Rent the Runway, Inc.
For the period ended Jan 31, 2026. Filed Apr 14, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Apr 14, 2026
RENT$2.26+3.2%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-01-31; filed 2025-04-15.
0001468327-25-000056
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-01-31; filed 2026-04-14.
0001468327-26-000020
Item 7. 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 169 previous paragraphs and 171 current paragraphs.
75 unchanged; 73 reworded; 23 added; 20 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 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
Key Fiscal Fourth Quarter and Recent Business Highlights:
Current report
•Drove Significant Growth in Active Subscriber Base: Ended Fiscal Year 2025 with 143,796 active subscribers, representing a 20% year-over-year increase. This growth was supported by making our largest ever inventory investment last year, which served as the primary lever to driving substantial improvements in subscriber loyalty.
Current report
•Record levels of Customer Satisfaction: Achieved 39% year-over-year growth in Subscription Net Promoter Score for fiscal year 2025, which has more than tripled since 2022
Current report
•Achieved Significant Success in Subscription Add-ons: Fourth quarter of fiscal year 2025 add-on revenue grew by 67% year-over-year, increasing from 40% in the third quarter, 24% in the second quarter and 4% in the first quarter. We’re aiming to expand on this momentum in 2026 to drive higher revenue per subscriber by expanding membership flexibility, giving her more freedom to get the inventory she wants when she wants it, and higher cross-sell across our offerings.
Current report
•Launched RTR Marketplace Pilot: In March 2026, we began testing a highly curated purchase destination for wardrobe essentials—including shoes, beauty, and basics—to a subset of loyal subscribers with the goal to drive order "attach rates." According to a 2025 customer survey, 86% of respondents expressed interest in purchasing complementary items from Rent the Runway.
Current report
•Search and Browsing Experience: We have recently launched a series of improvements that make it easier for our customers to find styles to rent. We have a new search algorithm that we launched in February 2026 that has performed approximately 10% better in subscription conversion rate; in December 2025, we launched a new AI-driven similar styles recommendation across our product detail pages (PDPs) and introduced Quick Hearting, a new way of browsing that now powers 28% of her new hearts.
Current report
•A Continued Shift to Bold Authenticity in our Marketing Strategy: In 2025 we changed the way we market by leading with our community first, and as of April 2026, we have over 1,900 creators across our community programs. In the fourth quarter of fiscal year 2025, our total social audience was up 15% year-over-year and CGC (customer generated content) grew over 3x year-over-year, primarily driven by creator-led content on Instagram and TikTok. Our “Muse” content engine surpassed 13 million impressions in the fourth quarter of fiscal year 2025 and has since driven 20 million impressions in February and March 2026 alone. In fiscal year 2026, we are allocating a portion of our paid media marketing budget to continue to further scale these community-led, organic, word-of-mouth channels.
Current report
•Investing in AI-Driven Discovery in Fiscal Year 2026. We are working to transform the customer experience in 2026 from a traditional e-commerce grid to an AI-powered discovery model. We are focused on building an enhanced discovery platform to allow our customer to better search for inventory by being able to browse in outfit groupings, improve conversational search, and view items in robust PDPs with visual versatility, including seeing the item in motion and in her size. We’re also leaning into Answer Engine Optimization (AEO) and SEO strategies with a goal of ensuring that Rent the Runway is the top destination for discovery online.
Current report
•Revenue was $329.8 million and $306.2 million, respectively, representing 7.7% growth year-over-year;
Current report
•Net cash (used in) provided by financing activities was $18.6 million and $(0.3) million, respectively;
Current report
•Cash and Cash Equivalents was $50.4 million and $77.4 million, respectively.
Current report
Net Income (Loss) was $22.6 million for the year ended January 31, 2026 compared to $(69.9) million for the year ended January 31, 2025, representing margins of 6.9% and (22.8)%, 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. Adjusted EBITDA was $24.9 million for the year ended January 31, 2026 compared to $46.9 million for the year ended January 31, 2025, representing margins of 7.6% and 15.3%, respectively. Adjusted EBITDA decreased year-over-year primarily due to lower Gross Profit, higher Technology costs, and higher General & Administrative costs. Adjusted EBITDA Margin decreased year-over-year primarily due to lower Gross Margins, higher Technology costs as a percentage of Revenue partially offset by lower Marketing costs as a percentage of Revenue and lower General & Administrative costs as a percentage of Revenue.
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
Total Revenue, Net. Total revenue, net was $329.8 million for the year ended January 31, 2026, an increase of $23.6 million, or 7.7%, compared to $306.2 million for the year ended January 31, 2025. This increase was driven by higher Subscription and Reserve rental revenue and higher Other revenue. Infiscal year 2026, we expect revenue to increase due to higher Subscription prices and a larger subscription customer base due to a particular focus on increasing our Active Subscribers year-over-year.
Current report
Costs and Expenses. Total costs and expenses were $387.3 million for the year ended January 31, 2026, an increase of $33.6 million, or 9.5%, compared to $353.7 million for the year ended January 31, 2025. This increase was primarily driven by higher Revenue Share costs, higher Fulfillment costs, higher Technology costs and higher G&A costs. The increase was partially offset by lower Rental Product Depreciation and Write-Off expense, lower Other Depreciation and Amortization expense and lower Marketing costs.
Current report
Fulfillment. Fulfillment expenses were $88.5 million for the year ended January 31, 2026, an increase of $5.7 million, or 6.9%, representing 26.8% of revenue, compared to $82.8 million for the year ended January 31, 2025, representing 27.0%of revenue. The increase in fulfillment dollars wasprimarily driven by higher transportation costs due to carrier rate increases, increases in warehouse processing costs, and an increase in orders due to higher average active subscribers. Fulfillment costs decreased as a percentage of revenue due primarily to higher revenue per order partially offset by higher transportation and processing costs per order.
Current report
For fiscal year 2026, it is difficult to predict fulfillment costs as a percentage of Revenue.
Current report
Gain on Debt Restructuring. Gain on Debt Restructuring was $96.3 million for theyear ended January 31, 2026. The gain was recognized from the troubled debt restructuring from the Recapitalization Transactions completed in October 2025.
Current report
Net Income for the year ended January 31, 2026 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 year ended January 31, 2026, 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
Our Adjusted EBITDA was $24.9 million for the year ended January 31, 2026 compared to $46.9 million for the year ended January 31, 2025, representing margins of 7.6% and 15.3%, respectively. Adjusted EBITDA decreased year-over-year primarily due to lower Gross Profit, higher Technology costs, and higher General & Administrative costs. Adjusted EBITDA Margin decreased year-over-year primarily due to lower Gross Margins, partially offset by lower Marketing costs as a percentage of Revenue and lower General & Administrative costs as a percentage of Revenue.
Current report
(9)Reflects the gain recognized from the troubled debt restructuring from the Recapitalization Transactions completed in October 2025.
Current report
(10)Includes other (income) / expense recognized in the period.
Current report
On October 28, 2025, we completed recapitalization transactions to enhance our financial position and financial flexibility by significantly reducing our existing indebtedness, improving our borrowing rate and extending the maturity of our remaining indebtedness (the “Recapitalization Transactions”). Under the terms of the Recapitalization Transactions, we entered into the New Credit Agreement. The 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 our 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. Our minimum liquidity maintenance covenant was also reduced from $30 million to $15 million until February 20, 2027 prior to its removal pursuant to the First Amendment to the New Credit Agreement on January 28, 2026 (the “First Amendment”). We also received $12.5 million in proceeds from a concurrent rights offering. On April 1, 2026, the Company entered into the Second Amendment to the New Credit Agreement (the “Second Amendment”). The Second Amendment provides the Company with the ability to capitalize interest in lieu of cash payments until May 3, 2027.
Removed paragraphs (20)
Previous report
Recent Business Highlights:
Previous report
•Returned to our customer-obsessed roots. Refocused our team on the customer. We launched our “We Heard You” customer campaign to showcase that we have listened to our customer and are laser-focused on what matters to her most, including by investing more in the rental product she desires.
Previous report
•Announced the largest rental product acquisition in company history. Expecting to approximately double the new rental product coming onto the platform in fiscal year 2025. This is anticipated to include a 3-4 times increase in units on average from key brands most desired by customers.
Previous report
•Expanded our cost-efficient models to acquire rental product, including the Share by RTR revenue share program and Exclusive Designs collections. Total units from the Share by RTR program are expected to increase to approximately 62% of total units in fiscal year 2025, a 2.5 times increase versus fiscal year 2024. We believe that this expansion highlights RTR’s ability to serve as a marketing channel for brands.
Previous report
•Rapidly improving the customer experience through a steady drumbeat of product innovations. In response to direct customer feedback and designed to improve retention, we have launched and are expecting to launch:
Previous report
◦60-day customer promise, giving new members risk-free renting for their first two months, meaning we will replace any item that does not fit or feel right for free.
Previous report
◦Back-in-stock notifications for customer-hearted items, which sends customers a notification when a favorite item becomes available. We plan to further expand in-stock notifications for specific styles and sizes in the near future, which is our #1 most requested new feature.
Previous report
◦Enhancements to our personalized new customer onboarding experience, where members of our customer service team call new members personally to review the details of how RTR works, and answer any questions.
Previous report
◦Stylist in product, which connects customers to a stylist over text or Zoom to help guide her selection of styles.
Previous report
•Revenue was $306.2 million and $298.2 million, respectively, representing 2.7% growth year-over-year;
Previous report
•Cash and Cash Equivalents was $77.4 million and $84.0 million, respectively.
Previous report
Net Loss was $(69.9) million for the year ended January 31, 2025 compared to $(113.2) million for the year ended January 31, 2024, representing margins of (22.8)% and (38.0)%, respectively. Net Loss improved year over year primarily due to our fixed cost reduction efforts, lower stock based compensation, lower net interest expense, and higher revenue partially offset by higher rental product depreciation and revenue share expenses. Adjusted EBITDA was $46.9 million for the year ended January 31, 2025 compared to $26.9 million for the year ended January 31, 2024, representing margins of 15.3% and 9.0%, respectively. Adjusted EBITDA margin improved year over year due to our fixed cost reduction efforts, higher revenue, lower marketing expenses, and lower fulfillment costs partially offset by higher revenue share payments due to a greater proportion of revenue share units.
Previous report
Loss on Asset Impairment Related to Restructuring. Loss on asset impairment related to restructuring consists of asset impairment charges related to the discontinuation of a software implementation project and two warehouse operations projects in connection with the January 2024 and September 2022 restructuring plans.
Previous report
Total Revenue, Net. Total revenue, net was $306.2 million for the year ended January 31, 2025, an increase of $8.0 million, or 2.7%, compared to $298.2 million for the year ended January 31, 2024. This increase was primarily driven by the increase in units purchased per subscriber combined with an increase in Reserve revenue.
Previous report
In fiscal year 2025, 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 report
Costs and Expenses. Total costs and expenses were $353.7 million for the year ended January 31, 2025, a decrease of $(24.5) million, or(6.4)%, compared to $378.2 million for the year ended January 31, 2024. This decrease wasprimarily driven by cost savings from the January 2024 restructuring plan, lower share-based compensation expense, lower marketing expense, improvement in warehouse labor productivity, and lower hosting costs which reduced costs compared to the same period last year, offset by higher rental product depreciation and revenue share.
Previous report
Fulfillment. Fulfillment expenses were $82.8 million for the year ended January 31, 2025, a decrease of $(3.2) million, or (3.7)%, representing 27.0% of revenue, compared to $86.0 million for the year ended January 31, 2024, representing 28.8%of revenue. The decrease in fulfillment dollars and as a percentage of revenue was primarily driven by warehouse processing cost efficiencies and higher revenue per shipment that offset an increase in wage rates during the first quarter of fiscal year 2024.
Previous report
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 and continued processing efficiencies.
Previous report
Loss on Asset Impairment Related to Restructuring. Loss on asset impairment related to restructuring was $0.0 million for the year ended January 31, 2025, a decrease of $(1.1) million, or (100.0)%, compared to $1.1 million for the quarter and year ended January 31, 2024. The loss on asset impairment during the year ended January 31, 2024 related to the discontinuation of a software implementation project in connection with the January 2024 restructuring plan. The charge is reflected in Loss on asset impairment related to restructuring on our Consolidated Statements of Operations.
Previous report
(9)Primarily includes the monetization of tax credits and government grants for the years ended January 31, 2025 and January 31, 2023.
Reworded paragraphs (73)
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 164,004 ending total subscribers 2 (active and paused) as of January 31, 2025. We had 119,778 active subscribers as of January 31, 2025. The majority of our revenue is highly recurring and is generated by our subscribers. For the years ended January 31, 2025 and 2024, respectively, 88% 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 3.5 million lifetime customers across all of our offerings and we had 183,552 ending Total Subscribers 2 (active and paused) as of January 31, 2026. We had 143,796 Active Subscribers as of January 31, 2026. The majority of our revenue is highly recurring and is generated by our subscribers. For the years ended January 31, 2026 and 2025, respectively, 90% and 88% of our total revenue (including Reserve and Resale revenue) was generated by subscribers while they were active or paused.
Previous wording
•119,778 and 125,954 ending Active Subscribers 3 (excluding paused subscribers), respectively, representing a change of (5)% year-over-year;
Current wording
• 143,796 and 119,778 ending Active Subscribers 3, respectively, representing a change of 20.1% year-over-year;
Previous wording
•132,574 and 135,211 Average Active Subscribers 4, respectively, representing a change of (2)% year-over-year;
Current wording
•143,558 and 132,574 Average Active Subscribers 4, respectively, representing a change of 8.3% year-over-year;
Previous wording
•164,004 and 173,247 ending Total Subscribers (including paused subscribers), respectively, representing a change of (5)% year-over-year;
Current wording
•183,552 and 164,004 ending Total Subscribers (including paused subscribers), respectively, representing a change of 11.9% year-over-year;
Previous wording
•Gross Profit was $115.9 million and $119.7 million, respectively, representing a gross margin of 37.9% and 40.1%, respectively;
Current wording
•Gross Profit was $107.5 million and $115.9 million, respectively, representing a gross margin of 32.6% and 37.9%, respectively;
Previous wording
•Net Loss was $(69.9) million and $(113.2) million, respectively. Net Loss as a percentage of revenue was (22.8)%, and (38.0)%, respectively, and included $0.2 million and $3.1 million of restructuring and related charges, respectively;
Current wording
•Net Income (Loss) was $22.6 million and $(69.9) million, respectively. Net Income (Loss) as a percentage of revenue was 6.9%, and (22.8)%, respectively, and included $0.2 million of restructuring and related charges for the year ended January 31, 2025;
Previous wording
•Adjusted EBITDA was $46.9 million and $26.9 million, respectively, representing an Adjusted EBITDA margin of 15.3% and 9.0%, respectively;
Current wording
•Adjusted EBITDA was $24.9 million and $46.9 million, respectively, representing an Adjusted EBITDA margin of 7.6% and 15.3%, respectively;
Previous wording
•Net cash (used in) provided by operating activities was $12.9 million and $(15.7) million, and net cash used in investing activities was $(20.1) million and $(54.6) million, respectively;
Current wording
•Net cash (used in) provided by operating activities was $3.5 million and $12.9 million, and net cash used in investing activities was $(49.5) million and $(20.1) million, respectively;
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•Net cash used in operating activities as a percentage of revenue was 4.2% and (5.3)% and net cash used in investing activities as a percentage of revenue was (6.6)% and (18.3)%, respectively; and
Current wording
•Net cash (used in) provided by operating activities as a percentage of revenue was 1.1% and 4.2% and net cash used in investing activities as a percentage of revenue was (15.0)% and (6.6)%, respectively; and
Previous wording
We acquire and monetize products in three ways: Wholesale, Share by RTR and Exclusive Designs. These three product acquisition methods are strategic levers to manage our capital efficiency, profitability and product risk. Our Exclusive Designs channel partners with brands to acquire RTR-exclusive items at a lower cost, which are designed to generate higher profitability over time. Share by RTR meaningfully reduces our upfront purchases of rental product and de-risks our investment since we pay brands primarily based on item performance. Our Share by RTR arrangements with brands target deliv ering 75% to 100% ofcomparable Wholesale cost to the brand in the first year; however there is no minimum commitment other than the upfront payment, if applicable. Nearly all Share by RTR deals consummated after September 2020 include a cap on total potential payments to the brand partner.
Current wording
We acquire and monetize products in three ways: Wholesale, Share by RTR and Exclusive Designs. These three product acquisition methods are strategic levers to manage our capital efficiency, profitability and product risk. Our Exclusive Designs channel partners with brands to acquire RTR-exclusive items at a lower cost, which are designed to generate higher profitability over time. Share by RTR meaningfully reduces our upfront purchases of rental product and de-risks our investment since we pay brands primarily based on item performance. Our Share by RTR arrangements with brands target deliv ering 75% to 100% of comparable Wholesale cost to the brand in the first twelve to eighteen months; however there is no minimum commitment other than the upfront payment, if applicable. Nearly all Share by RTR deals consummated after September 2020 include a cap on total potential payments to the brand partner.
Previous wording
The chart below summarizes the percentage of new items acquired via each method. In total, approximately 70% of new items were acquired through the more capital-efficient channels in fiscal year 2024, approximately 61% in fiscal year 2023 and approximately 58% in fiscal year 2022. 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 Consolidated Statement of Cash Flows) as a percentage of revenue over time. 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, Exclusive Designs and Share by RTR over time. 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
The chart below summarizes the percentage of new items acquired via each method. In total, approximately 69% of new items were acquired through the more capital-efficient channels in fiscal year 2025, approximately 70% 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 Consolidated Statement of Cash Flows) as a percentage of revenue over time. We aim to acquire approximately the same quantity of rental product year-over-year in fiscal year 2026; however, we expect the total percentage of units acquired through our more capital-efficient channels to increase in fiscal year 2026 versus fiscal year 2025, with an increase in the percentage of units acquired through our Share by RTR program versus fiscal year 2025. 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 lower capital expenditures for purchases of rental product in fiscal year 2026 relative to fiscal year 2025 due to a greater proportion of rental product acquired through our Share by RTR program in fiscal year 2026.
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 have 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 quality 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. In fiscal year 2025, we approximately doubled the quantity of our rental product acquisitions year-over-year and enhanced the desirability of rental product acquisitions, which we believe increased customer satisfaction and improved retention versus fiscal year 2024. We also focused on new product features as well as a more personalized customer experience. In fiscal year 2026, we expect to continue to make efforts to increase customer retention through improved customer experience with our rental product as well as new product features.
Previous wording
As seen in the table below, our LTV to CAC ratio has remained relatively consistent for our fiscal year 2018 through fiscal year 2024 customer cohorts, with the exception of our fiscal year 2020 cohort which was impacted by the COVID-19 pandemic. The fiscal year 2021 cohort, which benefited from strong loyalty post-recovery from the pandemic, exhibited an LTV to CAC ratio of 0.7x in its first six months and 1.3x in its first twelve months, implying that we recovered our customer acquisition cost between six months and twelve months for this cohort. Our fiscal year 2024 cohort thus far is exhibiting an LTV to CAC ratio of 0.5x in its first six months. We anticipate that the improvement in customer retention due to the greater satisfaction with our rental product along with product experience improvements will benefit the lifetime value of our customer cohorts. The performance of our historical cohorts has been consistent as our more loyal customers continue to spend with us.
Current wording
As seen in the table below, our LTV to CAC ratio has remained relatively consistent for our fiscal year 2018 through fiscal year 2025 customer cohorts, with the exception of our fiscal year 2020 cohort which was impacted by the COVID-19 pandemic. The fiscal year 2021 cohort, which benefited from strong loyalty post-recovery from the pandemic, exhibited an LTV to CAC ratio of 0.7x in its first six months and 1.3x in its first twelve months, implying that we recovered our customer acquisition cost between six months and twelve months for this cohort. Our fiscal year 2025 cohort thus far is exhibiting an LTV to CAC ratio of 0.3x in its first six months, down slightly from recent years due to the impact of the company’s decision to significantly increase the quantity and quality of rental product available to customers. We anticipate that the improvement in customer retention due to the greater satisfaction with our rental product, the impact of the company’s August 2025 Subscription price increase, and anticipated product experience improvements will benefit the lifetime value of our customer cohorts. The performance of our historical cohorts has been consistent as our more loyal customers continue to spend with us.
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 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 2024, approximately 70% of new items were acquired through our more capital efficient non-Wholesale channels, compared to 61% in fiscal year 2023 and 58% in fiscal year 2022. We plan to further increase the percentage of units acquired through Exclusive Designs and Share by RTR on a combined basis in fiscal year 2025. 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. 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 2025, approximately 69% of new items were acquired through our more capital efficient non-Wholesale channels, compared to 70% in fiscal year 2024 and 61% in fiscal year 2023. We plan to further increase the percentage of units acquired through Exclusive Designs and Share by RTR on a combined basis in fiscal year 2026. We continuously evaluate our product acquisition mix to maximize our strategic priorities.
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 January 31, 2025, the quarterly and annual spend levels for rental product capital expenditures for fiscal year 2025 under our 2025 Amended Facility have not yet been finalized. Pursuant to the 2025 Amended Facility, the deadline to agree on such levels was extended from March 31, 2025 to May 30, 2025.
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 2025 increased to 23% from 16% in fiscal year 2024, despite higher Share by RTR units as a percentage of total receipts, as a result of our strategy to approximately double the quantity of rental product purchases versus fiscal year 2024. Purchases of rental product as a percentage of revenue was 16% and 26% in fiscal year 2024 and 2023, respectively. We anticipate this percentage to decrease in fiscal year 2026 compared with fiscal year 2025 due to an increase in the proportion of units acquired through our Share by RTR channel. 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 January 31, 2026, 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 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. Though we anticipate quarterly fluctuations in operating leverage, we expect our fixed costs to decrease as a percentage of total revenue in fiscal year 2025, and over time we anticipate that our operating costs will grow more slowly than our total revenue on an annual basis. As of January 31, 2025, the quarterly and annual spend levels for rental product capital expenditures for fiscal year 2025 under our 2025 Amended Facility have not yet been finalized. Pursuant to the 2025 Amended Facility, the deadline to agree on such levels was extended from March 31, 2025 to May 30, 2025.
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.
Previous wording
We use technology and customer data to drive efficiency across products, fulfillment expenses and operating costs. Our data has allowed us to build a differentiated and proprietary rental reverse logistics platform with a vertically integrated cleaning and restoration process. We have invested in technology and automation in order to drive operating leverage and higher margins as we grow and scale our business.
Current wording
We use technology and customer data to drive efficiency across products, fulfillment expenses and operating costs. Our data has allowed us to build a differentiated and proprietary rental reverse logistics platform with a vertically integrated cleaning and restoration process. We have invested in technology and automation in order to drive operating leverage and higher margins as we focus on growing and scaling our business.
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. The 2025 Amended Facility reduced our cash interest payments during fiscal year 2024 and reduces our cash interest payments during fiscal year 2025 relative to the original agreement, 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 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
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 December and January. From time to time, our seasonality patterns have been impacted due to the effects of COVID-19, the macro environment, and business decisions and may in the future continue to evolve and not reflect historical trends. Examples of business decisions that have impacted seasonality in prior periods include, but are 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. It is difficult to predict all of relevant reasons and ways that seasonality trends could change in the future.
Previous wording
For additional information, see the section of Part I, Item 1A, “Risk Factors — Risks Relating To Our Business and Industry — Our business is affected by seasonality.”
Current wording
For additional information, see the section of Part I, Item 1A, “Risk Factors — Risks Related To Our Business and Industry — Our business is affected by seasonality.”
Previous wording
There remains significant uncertainty in the current macroeconomic and consumer environment, driven by several factors, including inflationary pressures, global trade policies and tariffs, higher interest rates, potential risk of recession, ongoing industry-wide supply chain issues, instability in the financial system, and the wars in Ukraine and the Middle East. These factors have impacted, and are expected to continue to impact, consumer discretionary spending and purchasing behavior, price sensitivity, wage rates, transportation costs, and other costs associated with our business.
Current wording
There remains significant uncertainty in the current macroeconomic and consumer environment, driven by several factors, including inflationary pressures, global trade policies and tariffs, higher interest rates, potential risk of recession, ongoing industry-wide supply chain issues, instability in the financial system, and the wars in Ukraine and the Middle East. These factors have impacted, and are expected to continue to impact, consumer discretionary spending and purchasing behavior, price sensitivity, wage rates, transportation costs, rental product costs, and other costs associated with our business.
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 the first quarter of fiscal year 2024, and expect to raise wages in the first quarter of fiscal year 2025, to attract and retain talent at our fulfillment centers. We expect to continue to be impacted by rising labor costs in the future. Transportation costs decreased as a percentage of revenue in fiscal year 2024 due to higher revenue per order and the benefits of our September 2023 transportation contract with a major national carrier. While we expect to be able to reduce transportation costs as a percentage of revenue for fiscal year 2025, we plan to continue to mitigate longer-term rising costs by seeking to optimize shipping methods and improve contractual and pricing terms; however, unpredictable changes in global trade policies and tariffs or other significant macroeconomic or geopolitical developments may negatively impact our ability to meet our current expectations and objectives. Although we continue to face a challenging and unpredictable 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, we increased wage rates during the first quarter of fiscal years 2025 and 2026 to attract and retain talent at our fulfillment centers. We expect to continue to be impacted by rising labor costs in the future. In addition, we implemented a price increase for our subscription plans in August 2025 and expect to implement pricing increases and/or new or additional fees in the future if costs continue to rise. We aim to continue to mitigate longer-term rising costs through a variety of methods, including by seeking to optimize shipping methods and improve contractual and pricing terms. However, the global trade environment is unpredictable and evolving and macroeconomic or geopolitical developments have in the past and, may in the future, negatively impact our ability to meet our current expectations and objectives, including due to unfavorable policies and tariffs, and rising shipping costs. In addition, steps we take may not fully mitigate rising costs. For example, the conflict in the Middle East has led to fuel surcharges that have increased our shipping costs, which are likely to continue to increase if the conflict continues. As a result, it is also difficult to predict what transportation costs as a percentage of Revenue will be in fiscal year 2026. Although we continue to face a challenging and unpredictable 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
In addition to the measures presented in our 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 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 January 31, 2025, we had 119,778 Active Subscribers, a decrease from 125,954 as of January 31, 2024. The decrease in active subscribers was driven primarily by lower acquisitions during the year compared to the prior year due to a change in promotional strategy during the second quarter of fiscal year 2024 versus the same quarter last year and a reduction in marketing spend. The decrease in acquisitions was partially offset by improved subscriber retention.
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 January 31, 2026, we had 143,796 Active Subscribers, an increase from 119,778 as of January 31, 2025. The increase in Active Subscribers was driven primarily by higher subscriber acquisitions versus fiscal year 2024, driven in part by higher promotional activity, and by improved subscriber retention versus fiscal year 2024. We expect Active Subscribers to grow year-over-year in fiscal year 2026.
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 January 31, 2025, we had 132,574 Average Active Subscribers, a decrease from 135,211 as of January 31, 2024. The decline in average active subscribers was primarily due to lower acquisitions during the year compared to the prior year. The decrease in acquisitions was partially offset by improved subscriber retention.
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 January 31, 2026, we had 143,558 Average Active Subscribers, an increase from 132,574 as of January 31, 2025. The year-over-year increase in Average Active Subscribers was primarily due to higher subscriber acquisitions versus fiscal year 2024, driven in part by higher promotional activity, and by improved subscriber retention versus fiscal year 2024.
Previous wording
Gross Profit was $115.9 million for the year ended January 31, 2025 compared to $119.7 million for the year ended January 31, 2024 representing Gross Margins of 37.9% and 40.1%, respectively. Gross Profit and Gross Margin for the year ended January 31, 2025 decreased due to the impact of higher revenue share costs and rental product depreciation as a percentage of sales, partially offset by lower fulfillment costs as a percentage of sales.
Current wording
Gross Profit was $107.5 million for the year ended January 31, 2026 compared to $115.9 million for the year ended January 31, 2025 representing Gross Margins of 32.6% and 37.9%, respectively. Gross Profit for the year ended January 31, 2026 decreased primarily due to higher Revenue share costs and higher Fulfillment expenses partially offset by higher Revenue and lower Rental Product depreciation and write-off costs. Gross Margin for the year ended January 31, 2026 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 and lower Fulfillment 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, loss on asset impairment related to restructuring, income tax (benefit) expense, other income and expense, and other gains / losses. Adjusted EBITDA margin 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 netincome (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, loss on asset impairment related to restructuring, 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
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 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
Other Revenue. We generate Other revenue primarily from the sale of products while they are in rental condition. We offer the ability for subscribers and customers to purchase products at a discount to retail price. Payment for the sale of products occurs upon order confirmation while the associated revenue is recognized either at the time the sold product is delivered or when purchased, if the item is already at home with the customer. From time to time, Other revenue may include revenue generated from pilots and other growth initiatives which may cause quarterly fluctuations in the Other revenue line.
Current wording
Other Revenue. We generate Other revenue primarily from the sale of products while they are in rental condition. We offer the ability for subscribers and customers to purchase products at a discount to retail price. Payment for the sale of products occurs upon order confirmation while the associated revenue is recognized either at the time the sold product is delivered or when purchased, if the item is already at home with the customer. From time to time, Other revenue may include revenue generated from pilots and other growth and business development initiatives which may cause quarterly fluctuations in the Other revenue line.
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. We expect to incur lower fixed cost G&A as a percentage of revenue in the short term due to higher expected revenue driving operating leverage. 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 include 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
Restructuring Charges. Restructuring charges consist of severance and related costs associated with the January 2024 and September 2022 restructuring plans.
Current wording
Restructuring Charges. Restructuring charges consist of severance and related costs associated with the January 2024 restructuring plan.
Previous wording
The 2023 Amended Temasek Facility eliminated all interest (both payment-in-kind and cash interest) for a period of six full fiscal quarters beginning with the fourth quarter of fiscal year 2023.
Current wording
Interest Income / (Expense). Interest income / (expense) consists primarily of accrued paid-in-kind interest, cash interest and debt issuance cost amortization associated with our 2025 Amended Facility going forward. The 2023 Amended Temasek Facility eliminated all interest (both payment-in-kind and cash interest) for a period of six full fiscal quarters beginning with the fourth quarter of fiscal year 2023.
Previous wording
Subscription and Reserve Rental Revenue. Subscription and Reserve rental revenue was $265.5 million for the year ended January 31, 2025, an increase of $0.6 million, or 0.2%, compared to $264.9 million for the year ended January 31, 2024. This increasewas primarily driven by an increase in Reserve revenue compared to the same period last year.
Current wording
Subscription and Reserve Rental Revenue. Subscription and Reserve rental revenue was $286.0 million for the year ended January 31, 2026, an increase of $20.5 million, or 7.7%, compared to $265.5 million for the year ended January 31, 2025. This increasewas primarily driven by higher average active subscribers and higher revenue per subscriber, partially offset by lower Reserve rental revenue.
Previous wording
Other Revenue. Other revenue was $40.7 million for the year ended January 31, 2025, an increase of $7.4 million, or 22.2%, compared to $33.3 million for the year ended January 31, 2024. This increase was primarily driven by an increase in the items purchased per subscriber and an increase in the average selling price per unit. Other revenue represented 13.3% of total revenue, up from 11.2% in the same period last year.
Current wording
Other Revenue. Other revenue was $43.8 million for the year ended January 31, 2026, an increase of $3.1 million, or 7.6%, compared to $40.7 million for the year ended January 31, 2025. This increase was primarily driven by higher Average Active Subscribers and higher average selling price per item, partially offset by lower items purchased per average subscriber. Other revenue represented 13.3% of total revenue, compared to 13.3% in the same period last year.
Previous wording
Technology. Technology expenses were $35.7 million for the year ended January 31, 2025, a decrease of $(13.4) million, or (27.3)%, compared to $49.1 million for the year ended January 31, 2024. This decrease was driven primarily 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 11.7% of revenue for the year ended January 31, 2025 compared to 16.5% 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 $1.9 million for the year ended January 31, 2025 and was $5.5 million for the same period last year.
Current wording
Technology. Technology expenses were $39.3 million for the year ended January 31, 2026, an increase of $3.6 million, or 10.1%, compared to $35.7 million for the year ended January 31, 2025. Technology expenses were 11.9% of revenue for the year ended January 31, 2026 compared to 11.7% for the same period last year due to higher technology related employee costs. Technology related share-based compensation expense was $0.8 million for the year ended January 31, 2026 and was $1.9 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 2026, we expect technology expenses to decrease as a percentage of total revenue compared to fiscal year 2025.
Previous wording
Marketing. Marketing expenses were $28.2 million for the year ended January 31, 2025, a decrease of $(3.0) million, or (9.6)%, compared to $31.2 million for the year ended January 31, 2024. This decreasewas driven primarily by lower paid marketing expenditures. Marketing expenses unrelated to personnel costs were $25.4 million in the year ended January 31, 2025 and 8.3% of revenue, compared to $28.5 million and 9.5% of total revenue for the same period last year.
Current wording
Marketing. Marketing expenses were $27.0 million for the year ended January 31, 2026, a decrease of $(1.2) million, or (4.3)%, compared to $28.2 million for the year ended January 31, 2025. This decrease was driven primarily by lower brand marketing expenses and lower marketing consulting costs. Marketing expenses unrelated to personnel costs were $24.0 million in the year ended January 31, 2026 and 7.3% of revenue, compared to $25.4 million and 8.3% of total revenue for the same period last year.
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Previous report — wording carried elsewhere
Interest Income / (Expense). Interest income / (expense) consists primarily of accrued paid-in-kind interest, cash interest and debt issuance cost amortization associated with our 2025 Amended Facility going forward.