Rent the Runway, Inc. (NASDAQ:RENT) Q1 2022 Earnings Conference Call June 9, 2022 4:30 PM ET

Company Participants

Janine Stichter - Vice President of Investor Relations

Jenn Hyman - Co-Founder, Chairman & Chief Executive Officer

Scarlett O’Sullivan - Chief Financial Officer

Conference Call Participants

Lauren Schenk - Morgan Stanley

Ike Boruchow - Wells Fargo

Ross Sandler - Barclays

Eric Sheridan - Goldman Sachs

Michael Binetti - Credit Suisse

Abbey Zvejnieks - Piper Sandler

Andrew Boone - JMP Securities

Ashley Helgans - Jefferies

Dana Telsey - Telsey Advisory Group

Operator

Greetings. Welcome to the Rent the Runway First Quarter 2022 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host Janine Stichter, Vice President of Investor Relations. You may begin.

Janine Stichter

Good afternoon, everyone and thanks for joining us to discuss Rent the Runway's first quarter 2022 results.

Before we begin, we'd like to remind you that this call will include forward-looking statements. These statements include our future expectations regarding our financial results and guidance, market opportunities and our growth. These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially. These risks, uncertainties and assumptions are detailed in this afternoon's press release as well as our filings with the SEC, including our Form 10-Q that will be filed in the next few days. We undertake no obligation to revise or update any forward-looking statements or information except as required by law.

During this call, we'll also reference certain non-GAAP financial information. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Reconciliations of GAAP to non-GAAP measures can be found in our press release, slide presentation posted on our investor website and our SEC filings.

And with that, I'll turn it over to Jenn.

Jenn Hyman

Hi, everyone. Thanks for joining us today. We are very proud of our strong Q1 performance which showcases our accelerated business momentum, robust subscriber engagement and improved year-over-year profitability. We exceeded our Q1 guidance across all key metrics both on the top and bottom line. We grew revenue 100% year-over-year and grew gross margin by 9 points year-over-year. Adjusted EBITDA margin came in five points above Q1 2021.

We finished Q1 with 135,000 ending active subscribers, hitting a new record high for quarterly ending active subscribers. Additionally, our subscribers are increasingly more profitable for three key reasons. One, the margins of our new subscription plans, whose rollout was completed last year in May 2021, are nearly double what they were in 2019. Two, subscribers are more loyal than pre-COVID. And three, they are highly engaged, evidenced by the rate at which they opt to pay for additional items in their subscriptions, meaning they rent many items from us for more use cases.