The RealReal Hits Financial Milestone With Adjusted EBITDA for 2024

Evan Clark
·2-min read

The RealReal Inc. hit a financial milestone last year — and is looking to keep the momentum up.

The resale company released preliminary results that showed it logging adjusted earnings before interest, taxes, depreciation and amortization of $9 million to $9.5 million for 2024.

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That’s both better than the $4.7 million to $7.7 million the company forecast in November and light years ahead of the $55.2 million deficit seen in 2023.

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Rati Levesque, who became The RealReal’s chief executive officer in October, said the year “marked an important inflection point for our business” and that “we’re just getting started.”

And the company ended the year with some momentum as fourth-quarter adjusted EBITDA is slated to range from $10.7 million to $11.2 million, marking only the third time The RealReal has seen a quarter positive adjusted EBITDA.

As the luxury resale pioneer, The RealReal helped spark the modern secondhand movement, but it is still trying to prove out the business case for its model.

Keeping EBITDA up will help build that case.

Ajay Gopal, chief financial officer of The RealReal, said: “The RealReal has made tremendous headway on our growth and profitability goals. We look forward to continuing this momentum in 2025, expanding adjusted EBITDA margin through the combination of our growth playbook and operational efficiencies driven by our data, technology, and AI capabilities.

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“We delivered significant gross margin improvements in 2024, setting the stage for consistent and largely sustainable rates going forward,” Gopal said. “We will continue to stay focused on accelerating full-year growth and delivering operating leverage. For full-year 2025, we expect adjusted EBITDA in the range of $20 million to $30 million, which demonstrates the power of this business model as we scale.”

The company also gained a little more breathing room on its debt.

The RealReal entered into a debt exchange, trading in $183 million, or 65 percent, of its 1 percent convertible senior notes due 2028, for $147 million in new 4 percent convertible senior notes due 2031.

Levesque said: “We are pleased to reduce our total indebtedness by approximately $37 million, adding to the $17 million reduction made in February 2024. This represents another milestone as we rebalance our debt maturity cycle, strengthen our financial position, enhance our capital structure flexibility, and continue executing on our strategic pillars.”

The company’s shareholders remained cautious, sending its shares down 4 percent to $8.03 on Monday.

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