs and fulfillment costs as a percentage of sales.
Current wording
Gross Profit was $25.9 million for the three months ended October 31, 2025 compared to $26.3 million for the three months ended October 31, 2024, representing Gross Margins of 29.6% and 34.7%, respectively. Gross Profit was $72.1 million for the nine months ended October 31, 2025 compared to $87.1 million for the nine months ended October 31, 2024, representing Gross Margins of 30.3% and 37.9%, respectively. Gross Profit and Gross Margin for the three months ended October 31, 2025 decreased primarily due to the impact of higher revenue share costs as a percentage of Revenue, partially offset by lower rental product depreciation and write-off costs as a percentage of Revenue, as well as lower fulfillment costs as a percentage of Revenue. Gross Profit and Gross Margin for the nine months ended October 31, 2025 decreased primarily due to the impact of higher revenue share costs and fulfillment costs as a percentage of Revenue, partially offset by lower rental product depreciation and write-off costs as a percentage of Revenue.
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, 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.
Current wording
Adjusted EBITDA and Adjusted EBITDA Margin: We define Adjusted EBITDA as net income (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, Gain on Debt Restructuring, 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 $3.6 million for the three months ended July 31, 2025 compared to $13.7 million for the three months ended July 31, 2024, representing margins of 4.4% and 17.4%, respectively. Adjusted EBITDA margin decreased year over year primarily due to higher revenue share and fulfillment costs as a percentage of revenue. Adjusted EBITDA was $2.3 million for the six months ended July 31, 2025 compared to $20.2 million for the six months ended July 31, 2024, representing margins of 1.5% and 13.1%, respectively. Adjusted EBITDA margin decreased year over year primarily due to higher revenue share and fulfillment costs as a percentage of revenue in addition to lower revenue.
Current wording
Adjusted EBITDA was $4.3 million for the three months ended October 31, 2025 compared to $9.3 million for the three months ended October 31, 2024, representing margins of 4.9% and 12.3%, respectively. Adjusted EBITDA margin decreased year-over-year primarily due to higher revenue share and fulfillment costs as a percentage of revenue. Adjusted EBITDA was $6.6 million for the nine months ended October 31, 2025 compared to $29.5 million for the nine months ended October 31, 2024, representing margins of 2.8% and 12.8%, respectively. Adjusted EBITDA margin decreased year-over-year primarily due to higher revenue share and fulfillment costs as a percentage of revenue.
Previous wording
Subscription and Reserve Rental Revenue. We generate Subscription and Reserve rental revenue from subscription and Reserve rental fees. We recognize subscription fees ratably over the subscription period, commencing on the date the subscriber enrolls in a subscription program. These fees are collected upon enrollment and any revenue from an unrecognized portion of the subscription period is deferred to the following fiscal period. We implemented a price increase for our subscription plans in August 2025, which we expect will generally increase revenue per subscriber over time. We recognize Reserve fees over the rental period, which starts on the date of delivery of the product to the customer. Reserve orders can be placed up to four months prior to the rental start date (increased from two months prior to the rental start date beginning in June 2024) and the customer’s payment form is charged upon order confirmation. We defer recognizing the rental fees and any related promotions for Reserve rentals until the date of delivery, and then recognize those fees evenly over the four- or eight-day rental period.
Current wording
Subscription and Reserve Rental Revenue. We generate Subscription and Reserve rental revenue from Subscription and Reserve rental fees. The majority of our revenue is generated by our Subscription offering, which we are prioritizing. We recognize subscription fees ratably over the subscription period, commencing on the date the subscriber enrolls in a subscription program. These fees are collected upon enrollment and any revenue from an unrecognized portion of the subscription period is deferred to the following fiscal period. We implemented a price increase for our subscription plans in August 2025, which increased revenue per subscriber in the third quarter of fiscal year 2025 and which we expect will continue to do so over the coming quarters. We recognize Reserve fees over the rental period, which starts on the date of delivery of the product to the customer. Reserve orders can be placed up to four months prior to the rental start date (increased from two months prior to the rental start date beginning in June 2024) and the customer’s payment form is charged upon order confirmation. We defer recognizing the rental fees and any related promotions for Reserve rentals until the date of delivery, and then recognize those fees evenly over the four- or eight-day rental period.
Previous wording
Marketing. Marketing expenses include online and mobile marketing, search engine optimization and email costs, marketing personnel and related costs, agency fees, brand marketing, printed collateral, consumer research, and other related costs. Marketing expenses unrelated to personnel costs may increase if we increase marketing spend to drive the growth of our business and increase our brand awareness.
Current wording
Marketing. Marketing expenses include online and mobile marketing, search engine optimization and email costs, marketing personnel and related costs, agency fees, brand marketing, influencer marketing, printed collateral, consumer research, and other related costs. Marketing expenses unrelated to personnel costs may increase if we increase marketing spend to drive the growth of our business and increase our brand awareness.
Previous wording
General and Administrative. General and administrative (“G&A”) expenses consist of all other personnel and related costs for customer service, finance, tax, legal, human resources, fashion and photography and fixed operations costs. General and administrative expenses also includes occupancy costs (including warehouse-related), professional services, credit card fees, general corporate and warehouse expenses, other administrative costs, and gains and losses associated with asset disposals and operating lease terminations. In fiscal year 2025, we expect G&A expenses to increase in the next several fiscal quarters due to costs relating to the Recapitalization Transactions. We are currently evaluating the impact of the Recapitalization Transactions on our consolidated financial statements. Over the longer term, these expenses may increase as we grow our infrastructure to support the overall growth of the business. Rent expense and other facilities-related costs may increase in the future due to inflation or to support overall business growth and fulfillment efficiencies. While these expenses may vary from period to period as a percentage of total revenue, we expect them to decrease as a percentage of total revenue over the longer term.
Current wording
General and Administrative. General and administrative (“G&A”) expenses consist of all other personnel and related costs for customer service, finance, tax, legal, human resources, fashion and photography and fixed operations costs. General and administrative expenses also includes occupancy costs (including warehouse-related), professional services, credit card fees, general corporate and warehouse expenses, other administrative costs, and gains and losses associated with asset disposals and operating lease terminations. Over the longer term, these expenses may increase as we grow our infrastructure to support the overall growth of the business. Rent expense and other facilities-related costs may increase in the future due to inflation or to support overall business growth and fulfillment efficiencies. While these expenses may vary from period to period as a percentage of total revenue, we expect them to decrease as a percentage of total revenue over the longer term.
Previous wording
Total Revenue, Net. Total revenue, net was $150.5 million for thesix months ended July 31, 2025, adecrease of$(3.4) million, or(2.2)%, compared to $153.9 million for thesix months ended July 31, 2024. This decrease was primarily driven by lower Subscription and Reserve rental revenue. Infiscal year 2025, we expect revenue to increase due to higher expected subscription prices and 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 $87.6 million for thethree months ended October 31, 2025, an increase of $11.7 million, or 15.4%, compared to $75.9 million for thethree months ended October 31, 2024. This increase was primarily driven by higher Subscription and Reserve rental revenue which was driven in part by a subscription price increase implemented in August 2025. Infiscal year 2025, we expect revenue to continue to increase due to higher subscription prices and as we work towards growing our customer base, with a particular focus on growing our Subscription offering.
Previous wording
Other Revenue. Other revenue was $11.7 million for thethree months ended July 31, 2025, an increase of $1.3 million, or 12.5%, compared to $10.4 million for thethree months ended July 31, 2024. This increase was primarily driven by an increase in the items purchased per subscriber. Other revenue represented 14.5% of total revenue, up from 13.2% in the same period last year.
Current wording
Other Revenue. Other revenue was $10.6 million for thethree months ended October 31, 2025, an increase of $1.0 million, or 10.4%, compared to $9.6 million for thethree months ended October 31, 2024. This increase was primarily driven by higher Average Active Subscribers and higher average items purchased per subscriber, partially offset by a decrease in average selling price per item. Other revenue represented 12.1% of total revenue, down from 12.6% in the same period last year.
Previous wording
Costs and Expenses. Total costs and expenses were $101.0 million for thethree months ended July 31, 2025, an increase of $12.5 million, or 14.1%, comp ared to $88.5 million for thethree months ended July 31, 2024. This increase wasprimarily driven by higher Rental Product Depreciation and Revenue Share costs, higher Fulfillment costs, and higher Technology costs.
Current wording
Costs and Expenses. Total costs and expenses were $103.8 million for thethree months ended October 31, 2025, an increase of $14.2 million, or 15.8%, comp ared to $89.6 million for thethree months ended October 31, 2024. This increase wasprimarily driven by higher Revenue Share costs, higher Fulfillment costs, higher Technology costs, and higher G&A expenses, partially offset by a reduction in rental product depreciation and write-offs.
Previous wording
Fulfillment. Fulfillment expenses were $22.5 million for thethree months ended July 31, 2025, an increase of $1.9 million, or 9.2%, representing 27.8% of revenue, compared to $20.6 million for thethree months ended July 31, 2024, representing 26.1% of revenue. The increase in fulfillment expenses as a percentage of revenue was primarily driven by higher transportation costs due to carrier rate increases and higher warehouse processing costs.
Current wording
Fulfillment. Fulfillment expenses were $24.0 million for thethree months ended October 31, 2025, an increase of $2.6 million, or 12.1%, representing 27.4% of revenue, compared to $21.4 million for thethree months ended October 31, 2024, representing 28.2% of revenue. The decrease in fulfillment expenses as a percentage of revenue was primarily driven by higher revenue per order driven by the subscription price increase implemented in August 2025, partially offset by higher transportation costs due to carrier rate increases and higher warehouse processing costs.
Previous wording
In fiscal year 2025, we expect fulfillment expenses as a percentage of total revenue to decrease compared to fiscal year 2024 as a result of anticipated higher revenue per order.
Current wording
In fiscal year 2025, we expect fulfillment expenses as a percentage of total revenue to remain flat to fulfillment expenses as a percentage of total revenue in fiscal year 2024.
Previous wording
Technology. Technology expenses were $9.8 million for thethree months ended July 31, 2025, an increase of$1.1 million, or 12.6%, compared to $8.7 million for thethree months ended July 31, 2024. Technology expenses were 12.1% of revenue for the three months ended July 31, 2025 compared to 11.0% for the same period last year due to higher technology related employee costs. Technology related share-based compensation expense was $0.2 million for the three months ended July 31, 2025 and was $0.5 million for the same period last year.
Current wording
Technology. Technology expenses were $10.5 million for thethree months ended October 31, 2025, an increase of$1.8 million, or 20.7%, compared to $8.7 million for thethree months ended October 31, 2024. Technology expenses were 12.0% of revenue for the three months ended October 31, 2025 compared to 11.5% for the same period last year due primarily to higher technology related employee costs. Technology related share-based compensation expense was $0.0 million for the three months ended October 31, 2025 and was $0.4 million for the same period last year.
Previous wording
In fiscal year 2025, we expect technology expenses to decrease as a percentage of total revenue compared to fiscal year 2024 as a result of improved operating leverage due to higher expected revenue.
Current wording
In fiscal year 2025, we expect technology expenses to increase slightly as a percentage of total revenue compared to fiscal year 2024 due to higher employee expenses.
Previous wording
Marketing. Marketing expenses were $7.4 million for the three months ended July 31, 2025, a decrease of $(0.4) million, or (5.1)%, compared to $7.8 million for the three months ended July 31, 2024. This decrease was driven primarily by lower consulting costs and lower brand marketing expenses. Marketing expenses unrelated to personnel costs were $6.5 million in the three months ended July 31, 2025 and 8.0% of revenue, compared to $7.1 million and 9.0% of total revenue for the same period last year.
Current wording
Marketing. Marketing expenses were $6.4 million for the three months ended October 31, 2025, a decrease of $(0.7) million, or (9.9)%, compared to $7.1 million for the three months ended October 31, 2024. This decrease was driven primarily by lower brand marketing expenses. Marketing expenses unrelated to personnel costs were $5.6 million in the three months ended October 31, 2025 and 6.4% of revenue, compared to $6.4 million and 8.4% of total revenue for the same period last year.
Previous wording
General and Administrative. General and administrative (“G&A”) expenses were $24.6 million for the three months ended July 31, 2025, an increase of $2.4 million, or 10.8%, compared to $22.2 million for the three months ended July 31, 2024. This increase was driven primarily by expenses relating to the Recapitalization Transactions, partially offset by lower share-based compensation expense, gain on the liquidation of rental product and gain on asset disposal and lease termination. G&A expenses as a percentage of revenue were 30.4%, compared to 28.1% last year. G&A related share-based compensation expense was $1.2 million for the three months ended July 31, 2025 and was $1.9 million for the three months ended July 31, 2024.
Current wording
General and Administrative. General and administrative (“G&A”) expenses were $22.7 million for the three months ended October 31, 2025, an increase of $1.5 million, or 7.1%, compared to $21.2 million for the three months ended October 31, 2024. This increase was driven primarily due to an increase in legal costs and credit card fees, partially offset by lower share-based compensation expense. G&A expenses as a percentage of revenue were 25.9%, compared to 27.9% last year. G&A related share-based compensation expense was $0.9 million for the three months ended October 31, 2025 and was $1.8 million for the three months ended October 31, 2024.
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