Q3 2024 Rent the Runway Inc Earnings Call and Business Update
Welcome to rent the runway third quarter 2024 earnings results Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
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Speaker Change: I would now like to turn the call over to rent the runway <unk>, chief legal and administrative officer Paresh Ambry.
Speaker Change: You may begin.
Paresh Ambry: Good morning, everyone and thanks for joining us today. During this call we will make references to our Q3 'twenty 'twenty four earnings presentation, which can be found in the events and presentations section of our Investor Relations website before we begin we would like to remind you that this call will include forward looking statements. These statements include our future.
Paresh Ambry: Patients regarding financial results guidance and target market opportunities and our growth. These statements are subject to various risks uncertainties and assumptions that could cause our actual results to differ materially. These risks uncertainties and assumptions are detailed in today's press release as well as our filings with the SEC, including our Form 10-Q that we plan to buy.
Paresh Ambry: Later today, we undertake no obligation to update any forward looking statements or information, except as required by law. During this call. We will also reference certain non-GAAP financial information and the presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with.
Speaker Change: GAAP reconciliations of GAAP to non-GAAP measures can be found in our press release slide presentation posted on our Investor website, and our SEC filings and with that I'll turn it over to John Thanks, Kara and thank you everyone for joining we entered 'twenty 'twenty four laser focused on bringing our business to free cash flow breakeven and written.
Speaker Change: Turning rent the runway to growth I'm pleased to report that we were well that we are well on our way on both fronts and are reiterating our guidance that we will be free cash flow breakeven this fiscal year.
Speaker Change: This is a huge accomplishment for a business that burn to $70 million in cash last year, and we believe it proves that our business model is sustainable and our margins are attractive on the growth front. The most important work that we've done is realigning our organization around growth. This realignment has come from one simplifying.
Speaker Change: Key internal goals and processes to transforming talent in critical areas by recruiting the right external talent and elevating and orienting internal talent towards growth and three setting up a cross functional teams with clear mandates and resources to work in an agile manner towards their goals.
Speaker Change: Thus far our special event rental business reserve is up 21% year over year in Q3, our resale business is up 23% year over year in Q3, and we've achieved significant gains in the loyalty amongst our post 90 days subscribers. Our plan is to spend 2025.
Speaker Change: Ratings subscriber growth and we feel set up to win here. The rental market is now established what was a radical idea. When we started 15 years ago to rent designer clothes is now mainstream with women of all ages more comfortable with renting than ever before we have much progress to share, but first let's cover the financials Q2.
Q3 revenue was $75 9 million at the midpoint of our 75 to 77 million guidance range up four 7% year over year Q3 was our fourth consecutive quarter of positive year over year revenue growth and the fastest one of the four we achieved this acceleration of.
Speaker Change: Despite strategically pulling back on our retail business in order to preserve availability up newer inventory for subscribers adjusted EBITDA with $9 3 million or 12, 3% of revenue.
Below are 13% to 15% margin guidance, primarily due to lower than expected other revenue free cash flow for Q3 was negative $3 4 million, a 14 million year over year improvement. We are now three out of four quarters of the way through our journey towards free cash flow burn.
Speaker Change: You bet and are very proud that year to date free cash flow, it's $38 million better than 2023, and $61 million better than 2022, turning back to the business, let's start with inventory, which is one of the most consequential strategic decisions, we make every year or 'twenty two.
Speaker Change: For bi.
Speaker Change: Has greatly resonated with customers first the utilization of our new inventory was very high and up 530.
Speaker Change: That's year over year, meaning our customers highly demanded what we brought in two hearts for style increased 23, 3% year over year proving that she desired the inventory more and third lung rate of the inventory increased by 800 Bucks year over year proving that she is more.
Speaker Change: Satisfied with it once you where is it.
Speaker Change: In reserve orders grew 23% year over year and the productivity of our top styles increased retail units sold per subscribers on units. They already had at home grew 38% year over year proving that try before you buy is a key benefit of our subscription program and allows us to keep our inventory.
Speaker Change: Rash, we also made progress against the merchandising goals that I outlined on our Q1 goal Q1 call time to pick for our early term subscribers has decreased 15% and merchandising improved our hearts for style on older inventory by six 7% showcasing the desirability of new to the customer.
Speaker Change: Inventory that may in fact be from last season or the season before we are also continuing to test ways to launch more personalized and more frequent merchandising changes, including through the use of AI as we've communicated before inventory satisfaction is an important predictor of growth rates across our revenue loss.
Speaker Change: Our data shows that we do a great job picking styles, our customers love, we feel confident that we can drive considerable business growth in 2025 by investing even more into inventory both breadth and depth, we see in our data that our customer cares about using rent the runway to access a certain set of designer brand.
Speaker Change: <unk> that have outsized demand in high velocity on our platform in 2025, we plan to significantly increase the breadth of styles and deaths from our top 25 pillar brands on rent the runway across the board. These brands outperformed on utilization Hearts velocity of how quick.
Speaker Change: They've got stocked out and customer satisfaction, we know that the inventory availability of our rental platform will never be perfect. But we think we can do an even better job in the brand. She loves most we also plan to leverage the incredible inventory acquisition platforms. We have created in our revenue share program and our exclusive design.
Speaker Change: Collections to help drive this inventory growth in a capital efficient manner.
Speaker Change: Let's turn to some more highlights from Q3 first up reserve on our last call. We shared that in August. The first month of Q2, we have seen orders up around 23% year over year.
Speaker Change: We are pleased to confirm that momentum continued through the entire quarter with orders for Q3, ending up around 23% year over year equally important new customers into reserve grew at an even faster pace up approximately 36% year over year. We achieved these results by a series of strategic stuff.
Speaker Change: As we shared last quarter, we stopped a cross functional pods solely focused on reserves in the summer we expanded our reserve booking window, which increased bookings. We also implemented a series of changes to improve productivity such as removing buffer days and expediting turnaround time in our warehouses as a result, we've seen that the number.
Speaker Change: [noise] of units that turned two plus times in October was 46% higher than the prior year. We also leaned into the reserve customer experience by reinforcing our customer promise our fifth guaranty throughout the user journey and started to focus on upsell via UX changes that encourage the addition of additional styles and accessories.
Speaker Change: Looking ahead into 2025, we have a robust roadmap of improvements that we believe will drive continued revenue growth and reserve side.
And in Q3, we've seen significant efficiencies in paid marketing that have enabled us to free up dollars to invest into initiatives to reignite our brand reigniting our brand will take time, but we believe that it's critical to increasing new customers and to rent. The runway you get improved organic traffic and paid marketing we saw improvement for the second consecutive.
Speaker Change: <unk> quarter with Q3 tax better by 23% year over year. We believe this improvement has come from diversification of paid marketing channels as well as much improved creative content across all of our surfaces more tailored to that to the dynamics of that environment. We also believe our innovation and creative is critical.
Speaker Change: Again, enforcing with customers and prospects that we are a luxury proposition with higher end designer inventory and superior customer service that deserves a higher price point than our competitors. Our 15 year anniversary in November also saw the launch of our new brand campaign, Oh, nothing have everything which feature.
Speaker Change: Some of our most loyal customers and their stories, we believe the key to succeeding on social media is to have authenticity that the audience response to and making the stories of our customers. The centerpiece is a step in that direction more tactically on organic traffic. We believe we have a meaningful opportunity that we plan to capture it.
Speaker Change: Our C O improvements this past quarter, we saw new highs and our keyword rankings, which resulted in a 53% quarter over quarter growth in non branded impressions and 14% quarter over quarter increase in non branded traffic third towards the end of Q3, we launched a new subscription plan for.
Speaker Change: $119 per month customers get access to the all subscription rent the runway closet of Mark key designer brands in a five item one shipment of month offering our other five item plan limits customers to items with lower retail price points, one of our guiding and differentiating principles at rent the runway is that products sector.
Or to varying needs in life stages, the new $119 per month program is consistent with this strategy. We are eager to dig into the data on how the new planned resonates with prospects and how it impacts loyalty, thus far we've seen a sizable percentage of prospects joining this new plan.
Speaker Change: Fourth in the third quarter, we launched several initiatives designed to improve the onboarding experience in September we relaunched our customer promise for subscription during the customers first 60 days of subscription we will replace any item for any reason in October. We also launched a new styling team, who can book appointments with new.
Speaker Change: <unk> over phone text or zoom to help them take out items for their first shipments and recommend styles to try early indications are that these onboarding initiatives are improving loyalty and driving engagement. So we plan to scale them into Q4 and 2025. We also recently welcomed a new chief product officer, Bradford Shellhammer to rent.
The runway, whose career spans founding multiple high growth consumer startups, having a leadership role in product and E Bay for six and a half years, where he ran the entire buyer experience product organization and drove the company's successful product personalization mobile and focus categories, including fashion envisions Bradford was most recently.
Speaker Change: The chief product officer of Reverb and Etsy subsidiary. His focus is on all things growth with an emphasis on driving more prospect conversion on our platform and innovating the subscriber experience to drive higher loyalty.
Last but not least we've made text drive through Q3 that have enabled us to deliver better experiences to our customers. We rolled out our new faster loading breads improved load time resulted in a 33% increase in grids viewed per session and a 61% increase in onto that as.
Speaker Change: Customers could find items faster. We've also implemented tech upgrades that allow for faster and more frequent merchandising changes on UX. We started to see improved conversion, resulting from initiatives like delayed account creation and the launch of Apple pay finally, we relaunched our gift card programs in time for the holidays.
Speaker Change: In conclusion, this quarter and year to date, we have stayed laser focused on our free cash flow breakeven goal demonstrated our ability to buy the right inventory reemphasize the brand within marketing delivered on product technology and merchandising improvements and followed through on progress in the reserve business. We are excited to continue our work throughout.
Speaker Change: Q4, and enter 2025 with a culture fired up around growth are sustainable core business and momentum across our growth levers with that I'll turn it over to Sid.
Sid: Thanks, Jen and thank you everyone for joining us we continue to make good progress in the third quarter of fiscal 'twenty four with improvements in revenue growth and being active subscriber growth adjusted EBITDA and free cash flow.
Sid: Revenue growth of four 7% versus Q3, 23 was better than the four 2% year over year growth. We experienced in Q2 24. Indeed your over your revenue growth has shown improvement the fourth consecutive quarter.
Sid: Consistent with our expectation ending active subscribers returned to growth after declining year over year in Q2 24 as it.
Sid: A reminder, Q2 24, ending active subscribers were down six 2% versus Q2 23 due to changes in our promotional strategy ending active subscribers grew 0.6% in Q3 24 versus Q3 23 due to stronger year over year subscriber acquisition and retention versus the prior.
Water.
Sid: Adjusted EBITDA and free cash flow improved substantially versus Q3 23, adjusted EBITDA was 12, 3% of revenue in Q3 24 compared to four 8% of revenue in Q3 2023.
Sid: Adjusted EBITDA margins were slightly lower than Q3, adjusted EBITDA guidance of 13% to 15% of revenue primarily due to lower than expected. Other revenue, we chose to sell less inventory as our rental business continued to improve in addition, we expect the timing of inventory sales to third parties.
Sid: To be more Q4 weighted than originally anticipated.
Sid: As evidenced by our reiteration of full year adjusted EBITDA guidance, we continue to expect strong progress on profitability improvement this fiscal year.
Sid: Free cash flow for the nine months ending October 31, 2024 was negative $9 $3 million versus negative $47 $3 million for the nine months ended October 31 2023.
Sid: As I will outline in more detail, we are reiterating our guidance to be free cash flow breakeven for fiscal year 2024, Let me now provide a more detailed review of third quarter results.
Sid: We ended Q3, 'twenty four with 132518, ending active subscribers up approximately 0.6% year over year average active subscribers during the quarter with 130796 versus 134646 subscribers and the <unk>.
Sid: <unk> a decrease of two 9%.
Sid: Ending active subscribers increased from 129073 subscribers at the end of Q2, 'twenty four due primarily to strong acquisitions as well as improved retention versus the prior quarter.
Total revenue for the quarter was $75 $9 million up $3.4 million or four 7% year over year and down $3 million or three 8% quarter over quarter subscription and reserve rental revenue was up two 5% year over year in Q3 24.
Sid: Due to growth in our reserve business and higher revenue per average subscriber.
Other revenue increased 23, 1% or $1.8 million year over year.
Fulfillment costs were $21 $4 million in Q3, 24 versus $21 $5 million in Q3, 23 and $26 million in Q2 24.
Sid: Fulfillment costs as a percentage of revenue were lower year over year at 28, 2% of revenue in Q3 24 compared to 29, 7% of revenue in Q3, 23 fulfillment costs benefitted from higher resale revenue and continued warehouse efficiencies.
Sid: Gross margins were 34, 7% in Q3 24 versus 34, 8% in Q3, 23, Q3, 24 gross margins reflect higher rental product costs due to increased investment in inventory in fiscal year 'twenty three all of a sudden partially by improved fulfillment costs.
Sid: <unk> inventory investment reflects last year's depth adjustments to increase inventory in stock rates in fiscal 'twenty three and beyond.
Q3, 24 gross margins decreased quarter over quarter to 34, 7% from 41, 1% in Q2 24, due to seasonally higher revenue share payments and higher fulfillment costs as a percentage of revenue.
Sid: Operating expenses were $15, 1% lower year over year due primarily due to the favorable impact of our cost reduction efforts and lower stock based compensation expenses.
Sid: Total operating expenses, which includes technology marketing and G&A were 48, 7% of revenue in Q3 24 versus 61% of revenue in Q3, 23, and 49% of revenue in Q2 24.
Sid: Adjusted EBITDA for the quarter was $9 $3 million or 12, 3% of revenue versus $3 $5 million or four 8% of revenue in the prior year adjusted.
Sid: Adjusted EBITDA for the nine months ending October 31, 2024 was approximately $29 $5 million or 12, 8% of revenue versus $15 $7 million or seven 1% of revenue in the prior year.
Sid: Adjusted EBITDA improvement year over year reflects the impact of our fixed cost reduction efforts higher revenue and lower fulfillment costs, partially offset by higher revenue share payments due to a greater proportion of revenue share units.
Sid: Free cash flow for Q3, 24 was negative $3 $4 million versus negative $17 $7 million in Q3, twenty-three due primarily to lower cost of rental product and higher profitability.
Sid: Free cash flow for the nine months ending October 31st 2024 was negative $9 $3 million versus negative 47 $3 million in the nine months ending October 31, 2023, I will now discuss guidance for Q4, 'twenty four and physical.
Sid: The year 2024.
Let me start with revenue, we expect revenue for fiscal year 2024 to grow between 2% and 4% versus fiscal year 2023. As a result, Q4 2024 revenue is expected to be between $74.4 million and $83 million.
Sid: We are reiterating our full year adjusted EBITDA guidance of between 15% and 16% of revenue for fiscal year 2020 for.
Sid: This implies Q4, adjusted EBITDA of between $16 $1 million and $21 million. Finally, we are reiterating our free cash flow breakeven guidance for fiscal year 2020 for free cash flow in the fourth quarter of fiscal 'twenty four it is expected.
Sid: B approximately positive $9 $3 million, resulting in free cash flow breakeven for the fiscal year, Let me take a moment to walk through free cash flow progression from Q3, 'twenty four two Q4 'twenty for free.
Sid: Free cash flow for Q3, 24 was negative $3 $4 million, our adjusted EBITDA guidance for Q4 implies a $6 8 million to $10 8 million dollar improvement over Q3 'twenty four.
Sid: Further, we expect about $7 million and lower rental product capital expenditure versus Q3 dollars 24. The combination of these two factors is expected to result in positive free cash flow for Q4 'twenty four.
Sid: After taking into account differences in non inventory related capital expenditures and working capital changes, we expect to reach free cash flow breakeven for fiscal year 2024.
Sid: We have improved free cash flow significantly through the first three quarters of fiscal 'twenty four achieving our free cash flow goals for Q4, 24 will require executing on plans for the quarter as well as continued vigilance on cost control.
Sid: In summary, we believe these results demonstrate the continued improvement in underlying business trends at rent. The runway. We believe we have also demonstrated through the first nine months of this fiscal year and the ability to significantly improve free cash flow as Jenna outlined we are now squarely focused on accelerating growth in us.
Sid: Subscription business by listening to our customers and making decisions that lay the foundation for stronger growth in fiscal 'twenty five and beyond we will now take your questions.
Speaker Change: [laughter] thinking at this time well be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
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Speaker Change: Our first question comes from the line of Andrew Boone with citizens Janney. Please proceed with your question.
Good morning, and thanks, so much for taking my questions I wanted to ask is that correct for two revenue guide this quarter. It looks like it's a more or less $6 million guide for Q that compares to 2 million in the last three quarters can you talk about the widening of the range and what may be embedded at the high end versus the low end in terms of expectations.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: No we started the year with revenue guidance of 2% to 6% for the full year and we narrowed that range to 2% to 4% for the full year now the Q4 implied guidance range is really a function of the 2% to 4% guidance range for the full year now already about three quarters through the year. So it made sense to now.
Speaker Change: So the range to reflect the sort of likely range of outcomes for the year I think the mean.
Speaker Change: Variation of the main reason for the range is number one.
Speaker Change: Part of the reduction in the top end is a function of the other revenue.
Speaker Change: You know that we highlighted in Q3, and the fact that we actually want to hold onto more inventory both in Q3 as well as in Q4, because we see the rental business doing better as the Euro has progressed and then the second factor in terms of the range as well as the the reduction in the top end of the range is the timing of subscriber acquisitions and the impact of low.
Speaker Change: Our promotions as we discussed last quarter, which also factor into the decision. So I think the primary reason for the Q4 range is just just dependent on how much inventory we choose to sell in Q4, but it is not a reflection as we've seen over the past four quarters.
Speaker Change: Revenue growth has continued to accelerate we feel better about the underlying trends the subscription businesses and the reserve business is starting to do better. So it really isn't a function of anything other than us desiring to keep more inventory for our customers and the range is reflective of that that uncertainty.
Speaker Change: And then if I think about subscriber growth going forward right. It seems like there's traction with reserves better top of funnel and now as you guys think about new customers trying product. It seems like inventory is in a better place can you guys just outline the key levers as we think about subscriber growth for 2020.
Speaker Change: What what are the key metrics or operational initiatives that you guys have as we think about accelerating that subscriber growth next year.
Speaker Change: I think just to backtrack a bad you know just as a reminder.
Speaker Change: It between 'twenty, and 2020 'twenty free rent the runway was primarily in cost cutting and kind of Marvin you margin generation, but this is what we had to do at the time and it's certainly what we prioritize we prioritize it financially transporting our P&L when we entered 2024, we had confidence.
Speaker Change: That we would be able to bring the business to free cash flow break even this year, even in lower growth scenarios. So we had to go well, it's actually achieve free cash flow breakeven and less.
Speaker Change: Change the company from the culture of cost cutting back into growth mode.
So we were certainly successful between 2020 and 2023 in really transforming our P&L, we moved from an asset heavy business into it into an asset light business and this year, we have accomplished an enormous amount in setting up the business for growth. So number one we've changed talent.
Speaker Change: We've reoriented internal talent towards growth, we reorganized our business in terms of how we operate we simplified our goals. We have created cross functional teams to achieve these goals and we are already seeing really nice traction. So we talked about it as you mentioned in Q3 our reserve.
Business is up over 20% year over year, our resale business is up over 20% year over year.
Speaker Change: And that we're seeing some really nice leading indicators that subscription I'm going up like our loyalty rates and our tax going down. So now the whole business is really primed for our key growth lever, which is subscriber growth now how do we drive subscriber growth first and foremost.
Speaker Change: We're focused on inventory.
Speaker Change: So inventory is one of the most important the inventory position as one of the most important predictors of growth and we've set up these incredible inventory acquisition channels in our Rev share of business and our exclusive design business to be able to acquire a lot of inventory.
Speaker Change: Laurie at very low or no cost of capital.
Speaker Change: So we are investing heavily into our inventory position into 2025 as a key to unlock subscriber growth. So that's one component of that another component is that we've set up a cross functional team internally that we've mentioned over the last few calls focused on the subscriber onboarding.
Speaker Change: Spirits and improving therefore retention so between kind of the pod that's focused on subscriber experience and retention and between our focus on depth and breadth across inventory for 2025 to drive subscriber growth, we feel set up.
Speaker Change: Really to win here.
Speaker Change: That's helpful. And then just for my last question I wanted to double click on inventory.
Speaker Change: You guys have made some changes in terms of retail understood.
Speaker Change: Can you just talk about the timeline of when you guys will feel like inventories in the right place.
Speaker Change: Can you guys get there in the next quarter or two or is that more like in a bolting thing where we expect you know that's a multi year initiative.
Speaker Change: Sure.
Speaker Change: Okay. I don't think we want to get into specific plans for 25, I think what we will say is we can make me.
Speaker Change: I kind of bring you back to fiscal 'twenty three for a second just to show that we can actually make a fairly substantial improvement in a reasonably short period of time right. So if you recall in fiscal 'twenty three we talked a lot about in stock rates and the fact that in stock rates, where were an issue for us and we then effectively one fiscal year we were.
Speaker Change: <unk> able to buy and significantly more depth and you don't have that problem be significantly lower than it was so I think we can make a lot of progress. If you look at our you know.
Speaker Change: Our evolution of the channel mix that we purchased inventory through we have made considerable strides in relatively short periods of time on revenue share for instance, I mean, almost half of the units. We're buying this year coming from revenue share. So I think we're going to utilize all of the lessons we've learned both from what customers want and how to turn.
Speaker Change: That customer more appropriately the channels, we have unlocked and you know that the learnings we had to make some pretty quick progress on inventory.
We mentioned on this call that we have an enormous amount of data on what our customers love and we see that there are a set of brands on our platform that have.
Speaker Change: Incredibly high demand had high customer satisfaction rate has high Hearts have high love rate and on a rental platform you're never gonna have perfect availability at every point in time, but we certainly can improve our position and really quote unquote double down.
Speaker Change: Into these pillar brands to ensure that for the brands that people come to rent the runway for we're giving her an even better chance of being able to wear those brands. When she comes and so that's just an example of a strategy that we've already executed against for 'twenty.
Speaker Change: 25, as it relates to inventory and that's just about the distribution of our dollars that's not necessarily more dollars, that's saying okay. More of these top 25 pillar brands.
Speaker Change: I think the other thing to point out is if you think about this year for instance on inventory it isn't you know art.
Speaker Change: Making progress on inventory is it isn't something that necessarily requires.
Speaker Change: Most of the time this year has been really a function of running a very tight ship. We went from negative $70 million in cash consumption last year to what we expect will be free cash flow breakeven for the full year and as part of that we also needed to continue to make significant progress in diversifying the channel mix, making sure you know rent revenue share.
Speaker Change: Partners were comfortable without providing you know significantly more inventory and so on so I think what we're telling you is the building blocks are in place. The customers are responding as you can see with you know reserve and with retail and with the leading indication indicators the subscription business.
Speaker Change: Business is a breakeven it really now it's up to us to put in the investment to accelerate revenue growth and we're telling you that we're trying to do this in a way that preserves the capital and sustainability of the business and the cash characteristics of the business, a while really trying to accelerate the growth element of things.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Ashley Hogan with Jefferies. Please proceed with your question.
Speaker Change: Hi, Thanks for taking our questions. So to start maybe you could talk a little bit about the difference in customer between you know reserve resale and subscribers any trends to call out and just how they are each performing thanks.
Speaker Change: Yeah.
Speaker Change: Right.
Speaker Change: [laughter].
Speaker Change:
Speaker Change: So are we.
Our reserve business.
Speaker Change: Certainly provides cause an easy way to.
Speaker Change: And to rent the runway for reserve pricing as low as kind of 10% of the retail price starting at just $30 to run to dress.
Speaker Change: And you can come and have a great experience renting for a part of holiday party, a wedding et cetera, and so we've always seen a diverse customer base across age across geography across income level into the reserve business.
Speaker Change: And prior to 'twenty 'twenty four we have seen that that business had been declining year over year, which was not.
Speaker Change: Great in terms of driving new customer growth and to rent the runway because traditionally reserve has been a driver of new customer growth and so we really put an emphasis on reserve this year to reaccelerate. It we've made some very quick and significant progress given that our reserves.
Speaker Change: Business is up over 20% in Q3, and new customers into that business are up 35% year over year in Q3. So we're showing that we can drive more people into the ecosystem of rent. The runway and then we've set up really great lifecycle marketing communications. Once you have a great experience and rent the runway.
Speaker Change: Obviously to familiarize that customer with the suite of products that we have from resell to subscription and even the launch of this one swap $119 a month subscription plan. This month gives us yet another kind of entree to sell our reserve customers into a more.
Speaker Change: Lightweight subscription program, where you got that one shipment a month, but have access to the full assortment of our inventory so.
Speaker Change: One of the really positive things that we're seeing about subscription is.
Speaker Change: Five six years ago, a subscription to fashion was fundamentally about early adopters people that we're comfortable with what was then a radical new way to get dressed now even a subscription to fashion has become more mainstream and how do we know that we know that because of the diversification of the customers coming into subscription is the first product that they.
Speaker Change: Engage with with rent the runway and we're seeing very high kind of.
Speaker Change: Engagement amongst a much more diverse age demographic into subscription more diverse geographies, where she's coming from and certainly diverse use cases, so we see a lot of it.
Speaker Change: Really nice momentum in our subscription business and feel very confident that with this very simplified focus within the company right now and cross functional alignment around key goals that 2025, it's going to be the year, where we really accelerate our subscriber acquisition and growth.
Speaker Change: Great. Thanks, so much.
Speaker Change: Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to management for any closing comments.
Speaker Change: Thank you for joining us on this Q3 call. We're really excited about our progress this year and we look forward to chatting with you on our Q4 call in April.
Ron: Thanks, Ron.
Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.
Speaker Change: Yeah.