The RealReal Hits Profitability Milestone in Q4 After ‘Strategic Shift’ to Focus on Core Business


The RealReal Inc.’s focus on consignment — and the bottom line — started to pay off for the resale pioneer in the fourth quarter.

The company hit a long-promised milestone with adjusted earnings before interest, taxes, depreciation and amortization of $1.4 million million in the quarter. That was a first for the company and a nearly $22 million improvement from a year earlier. 

While that is a big jump, the company still has a way to go when it comes to net losses, which narrowed to $22 million from $39 million a year earlier. Revenues for the quarter ended Dec. 31 fell 10 percent to $143 million, representing gross merchandise value of $451 million. 

And John Koryl, who’s been chief executive officer of The RealReal for a year, told analysts on a conference call that after a series of adjustments to its operations, The RealReal was on track to break even on an adjusted EBITDA basis this year. 

“The RealReal is starting off 2024 with solid momentum from a business, operations and organizational perspective,” Koryl said. “Our improved financial results in 2023 were driven by our strategic shift to refocus on our core consignment business. We refined our growth model with a focus on profitable supply. As part of these efforts, we reduced direct revenue by half, overhauling our Consignor Commission structure and revamped our approach to sales and marketing.”

Using a consignment approach lets the RealReal make money on the sale while never having to actually own the goods and stockpile the inventory.  

“Looking ahead, a new initiative of Drop-ship Consignment, previously referred to as Virtual Consignment, has the potential to unlock incremental supply from trusted partners,” he said. “Operationally, our results in 2023 were a significant step forward on our path to profitability. We are beginning to deliver efficiencies from our investments in automation and artificial intelligence. In 2024 we are focused on enhancing our technological capabilities and processes to improve the product flow in our authentication centers and further automating our authentication. While these initiatives require a small investment in Q2 of this year, we are bullish on the long term benefits. It will enable us to continue to enhance our best-in-class authentication and deliver a superior experience to our customers.”

Investors approved and sent shares of the company up 18.6 percent to $2.10 in after-hours trading. 

Koryl also managed to get the company a little more breathing room on its balance sheet with an updated capital structure. 

“We entered into a private, separately negotiated debt exchange transactions with certain holders of our convertible senior notes due in 2025 and 2028,” the CEO said. “As a result of the debt exchange transactions, we reduced our total indebtedness by more than $17 million, creating substantial runway and capital structure flexibility for us to execute on our strategic vision… Through growing profitable supply, driving operational efficiencies and delivering exceptional service to our consignors and buyers, we believe we can continue to make significant progress on the bottom line as we re-accelerate growth in 2024.”



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