The RealReal’s second quarter was marked by positive momentum, with the market reacting strongly to revenue and profitability outperformance. Management attributed these results to successful execution of its growth playbook, which included enhanced marketing investment, a revamped sales team compensation structure, and a series of in-person events that generated high-value supply. CEO Rati Levesque highlighted the company’s ability to attract new consignors and leverage data-driven strategies, stating, “Our new consignor growth is a leading indicator for supply.” The company’s focus on operational efficiency, including the rollout of AI-powered tools in authentication and listing processes, also contributed to improved margins and reduced costs.
Is now the time to buy REAL? Find out in our full research report (it’s free).
The RealReal (REAL) Q2 CY2025 Highlights:
- Revenue: $165.2 million vs analyst estimates of $159.5 million (14% year-on-year growth, 3.6% beat)
- Adjusted EPS: -$0.06 vs analyst estimates of -$0.08 ($0.02 beat)
- Adjusted EBITDA: $6.84 million vs analyst estimates of $3.46 million (4.1% margin, 97.5% beat)
- The company lifted its revenue guidance for the full year to $670.5 million at the midpoint from $652.5 million, a 2.8% increase
- EBITDA guidance for the full year is $30.5 million at the midpoint, above analyst estimates of $27.41 million
- Operating Margin: -6%, up from -13% in the same quarter last year
- Active Buyers : 1 million, up 620,000 year on year
- Market Capitalization: $898.9 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From The RealReal’s Q2 Earnings Call
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Irwin Bernard Boruchow (Wells Fargo) asked for details on what drove the inflection in revenue growth and whether recent supply momentum would persist. CEO Rati Levesque responded that double-digit new seller growth and effective supply-side reinvestments underpin the outlook for continued momentum.
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Irwin Bernard Boruchow (Wells Fargo) also pressed on gross margin and take rate trends, noting lower take rates with higher-value items. CFO Ajay Gopal confirmed that higher average order values reduce take rate percentages but increase gross profit dollars, with margin stability expected around 74%–75%.
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Robert Brooks (Northland Capital Markets) inquired about expansion with luxury vendors and international consignors. CEO Rati Levesque explained that the drop ship initiative is in early testing, expanding to new categories and international partners to drive incremental supply.
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Ashley Anne Owens (KeyBanc Capital Markets) asked about changes in new consignor acquisition and the impact of new tools. Levesque detailed the effectiveness of the Reconsign feature, referral programs, and retail pop-ups in driving record new consignor growth and highlighted strong performance in new store markets.
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Jay Daniel Sole (UBS) questioned the impact of a potential luxury market slowdown on resale trends. Levesque responded that product and brand diversity allows RealReal to adapt to changing demand, and that primary market price increases tend to benefit resale pricing.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be tracking (1) the pace of Athena AI’s rollout and resulting reductions in processing costs, (2) the ability of new supply channels—especially drop ship and international partnerships—to sustain high consignor and buyer growth, and (3) the impact of ongoing marketing and retail investments on supply acquisition. Execution on expanding operating leverage and maintaining gross margin stability will also be critical benchmarks.
The RealReal currently trades at $7.85, up from $5.53 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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