RealReal NASDAQ: REAL reported second-quarter results that included record gross merchandise value and higher profitability, prompting the luxury resale marketplace to raise its full-year outlook.
Gross merchandise value, or GMV, rose 22% year over year to an all-time high of $617 million, marking the company’s fourth straight quarter of GMV growth above 20%. Revenue increased 17% to $193 million, while adjusted EBITDA reached $13.5 million, or 7% of revenue, representing a 290-basis-point improvement from a year earlier.
“Q2 was another standout quarter for our business,” President and Chief Executive Officer Rati Sahi Levesque said. She cited stronger buyer activity, engaged consignors and margin expansion as evidence that the company’s strategy is gaining momentum.
Higher-Value Mix Supports Growth
Orders increased 8% in the quarter, while average order value climbed 13% to $659. Chief Financial Officer Ajay Gopal said recent growth has been weighted more toward pricing and higher-value goods, as consumers purchase more expensive luxury items across categories.
Sales of items priced above $1,000 increased 36% in the first half of 2026 compared with the prior year, according to Gopal. The company said growth in those items was broad-based across fine jewelry, watches, handbags and ready-to-wear apparel, with Levesque also pointing to unbranded jewelry as a contributor.
The shift toward higher-value merchandise reduced the company’s take rate by 200 basis points year over year to 35.9%. Gopal said those items generate a lower take-rate percentage but produce more profit dollars per transaction and have stronger unit economics. Gross margin nevertheless expanded 10 basis points to 74.4%, while gross profit rose 17% to $143 million.
Trailing 12-month active buyers grew 11% to more than 1.1 million. The company also reported increasing crossover between its buyer and seller bases: 44% of new consignors in the second quarter came from active buyers, compared with 40% two quarters earlier.
Levesque said the company is targeting younger consumers, with Gen Z and millennials its fastest-growing customer segments. New buyers were up by double digits during the quarter, she said, and are spending more on their first purchases.
Supply Channels and Store Expansion
The RealReal said its supply strategy is benefiting from several channels, including its luxury-manager sales force, professional referrals, stores and international dropship partnerships. Year-to-date supply per sales representative increased 15% from the prior year.
The company’s Real Partners referral program, which works with professionals such as stylists, real estate agents and closet organizers, brought in sellers who consigned four times the value of an average new consignor, according to Levesque.
The company also continued building an asset-light international supply network. It onboarded two large Japanese vendors to its dropship program in the second quarter, alongside partners in France and Italy. Levesque characterized the initiative as being in a test-and-learn phase, though she said July was the company’s highest-volume month for dropship activity.
The RealReal plans to open its first Boston-area store in the fall and another neighborhood store in the Los Angeles market. Along with a San Francisco location opened earlier this year, the additions are expected to bring the company’s store count to 20. Management said it intends to target one to three new stores annually going forward.
AI Investments Aim to Improve Operations and Discovery
Management highlighted artificial intelligence investments in intake processing, pricing, listing enrichment and product search. The company’s Athena AI-enabled intake system is on track to process nearly 50% of items by year-end, up from approximately 35% at the end of 2025.
Gopal said Athena initially focused on lower-value merchandise but is expanding to mid- and higher-value items. The system is intended to reduce processing costs by multiple dollars per unit, improve speed to sale and allow the company to handle greater volume with limited incremental headcount.
The company also said it has expanded its AI-based pricing algorithm beyond initial list pricing to manage discounts throughout an item’s lifecycle. The model uses more than 100 data points, including product category, historical data, page views and customer “obsession” activity, to determine pricing for consignment and dropship inventory.
In addition, The RealReal has begun testing an AI-powered conversational shopping agent in partnership with Google. Levesque said the tool is designed to provide more personalized product results from the company’s inventory of more than 1 million one-of-a-kind listings. Management said better product discovery could support conversion, reduce discounting and improve customer satisfaction.
Raised Outlook and Cash Flow Expectations
The company ended the quarter with $134 million in cash equivalents and restricted cash. Operating cash flow was $2 million, an improvement of $5 million from the previous year, while free cash flow improved by $9 million. Gopal said the company expects strong positive free cash flow in both the third and fourth quarters.
For the third quarter, The RealReal forecast GMV of $610 million to $620 million, representing 17% to 19% year-over-year growth. Revenue is projected at $194 million to $198 million, up 12% to 14%, with adjusted EBITDA expected between $13.5 million and $14.5 million.
For the full year, the company raised its GMV outlook to $2.535 billion to $2.565 billion, implying 19% to 20% growth. It expects revenue of $788 million to $797 million, or growth of 14% to 15%, and adjusted EBITDA of $66 million to $69 million. The midpoint implies an adjusted EBITDA margin of 8.5%, approximately 240 basis points above 2025.
Management reiterated its medium-term target of adjusted EBITDA margins between 15% and 20%, with Gopal saying the company expects to balance growth investments and profitability while targeting roughly 200 to 300 basis points of annual margin expansion.
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.
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