RealReal (NASDAQ:REAL) executives said 2025 marked a “transformative” year for the luxury resale platform, highlighting accelerating growth, expanding profitability, and a full-year milestone of more than $2 billion in gross merchandise value (GMV). On the company’s fourth quarter 2025 earnings call, Chief Executive Officer and President Rati Levesque and Chief Financial Officer Ajay Gopal pointed to progress across three strategic pillars—growth, operational excellence, and service—as key drivers of both momentum and margin improvement.
Fourth quarter results highlighted 22% GMV growth and higher profitability
In the fourth quarter, the company reported GMV of $616 million, up 22% year-over-year. Gopal said growth was driven “roughly evenly” by unit volume and higher average selling prices. Total revenue rose 18% to $194 million, with consignment revenue up 16% and direct revenue up 39% compared to the prior-year quarter.
Gopal said operating expenses were $139 million and leveraged 600 basis points year-over-year as a percentage of revenue, attributing the improvement to greater use of AI and automation, higher sales team productivity, and leverage on fixed costs.
Buyer engagement and supply mix shifted toward higher-value categories
Management emphasized both supply and demand trends. In the quarter, active buyers, orders, and average order value all increased year-over-year. On a trailing 12-month basis, active buyer growth accelerated to 9%. Gopal said orders rose 10% and average order value increased 11% versus the prior year, which he attributed in part to success in “unlocking supply,” particularly in higher-value categories such as fine jewelry and watches.
The company’s take rate in the quarter was 36.5%, down 120 basis points year-over-year. Gopal said the decline reflected a favorable mix shift into higher-value items that carry lower percentage take rates but generate higher profit dollars and stronger unit economics.
Levesque also described the company’s “flywheel” dynamic, noting that 40% of new consignors come from the existing buyer base, which management views as a cost-effective way to expand supply while deepening loyalty.
Athena automation and AI initiatives tied to efficiency and faster listing cycles
A significant theme during the call was the company’s use of AI to improve efficiency. Levesque said the company met its goal of exiting 2025 with 35% of all units “fully flowing through Athena,” its proprietary AI-enabled intake process designed to blend human expertise with automation.
In response to analyst questions, management said 35% of fulfillment center units were processed through Athena at year-end and described it as a primary driver of operating leverage. Gopal said Athena and other automation efficiencies contributed to “Austin Tech” deleveraging, with that line leveraging 330 basis points for the year. He said the company plans to expand Athena’s coverage into mid-value items and then higher-value items, a process expected to play out over multiple quarters.
Management also linked Athena to improved speed-to-site. Gopal explained that items flowing through Athena move quickly because they go to photography and can be launched on the website shortly after images are completed, reducing the need for multiple handoffs and shortening cycle times, which the company believes increases consignor satisfaction.
Full-year performance surpassed $2 billion GMV and delivered positive adjusted EBITDA each quarter
For the full year 2025, the company reported GMV of $2.13 billion, up 16% year-over-year, and revenue of $693 million, up 15%. Full-year gross profit rose 15% to $517 million, while gross margin increased 10 basis points to 74.6%.
Adjusted EBITDA for the full year was $42 million, or 6.1% of revenue, representing 450 basis points of margin expansion versus the prior year. The company generated $37 million in operating cash flow and $5 million in free cash flow for the year.
In the fourth quarter alone, the company generated operating cash flow of $49 million and free cash flow of $43 million, which Gopal said was a $23 million improvement year-over-year. The quarter ended with $166 million in cash, cash equivalents, and restricted cash. Gopal added that over the past two years the company reduced total indebtedness by more than $80 million.
2026 outlook calls for continued growth and margin expansion
Looking ahead, management guided to full-year 2026 GMV growth of 12% to 15% and revenue growth of 10% to 13%, with gross margin expected to remain “relatively consistent” with 2025. Adjusted EBITDA is projected between $57 million and $65 million, which management said equates to roughly an 8% margin at the midpoint and nearly 200 basis points of expansion versus 2025. The company reiterated its medium-term target of 15% to 20% adjusted EBITDA margins.
For the first quarter, the company expects GMV growth of 19% to 22% and revenue growth of 16% to 18%. First quarter adjusted EBITDA is expected between $11 million and $13 million, or approximately 6% to 7% of revenue, implying 340 to 430 basis points of margin expansion year-over-year. Gopal said direct revenue is expected to be 12% to 15% of total revenue in the first quarter.
In Q&A, management said it did not see a slowdown from fourth quarter trends and described buyers and sellers as “resilient.” Executives said they are seeing improved sales conversion and productivity through tools such as Smart Sales, continued momentum from turning buyers into consignors, and early positive results from AI-driven discovery and search tests that are improving new buyer conversion.
Other initiatives discussed included ongoing dropshipping tests—beginning with watches and expanding into handbags and jewelry with targeted partners—as well as supply-related efforts such as referrals and affiliate programs and the company’s retail strategy, which management said is contributing meaningfully to new seller acquisition. Levesque also outlined plans to expand “My Closet,” including testing features that provide on-demand valuation and earnings estimates and building tools to increase pricing transparency and deepen long-term consignor relationships.
About RealReal (NASDAQ:REAL)
The RealReal, Inc (NASDAQ: REAL) operates an online marketplace specializing in the authenticated resale of luxury goods. Since its founding in 2011 by entrepreneur Julie Wainwright, the company has positioned itself as a leading platform for consignors and shoppers seeking designer fashion, fine jewelry, watches, art, and home décor. Headquartered in San Francisco, The RealReal combines e-commerce technology with an in-house team of experts to offer a seamless buying and selling experience for secondhand luxury items.
At the core of The RealReal’s business model is its consignment service, which enables individuals to sell pre-owned luxury products through a fully managed process.
