Rent the Runway reported second-quarter fiscal 2026 revenue of $97.7 million, an increase of 20.8% from $80.9 million a year earlier and an all-time quarterly revenue high for the company.
The fashion rental company also significantly improved profitability, reducing its net loss to $12.9 million from $26.4 million in the prior-year period. Net loss represented 13.2% of revenue compared with 32.6% a year earlier.
Adjusted EBITDA increased to $12.6 million from $3.6 million, while Adjusted EBITDA margin expanded to 12.9% from 4.4%.
Gross profit increased 45.3% to $35.3 million, and gross margin expanded to 36.1% from 30.0%, an improvement of approximately 609 basis points.
Rent the Runway said the improvement reflected stronger gross margins and continued operating expense discipline.
Subscriber trends were mixed. Ending Active Subscribers declined 3.8% to 140,826 from 146,373, while Average Active Subscribers increased 1% to 148,259.
Total Subscribers increased 0.5% to 186,019.
The company’s add-on business continued to grow rapidly. Add-on bookings increased 81% year over year, and 33% of subscribers used an add-on during the quarter compared with 29% a year earlier.
Rent the Runway is also expanding its use of artificial intelligence to improve product discovery.
The company completed the rollout of AI-powered outfit generation to all customers after beginning a pilot in May. Engagement with the feature is running at approximately 35%, and during the pilot customers with access to the capability added items to their bags approximately 12% more often than customers without it.
In August, Rent the Runway introduced avatars within its outfit experience to help customers visualize recommended looks across different body types. The company also started testing virtual try-on technology intended to show users how individual products might look before they rent or purchase them.
At the same time, management is narrowing the company’s strategic focus around its core rental and resale operations.
Rent the Runway paused its online marketplace pilot until it can be integrated more fully with the rental experience, paused on-site advertising and monetization efforts and stopped pursuing additional B2B dry-cleaning opportunities while continuing to serve an existing partner.
The company also announced a leadership transition.
Paige Thomas has been named Chief Executive Officer and President and will join Rent the Runway’s board effective September 14, 2026.
Thomas succeeds Teri Bariquit, who had served as Interim CEO and President since May. Bariquit will become non-executive Chair of the Board.
Dhiren Fonseca will step down as Executive Chairman but remain a director.
Thomas joined Rent the Runway as Chief Commercial Officer in June 2026 and brings more than 30 years of retail experience. Her previous roles include Chief Merchant and Product Innovation Officer at Signet Jewelers and President and CEO of Saks OFF 5TH. She also spent more than a decade at Nordstrom, including five years overseeing Nordstrom Rack.
Rent the Runway ended the quarter with $29 million in cash and cash equivalents, compared with $43.6 million a year earlier. Net cash used in operating activities was $5 million, while investing activities used $16.6 million.
For the fiscal third quarter, the company expects revenue between $87 million and $90 million and an Adjusted EBITDA margin between negative 3% and negative 6%.
For the full fiscal year, Rent the Runway reaffirmed expectations for double-digit revenue growth and an Adjusted EBITDA margin between 4% and 7%.
The company also reduced its planned Rental Product Acquired range to $53 million to $55 million, compared with $74.9 million in fiscal 2025.
KEY QUOTES:
“Rent the Runway is operating from a focused foundation, with a core rental business that continues to grow and a customer who is telling us what she values most. This quarter we concentrated our resources on that core, delivered capabilities against the discovery experience we committed to at the start of the year, and began building a 2027 plan centered on transforming the business.”
Teri Bariquit, Interim Chief Executive Officer and President of Rent the Runway
“I’m focused on listening to our customer and making every decision through her lens, doubling down on fashion and what makes this fashion service platform unique, while executing with operational excellence. This is not a new direction—it’s an acceleration of the strong foundation the team has built. The path is clear, and I’ve never been more excited to lead the team forward.”
Paige Thomas, Chief Executive Officer of Rent the Runway
“Second quarter results were strong with revenues that reflect an all-time high for the company and profit margin expansion that is driven by our operating discipline and highlights how we intend to run the business. We remain committed to strengthening our liquidity position with the improved free cash flow in the first half and additional funding support from our investor group.”
Dave Loretta, Interim Chief Financial Officer and Treasurer of Rent the Runway
