Executives at Rent the Runway are describing the company as on a “path to FCF [free cash flow] profitability” following a strong fiscal 2022, which ended Jan. 31, 2023. Rent the Runway generated $296.4 million in revenues, a 46% increase YoY from the $203.3 million in FY21 revenues, and cut its net loss from $211.8 million the previous year to $138.7 million for FY22.
Rent the Runway also boosted its average active subscribers to 128,586 for the fiscal year, a 38% YoY increase from 93,371 at the end of FY21. The platform has continued that growth into the current fiscal year, reaching a record high 141,205 as of April 8.
“I’m proud that in fiscal 2022, we achieved 46% revenue growth and completed a significant financial transformation, doubling our gross margins compared to 2019, right-sizing our fixed cost base, improving the capital efficiency of our product acquisition and restructuring our debt,” said Jennifer Hyman, CEO and Co-founder of Rent the Runway in a statement. “These efforts drove progress on our path to FCF profitability, as we posted our first full year and third consecutive quarter of positive adjusted EBIDTA ahead of the timeline we outlined at IPO.”
Hyman also highlighted the impact of Rent the Runway’s new customer-centric strategy in 2023, including “changing all our subscription programs to include an additional item in every shipment, which has already improved retention and rejoin rates.”
For FY23, Rent the Runway is projecting active subscriber growth of more than 25%, revenue ranging from $230 to $330 million and a YoY reduction in cash consumption of almost 50%.
Rent the Runway also will promote Sid Thacker, currently the SVP for Financial Planning and Analysis, to CFO. He will replace Scarlett O’Sullivan, who will be leaving the post on May 25, 2023. Thacker has been with Rent the Runway since July 2022 and has more than 20 years’ experience as a public investor.