The RealReal’s first quarter results were met with a sharp negative market reaction, as investors weighed growth in active buyers and improved operating margins against softer sentiment for the company’s full-year outlook. Management credited the quarter’s 11% revenue increase to a robust acquisition of new consignors, with CEO Rati Levesque highlighting the success of initiatives like the Get Paid Now program and enhanced retail operations. CFO Ajay Gopal pointed to “operational efficiencies in our fulfillment centers and customer support functions” as key drivers of margin expansion, while acknowledging that the majority of growth stemmed from a disciplined focus on high-value supply and technology-enabled process improvements.

Is now the time to buy REAL? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions The RealReal’s Q1 Earnings Call

• Ashley Owens (KeyBanc Capital Markets) asked about sustainability of direct channel margins. CFO Ajay Gopal explained that 20%+ gross margin is expected to be sustainable due to improved mix and selective use of Get Paid Now.
• Ike Boruchow (Wells Fargo) questioned whether increased direct sales would pressure gross margins. Gopal responded that the direct channel’s size remains small and is not expected to dilute overall margin rates.
• Marvin Fong (BTIG) inquired about average order value trends and category drivers. CEO Rati Levesque highlighted strength in fine jewelry and handbags, with average order value increasing 5% year-over-year.
• Bobby Brooks (Northland Capital Markets) sought clarity on new consignor growth and key drivers. Levesque attributed gains to targeted sales efforts, improved referral and reconsignment programs, and streamlined onboarding processes.
• Mark Altschwager (Baird) asked about the impact of tariffs and macro shifts on revenue guidance. Management reiterated that domestic sourcing shields the company from tariffs and that any primary market price increases could motivate more supply and buyer activity.

Catalysts in Upcoming Quarters

In coming quarters, our analysts will monitor (1) the pace of new consignor acquisition and supply growth, (2) the profitability trajectory of the direct channel as Get Paid Now and drop ship scale, and (3) the impact of AI-driven automation on operational efficiency and margins. Additionally, the effectiveness of marketing and referral programs in driving high-value supply will be an important indicator of execution.

The RealReal currently trades at $5.14, down from $7.30 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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