Rent the Runway’s IPO filing on Monday is a selling tale of both a post-pandemic rebound that investors could find quickly — and one of the eye-popping losses that didn’t get much massage of non-GAAP metrics. could.
why it matters: Venture-backed companies have done very well in selling publicly and to investors because of their lack of profits. But Rent the Runway is turning the dial.
zoom in: Rent the Runway specifically adds back the depreciation of its rental apparel into its earnings calculation—a metric it quickly earned compared to WeWork’s infamous “community-adjusted” earnings calculation.
- Despite the conspiracies, the company’s adjusted earnings are still negative for both 2020 ($18 million) and 2021 ($8.1 million).
- And while customers and revenue, both of which shrank significantly during the pandemic, are holding back, the company still managed to make a big loss from its revenue for both 2020 and 2021.
- It posted $171.1 million in net loss for 2020 on $157.5 million in revenue and $84.7 million in net loss for the first half of this year on $80.2 million in revenue. To be fair, in 2019, there was $153.9 million in net losses on $256.9 million in revenue.
Bottom-line: Rent the Runway is asking investors to take a big gamble not only on its ability to get back on track but also on big trends completely out of its control — namely, that women want to wear fancy clothes again.