Revenue growth of 29% YoY and guidance reaffirmation are positive, but the 560bps gross margin decline, negative operating cash flow, and CEO departure create offsetting headwinds. Watch Q2 guidance ($91-95M revenue, 5-8% Adj. EBITDA margin) for execution on margin recovery and the permanent CEO search for strategic clarity.
Price Chart
Executive Summary
Rent the Runway reported Q1 2026 revenue of $89.9M, up 29.2% YoY and above its own guidance, while net loss improved to $(18.9)M from $(26.1)M YoY. The company reaffirmed FY26 guidance for double-digit revenue growth and 4-7% Adjusted EBITDA margin, but gross margin compressed sharply to 25.9% from 31.5% YoY and operating cash flow turned negative at $(3.8)M. The filing also announced the departure of co-founder/CEO Jennifer Hyman and appointment of an interim CEO, CFO, and CCO, adding leadership transition risk.
Key Financial Metrics
Key Facts
- Revenue $89.9M, +29.2% YoY, above Q1 guidance of $85-87M
- Net loss $(18.9)M vs $(26.1)M YoY; net loss per share $(0.57) vs $(6.26)
- Gross margin 25.9% vs 31.5% YoY, a 560bps decline
- Adjusted EBITDA $(0.8)M vs $(1.3)M YoY; margin (0.9)% vs (1.9)%
- Operating cash flow $(3.8)M vs +$8.3M YoY; free cash flow $(13.6)M vs $(6.4)M
- Active subscribers 155,692, +5.8% YoY; average active subscribers +12.2% YoY
- FY26 guidance reaffirmed: double-digit revenue growth, Adj. EBITDA margin 4-7%, rental product acquired $45-50M
- CEO Jennifer Hyman stepped down; Teri Bariquit appointed Interim CEO; Dave Loretta named Interim CFO; Paige Thomas named CCO
- Cash and equivalents $37.1M, down from $50.4M at Jan 31, 2026
Financial Impact
Revenue beat guidance by ~$3M at midpoint; gross margin compression of 560bps YoY is material; operating cash flow swung negative by $12.1M YoY
Risk Factors
- Gross margin compression from higher rental product depreciation and revenue share costs
- Leadership vacuum with CEO, CFO, and CCO all in interim roles
- Cash burn: cash declined $13.3M in Q1 to $37.1M; free cash flow negative $(13.6)M
- Operating cash flow swung from +$8.3M to -$3.8M YoY
- FY26 guidance assumes no material deterioration from tariffs or macro conditions
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001468327-26-000029 |
| Document: wdq-20260603.htm | 0001468327-26-000029 |
| Document: 0001468327-26-000029-index-headers.html | 0001468327-26-000029 |
| Document: 0001468327-26-000029-index.html | 0001468327-26-000029 |
| Document: 0001468327-26-000029.txt | 0001468327-26-000029 |
| 8-K Data (Synthetic) | 0001468327-26-000029 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 26, 2026 today | 8-K | $2.69 | awaiting T+1 | — | $2.63 (+2.23%) |
Oct 23, 2026 3d ago | Insider Cluster | $2.44 | awaiting T+1 | — | $2.63 (+7.79%) |
Oct 23, 2026 3d ago | SC 13D/A | $2.30 | awaiting T+1 | — | $2.63 (−14.35%) |
Oct 16, 2026 10d ago | SC 13D/A | $1.86 $2.02 | ▲ +8.60% | ▲ +8.27% | $2.63 (+41.40%) |
Oct 14, 2026 12d ago | 8-K | $1.81 $1.76 | ▼ −2.76% | ▼ −1.66% | $2.63 (+45.30%) |
Oct 1, 2026 26d ago | EFFECT | $1.65 $1.55 | ▲ +6.06% | ▲ +6.80% | $2.63 (−59.39%) |
Sep 30, 2026 27d ago | 8-K | $1.65 $1.65 | · 0.00% | ▲ +0.18% | $2.63 (−59.39%) |
Sep 28, 2026 29d ago | S-1/A | $1.61 $1.68 | ▼ −4.35% | ▼ −4.53% | $2.63 (−63.35%) |
Sep 18, 2026 5w ago | 144 | $1.86 $1.94 | ▲ +4.30% | ▲ +2.75% | $2.63 (+41.40%) |
Sep 15, 2026 5w ago | 8-K | $1.94 $1.93 | ▼ −0.52% | ▼ −1.65% | $2.63 (+35.57%) |
US Market Status
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