Investor Presentation

November 2020

Safe Harbor

This presentation contains forward-looking statements relating to, among other things, the future performance of The RealReal that are based on the company's current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," anticipate," "believe," "estimate," "predict," "intend," "potential," "continue," "ongoing" or the negative of these terms or other comparable terminology. These statements include, but are not limited to, statements about future operating results, including the amounts of our operating expense and capital expenditure investments or reductions and our strategies, plans, commitments, objectives and goals, in particular in the context of the impacts of the COVID-19 pandemic and the recent social unrest. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to, the impact of the COVID-19 pandemic and the social unrest on our operations and business environment, any failure to generate a supply of consigned goods, pricing pressure on the consignment market resulting from discounting in the market for new goods, failure to efficiently and effectively operate our merchandising and fulfillment operations and other reasons.

More information about factors that could affect the company's operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company's Investor Relations website at https://investor.therealreal.com or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the company on the date hereof. The company assumes no obligation to update such statements.

In addition to financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this presentation includes non-GAAP financial measures adjusted EBITDA, Contribution Margin and Contribution Profit. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of other GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures are included at the end of this presentation.

This presentation and the accompanying oral presentation also contain statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified the accuracy or completeness of the information contained in the industry publications and other publicly available information. Accordingly, we make no representations as to the accuracy or completeness of that information nor do we undertake to update such information after the date of this presentation.

1

Q3 Highlights

GMV Trends Improved Significantly Q/Q; COVID-19 Headwinds Remain

  • GMV of $245.4 million improved 17% Q/Q and declined 3% Y/Y
  • The RealReal B2B vendor program GMV increased 65% Y/Y
  • 82.9% of GMV from repeat buyers
  • Revenue of $78.1 million improved 16% Q/Q and declined 4% Y/Y
  • Direct revenue increased 11% Y/Y to $13.6 million
  • Gross Profit of $49.8 million improved 18% Q/Q and declined 5% Y/Y
  • Well capitalized with $395.2 million in cash, short term investments and cash equivalents
  • Gucci partnership demonstrates leadership in the luxury resale market; opened Chicago store

3

GMV Recovery Continues

Improving Business Trends Led to Reinvestment in Growth

Q3 TRENDS

Supply Units

Supply Processing Capacity

Demand

  • Improved 32% Q/Q and increased 3% Y/Y in Q3; Expect supply units shipped to approach double digit growth in Q4
  • NYC recovering - improved 51% Q/Q and increased 2% Y/Y in Q3
  • Excluding NYC and LA - improved 27% Q/Q and increased 7% Y/Y in Q3
  • Operating capacity was not a constraint to growth in Q3
  • Supply processing also benefitting from automation investments
  • Strong sell-through throughout COVID
  • Increased marketing spend to above pre-COVID levels to support increasing momentum
  • Traffic trends remain healthy; sessions +18% Y/Y in Q3

GMV (Y/Y Change %)

~30%

17%

(8%)

(8%)

(2%)

(6%)

(1%)

(5%)

(16%)

(21%)

(22%)

(44%)

(44%)

Jan - Feb

Mar 2020

Mar 2020

Apr 2020

Apr 2020

May 2020

May 2020

Jun 2020

Jun 2020 July 2020

Aug 2020 Sept 2020

Oct 2020

2020

1H

2H

1H

2H

1H

2H

1H

2H

4

Positioned to Rebound Strongly

LARGEST ONLINE MARKETPLACE FOR AUTHENTICATED, CONSIGNED LUXURY GOODS

Founder-led business with nearly a decade focused on authenticated luxury goods

100% authenticated marketplace

ESG dedicated

Virtual appointments recently added

Efficient operations supported by automation

Omnichannel supply activation

Brand partnerships

ENTERED 2020 WITH STRONG MOMENTUM

  • Significant scale - over $1bn in GMV in 2019
  • Strong repeat customer base - over 80% of GMV from repeat buyers/consignors in 2019
  • 1Q 2020, GMV growth ~30% Y/Y pre-COVID
  • Growing luxury, and resale, TAM
  • Strong unit economics and operating leverage

COVID-19 RESULTED IN

SHORT-TERM DISRUPTION, BUT LONG-TERM

OPPORTUNITY MAY INCREASE

Implemented expense and capex

reductions across the business during peak disruption; reinvestment began in May

Introduced virtual appointments, appointment scheduling and curbside pick-ups

Decline of traditional retail and growth of e-commerce reshaping competitive landscape

Greater consumer awareness

of sustainability

5

Q3 TTM Active Buyer Growth +14% Y/Y

(in thousands)

582

602

612

617

543

492

455

416

352

379

326

48%

50%

45%

43%

43%

40%

40%

40%

32%

24%

14%

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

Active Buyers

Y/Y Growth

TTM Active buyer growth increased 14% Y/Y; Added 5.5K active buyers in Q3

6

Q3 GMV Improved +17% Q/Q, -3% Y/Y

($MM)

$303

$253

$258

245

$229

$218

$224

$171

48%

$183

$158

$163

43%

42%

40%

39%

48%

46%

42%

15%

-3%

-20%

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

GMV

Y/Y Growth

GMV improved significantly Q/Q despite an 800bps more difficult Y/Y comparison as we lapped our IPO

7

Q3 Take Rate Decreased 140bps Y/Y Due to Mix of Higher ASP Products

($ in millions)

Declined

$252

$245

36.8%

(3%)

35.4%

$82

$78

(4%)

3Q19

3Q20

Total Revenue

GMV

Take Rate

8

AOV Increased 2% Y/Y; Orders Declined 5% Y/Y

Average order value (AOV)

Number of orders

Increased

(in thousands)

Declined

577

2%

5%

550

$446

$438

3Q19

3Q20

3Q19

3Q20

The primary driver of the higher AOV was a 9% Y/Y increase in average selling price (ASP), which offset a Y/Y decline in units per transaction (UPT). UPT improved modestly Q/Q with gradual improvements in each month of the quarter.

9

Top Line Leverage

$438$446

Leverage drivers

36.8%

35.4%

$91(1)

$91 (1)

3Q19

3Q20

3Q19

3Q20

AOV

Take Rate

AOV increased 2% Y/Y; AOV

Down 140bps Y/Y; decrease

increased due to a 9%

driven by higher mix of lower

increase in ASP. UPT

take rate categories such as

improved each month in Q3.

handbags and jewelry

  1. Calculated by dividing Gross Profit by the number of orders for the applicable quarter..

3Q193Q20

Gross Profit

Per Order

Flat Y/Y; shipping leverage was offset by higher direct revenue mix and deleverage of fixed cost of sales.

10

Operating Leverage

Operating Expenses (% of Revenue) Negatively Impacted by COVID-19 Revenue Headwinds

52.0%

45.3%45.9%

34.9%

16.4%19.5%

3Q19

3Q20

3Q19

3Q20

3Q19

3Q20

Marketing

SG&A

Ops & Tech

Deleverage driven by the

Deleverage driven by the

Deleverage driven by the

revenue decline and

revenue decline, COVID

revenue decline and higher

advertising investments.

expenses, public company

compensation related

costs and sales deleverage

expenses, including SBC, and

due to lower supply volumes(1).

higher occupancy expenses.

  1. SG&A expense included approximately $2.2mn of COVID-related expenses and $1.0mn of Sarbanes-Oxley related expenses.

11

4Q Outlook

  • Withdrew our 2020 outlook on March 17th
  • Not providing a 4Q outlook at this time given limited near-term visibility

12

Investment Highlights

Largest Online

Large and

Superior

Marketplace for

Attractive TAM,

Marketplace Due

Powerful

Authenticated,

Supported by

to Service, Trust,

Financial

Consigned

Sustainability and

Technology

Model

Luxury Goods

ESG focus

and Data

13

Largest Online Marketplace for Authenticated, Consigned Luxury Goods with Powerful Flywheel Driving Growth

2019 GMV

2019 Total Revenue

of consignors

of buyers are

are buyers(1)

consignors(1)

TTM Active Buyers(1)

2019 AOV

WOMEN

MEN

JEWELRY

WATCHES

HOME & ART

KIDS

of GMV from

of GMV from

repeat consignors (1)

repeat buyers (1)

Note: Average Order Value (AOV).

(1) As of September 30, 2020.

14

TAM is Large and Propelled by Strong Luxury Tailwinds

LUXURY RETAIL IS

SHIFTING ONLINE(2)

~29%

US luxury goods available for resale(1)

Average time

12%

consumers

10%

keep luxury products(1)

5%

Annual new supply

of US luxury goods

for resale(1)

2018

2019E

2025E

2014

YOUNGER GENERATIONS

SHIFTS IN

ARE DRIVING GROWTH (2)

CONSUMER MINDSET

Gen Y & Gen Z All other

~45%

Edward Enninful,

Editor-in-chief of British Vogue

61%

Focus on maximizing value

for money with high quality

products with utility

~55%

39%

Move away from trend-right

fast fashions that have

a short shelf-life

2019E

2025E

(1) Frost & Sullivan Total Addressable Market assessment for the Luxury Resale Market.

(2) Bain-Altagamma Luxury Goods Worldwide Market Study, May 2020.

15

We Offer a Superior Marketplace for Consignors and Buyers

Consignor

Buyer

END-TO-END SERVICE

TRUST

Rapid sales velocity

Curated, exclusive selection

Optimal pricing

Value

High commissions

Luxury service

16

Our NPS Compares Favorably with Best-in-Class Consumer Companies

Industry Averages

Best-in-Class

76

71

70

62

55

59

40

43

TRR Buyers

TRR Consignors

Department /

Online shopping

costco

ritz carlton

apple

Airbnb

Buyers

Consignors

Department/

Online

specialty stores

Specialty

Shopping

Stores

  1. Reflects TRR 2019 NPS scores and NICE Satmetrix U.S. Consumer 2020 data.

17

Supply Drives the Business and Essentially Everything Sells

93%

96%

94%

TOTAL SELL

TOTAL SELL

TOTAL SELL

THROUGH %(1)

THROUGH %(1)

THROUGH %(1)

78%(2)

78%(2)

77%(2)

60%(2)

59%(2)

58% (2)

2017

2018

2019

< 30 days

30-90 days

  1. Represents ratio of GMV to initial supply value for the specified year.

(2)

Represents unit sell through rate for the specified period.

18

End-to-end Service Model Activates Supply

WHITE GLOVE

VIRTUAL

IN-HOME

LUXURY CONSIGMENT

IN-STORE

DIRECT SHIPPING

CONSULTATION

CONSULTATION*

OFFICE

Complimentary

virtual appointments

Luxury managers(2)

Luxury

Retail stores in

shipping directly to

our merchandising

via email, phone and

consignment

NYC (SoHo and

and fulfillment

video, achieving

offices(1)

Madison Ave), LA, San

equivalent unit

Francisco and

facilities

volume to in-home(1)

Markets(2)

Chicago(3)

CURBSIDE PICK-UP

CURBSIDE DROP-OFF

CURBSIDE DROP-OFF

FREE SHIPPING LABEL

* In-person white glove consignment appointments were temporarily suspended and augmented with virtual appointments but remain an option for our consignor base.

  1. For the quarter ending September 30, 2020.
  2. As of December 31, 2019.
  3. As of October 23, 2020

The REALREAL B2B VENDOR PROGRAM

Vendor GMV

Growth(1)

19

Trust: We Authenticate Every Item on Our Marketplace

150+

Highly trained brand

authenticators,

gemologists, horologists

and art curators (1)

Note: As of December 31, 2019.

20

Our Single-SKU Inventory Management is Both Unique and Very Complex

Buyers Become Consignors

SUPPLY SIDE

CONSIGNORS

WHITE GLOVE SERVICES

Direct Ship

B2B Vendors

FACILITIES

DEMAND SIDE

Pick, Pack & Ship

Virtual Consultations

Online Purchases

Pick, Pack & Ship

highly trained brand

In-home

authenticators, gemologists,

In-store Purchases

Transfer for

horologists and art curators(1)

LCO

LCOs

Authentication

Transfer for

BUYERS

In-store

Stores

Authentication

Store Merchandising

In-store & Online Order Fulfillment

Consignors Become Buyers

Note: Luxury Consignment Office (LCO).

  1. As of December 31, 2019.

21

Why The RealReal's Model, Data & Technology Wins

TRR SITS AT THE CENTER OF THE

CIRCULAR ECONOMY

of global luxury goods market

of luxury customers prefer

represented by Generations Y

brands that are socially

and Z by 2025(1)

responsible(2)

metric tons of

Carbon neutral

by

carbon saved

since inception(7)

of TRR consignors cite

environmental impact or extending

the lifecycle of luxury as key

motivators for consigning(3)

of buyers said that they

of personal luxury goods

purchase more expensive

market represented by the

luxury items than they would

online channel by 2025(1)

have bought without a resale

market(4)

COVETED DEMOGRAPHIC

HENRYs are the new luxury buyers(5)

US HENRY households

US ultra-affluent households

of TRR consignors

of TRR buyers

have annual income of

have annual income of

>$100,000(6)

>$100,000(6)

of TRR consignors are

of TRR buyers are

under 45 years old(6)

under 45 years old(6)

SCALED MARKETPLACE

End-to-End Service

Rapid sales velocity

Optimal pricing

High commissions

item sales

Trust

since inception

Value

Luxury service

Curated, exclusive selection

DATA & PERSONALIZATION

DRIVE SATISFACTION

Hermès

Togo Birkin 35

$7,700.00

Color: Gold

Size: 45cm

Material: Togo

Hardware: Gold

Lock/Key: Included

Box: Included

Handle Drop: 5.5"

Height: 10.5"

Width: 14"

Depth: 7.5"

Hermes

Togo Birkin 35

$7,700.00

(1)

Bain Altagamma Luxury Goods Worldwide Market Study, May 2020.

(5)

Millennial HENRYs (High Earner Not Rich Yet) occupy the space between the middle-income

(2)

Bain Altagamma Worldwide Luxury Market Monitor, November 2019.

consumers ($50,000-$99,000) and the ultra-affluent elites (+$250,000), Forbes, May 2020.

(3)

According to The RealReal customer survey results as of March 31, 2020.

22

(6)

As of December 31, 2019.

(4)

BCG Why Luxury Brands Should Celebrate the Preowned Boom.

(7)

As of September 30, 2020

Long Term Financial Profile

  1. Strong & sustainable growth
  2. Significant operating leverage
  3. Substantial liquidity

23

Strong Revenue Growth Driven By GMV Growth and Take Rate

($ in millions)

$1,008

$711

$492

36.3%

35.5%

33.7%

$318

$138

$214

2017

2018

2019

Total revenue

GMV

Take Rate

2019 GROWTH

42%

49%

24

GMV Growth Driven By Order Growth and Higher AOV

Average order value (AOV)Number of orders

2019 Growth

(Thousands)

2019 Growth

2%

$455

39%

2,218

$446

$438

1,595

1,123

2017

2018

2019

2017

2018

2019

25

Top Line Leverage

Leverage drivers

$438$446

$455

36.3%

35.5%

33.7%

$92(1)

(1)

$86

$78 (1)

201720182019

AOV

Driven by higher average

price of items sold and

greater number of items per

order

201720182019

Take Rate

Up 80bps Y/Y in 2019 Driven

by Take Rate changes

2017

2018

2019

Gross Profit

Per Order

Up 7% Y/Y in 2019;

Increases due to

improvements in Take Rate, AOV, and shipping leverage

  1. Calculated by dividing Gross Profit by the number of orders for the applicable quarter.

26

Operating Leverage

Operating Expenses (% of Revenue)

49.1%

42.7%

45.0%

32.0%

34.8%

33.7% (1)

26.7%

29.8%

19.7%

15.0%

2017

2018

2019

2017

2018

2019

2019 Adj.

2017

2018

2019

Marketing

SG&A

Ops & Tech

'19 leverage driven by

'19 deleverage driven by

'19 leverage driven by

healthy retention trends and

investments in public company

automation, improved

a ~20% Y/Y decline in BAC;

costs, headcount and a $3.2

outbound efficiencies and fixed

~500bps Y/Y leverage in

million donation to establish the

expense leverage; ~400bps

2019

TRR Foundation

Y/Y leverage in 2019

Note:

Buyer Acquisition Cost or BAC for a given period is comprised of our total advertising spend divided by the number of buyers acquired in that period.

(1)

Excluding the $3.2 million donation to establish The RealReal Foundation and $0.3 million in abandoned offering costs, SG&A as a percent of revenue was 33.7% in 2019

27

Capital Efficient Marketplace Model

GMV, Total Revenue and Inventory

($ in millions)

$1,008

$711

$492

$318

$214

$138

$7

$10

$24

2017

2018

2019

GMV

Total Revenue

Inventory

28

Driving Toward Profitability

Gross Profit per Order

$86$92

Drivers of operating leverage

20182019

Contribution margin(1)

13.8%

6.7%

20182019

Adjusted EBITDA (% of Revenue)(2)

(27.6%)

(23.0%)

(32.2%)

2017

2018

2019

Revenue

Drivers

Gross Margin

Drivers

Variable

Expense

Leverage

Fixed Expense

Leverage

Strong Retention

Consignment

AOV

Take Rate

Shipping

Consignment

Direct Sales Mix

Expense

Take Rate

Marketing

Ops & Tech

SG&A

Improving BAC

Process automation

Sales team productivity

Ops & Tech

SG&A

Marketing

Rent and headcount

Headcount and public

Headcount

company expenses

Note: The figures above are non-GAAP financial measures. Please see the reconciliation from GAAP to Non-GAAP measures contained in the appendix to this presentation.

  1. Contribution margin is a non-GAAP financial measure that is calculated as gross profit per order minus variable expenses including variable marketing, operations, sales and merchandising expenses as a percentage of sales.
  2. Adjusted EBITDA means net loss before net interest expense, income tax provision and depreciation and amortization, further adjusted to exclude stock-based compensation and certain one-time expenses.

29

Strong Contribution Profit per Order Supports Path to Profitability

2018

2019

Y/Y Change

$446

$455

2%

AOV

$130

$143

10%

Revenue per Order

Take Rate

35.5%

36.3%

80bps

$86

$92

7%

Gross Profit per Order

$77

$72

(7%)

Variable Cost per Order

Contribution Profit per Order (1)

$9

$20

126%

$46

$53

15%

Fixed Cost per Order

Adjusted EBITDA per Order (2)

($37)

($33)

11%

Note: The figures above are non-GAAP financial measures. Please see the reconciliation from GAAP to Non-GAAP measures.

  1. Contribution Profit is a non-GAAP financial measure that is calculated as gross profit per order minus variable expenses including variable marketing, operations, sales and merchandising expenses.
  2. Adjusted EBITDA means net loss before net interest expense, income tax provision and depreciation and amortization, further adjusted to exclude stock-based compensation and certain one-time expenses.

30

Consistent Retention Across Buyer Cohorts

Annual GMV by Buyer Cohort Year

($ in millions)

2014

2015

2016

2017

2018

2019

2014

2015

2016

2017

2018

2019

Note: Each cohort represents all buyers that first purchased across our online marketplace in the designated year and the aggregate GMV purchased by such cohort for the initial year and each year thereafter.

31

2019 Buyer LTV : BAC Payback Less Than 3 Months With Flywheel Enhancing The Network Effect of Our Marketplace

Buyer LTV : BAC - All Buyers1

BLTV : BAC - Buyers who are also consignors1

2015

2016

2017

2018

2019

2015

2016

2017

2018

2019

12.00x

12.00x

10.00x

10.00x

8.00x

8.00x

6.00x

6.00x

4.00x

4.00x

2.00x

2.00x

0.00x

0.00x

3 Mo

6 Mo

12 Mo

24 Mo 36 Mo

3 Mo

6 Mo

12 Mo

24 Mo

36 Mo

2019 BAC payback in less than 3 months

Further acceleration of BAC payback

Months

Months

3 Mo

6 Mo

12 Mo

24 Mo

36 Mo

3 Mo

6 Mo

12 Mo

24 Mo

36 Mo

2015

0.73x

0.99x

1.48x

2.44x

3.48x

2015

1.34x

2.13x

3.68x

7.02x

10.77x

2016

0.67x

0.89x

1.29x

2.14x

3.14x

2016

1.21x

1.95x

3.38x

6.60x

10.61x

2017

0.71x

0.93x

1.34x

2.22x

2017

1.29x

2.00x

3.51x

6.86x

2018

0.88x

1.12x

1.59x

2018

1.67x

2.54x

4.29x

2019

1.12x

1.42x

2019

1.70x

2.58x

Note:

BLTV refers to cumulative gross profit attributable to purchases by buyers in a given period. BAC for a given period is comprised of our total advertising spend divided by the number of buyers acquired in that period.

BLTV in the graph on the right includes only gross profit attributable to transactions in which the members participated as buyers and does not include gross profit attributable to transactions in which the member

participated as a consignor

32

(1)

As of December 31, 2019.

Our Model is Inherently Sustainable

Millions of liters of water saved since inception (1)

Metric tons of carbon saved since inception (1)

755

698

16,100

15,040

660

14,300

608

13,300

4Q19

1Q20

2Q20

3Q20

4Q19

1Q20

2Q20

3Q20

(1) Seehttps://www.therealreal.com/sustainabilityfor methodology.

33

ESG - What We Are Doing in 2020

  • We launched a comprehensive initiative to enhance transparency of ESG policies, reporting, and board oversight along SASB recommended metrics
  • We reviewed and updated key ESG policies and disclosures, including:
    • Environmental Management System (EMS)
    • Human Rights Policy
    • Climate Change Policy
    • Diversity and Inclusion Policy
    • Environmental Policy
    • Energy, Water and Waste Policy
    • GHG Emissions
    • Occupational Health and Safety
    • Top Suppliers and Service Providers
    • Supplier Responsibility Program including Supplier Code of Conduct, Supplier Management Program and Supplier Diversity Program
    • Key ESG performance metrics

34

Building a Strong ESG Foundation

    • Sustainability is a core value
      • Saving water and carbon emissions
      • Pioneering the circular economy
      • Extending the lifecycle of luxury products
    • Social
      • Diversity and inclusion
      • Employee safety
      • Human capital management
      • Data privacy
    • Governance
      • Board and Committee oversight of Diversity and Inclusion
      • Board and Committee oversight of ESG
      • Ethics
  1. According to The RealReal customer survey results as of March 31, 2020
  2. As of September 30, 2020

(3)

Bain Altagamma Luxury Goods Worldwide Market Study, May 2020.

35

(4)

Bain Altagamma Worldwide Luxury Market Monitor, November 2019.

TRR SITS AT THE CENTER OF THE

CIRCULAR ECONOMY

of TRR buyers say they shop

of TRR consignors cite environmental

The RealReal as a

impact or extending the lifecycle of

replacement for fast fashion(1)

luxury as key motivators for

consigning(1)

Carbon neutral

metric tons ofby carbon saved

since inception(2)

million liters of water

saved since inception(2)

of luxury customers prefer

of global luxury goods market

brands that are socially

represented by Generations Y

responsible(4)

and Z by 2025(3)

Alignment and Engagement with ESG Ratings Agencies

ISS

    • Environment Score: 4
    • Social Score: 2
    • Continue to work closely with ISS to improve overall scores. ISS score does not currently reflect CDP submission or Supplier Responsibility Program(1)
  • MSCI
    • Overall rating: A
    • Above industry average; anticipating updated scores to reflect all ESG work in early 2021 (2)
  • Sustainalytics
    • Overall rating: 22.7 (Medium Risk)
    • In line with industry average; anticipating updated scores to reflect all ESG work in Q4 2020 (3)

CDP

    • Submitted inaugural CDP Climate Change survey response in August 2020
  • SASB
    • Currently aligning all ESG disclosures with SASB accounting metrics
  1. ISS data as of Sept 30, 2020
  2. MSCI data as of January 2020

(3)

Sustainalytics data as of December 2019

36

ESG Highlights

Environment

Society

Governance

  • Our busines model drives significant water and carbon emission savings
  • Carbon reduction goal targets carbon neutrality in 2021
  • Reduce greenhouse gas (GHG) emissions by 30% by 2030; achieve net-zero emissions by 2050
  • Circular economy advocacy and thought leadership
  • Partnerships with Gucci, Burberry and Stella McCartney promote the recirculation of their products on TRR
  • Increase the usage of virtual appointments
  • Sustainability calculator embedded in our buyer and consignor experience
  • Sustainability Task Force works cross-functionally to identify projects that can drive sustainable outcomes
  • Environmental Management System (EMS)
  • UN Global Compact Signatory
  • UN Climate Change's Fashion Industry Charter
  • The Ellen MacArthur Foundation Member
  • Sustainable Apparel Coalition
  • 68% of employees are female (1)
  • 60% of employees identify as racially or ethnically diverse (1)
  • Implementing a company wide diversity & inclusion plan
  • 98.3% of employees received an annual performance review; our people managers have quarterly meetings with their employees to address performance and development(1)
  • Employee safety is our top priority and we have implemented numerous new safety measures to protect our employees during the pandemic
  • Committed to high standards for our working environments that protect the well-being of all employees
  • Data protection policy governs business
  • All employees are eligible to participate in ESPP Plan; all full-time employees receive awards through our Equity Incentive Plan.
  • UN Global Compact Signatory
  • 50%+ of our Board of Directors were female (2)
  • Majority independent Board of Directors
  • Fully independent Audit and Compensation and Nominating and Governance Committees
  • Classified Board Structure - promotes continuity of leadership, Board stability and long-term planning
  • Quarterly reporting to the Governance committee
  • Board of oversight of risk management and ESG integration
  • Annual Director and Committee evaluations
  • Anti-hedgingand anti-pledging requirements
  • Single-classcapital structure: one share, one vote

(1)

As of December 31, 2019

37

(2)

As of October 28, 2020

Innovative and Experienced Team

Julie Wainwright

Matt Gustke

Rati Sahi Levesque

Kayti Sullivan

Fredrik Björk

Founder, President

Chief Financial Officer

Chief Operating Officer

Chief Revenue Officer

Chief Technology Officer

and Chief Executive

Officer

Zaina Orbai

Josh Mahoney

Todd Suko

Paul Bieber

Chief People Officer

Chief Product Officer

Chief Legal Officer

Head of Investor

SVP, Product

Relations

Management

38

55%

of consignors are buyers(1)

13%

of buyers are consignors(1)

  1. As of September 30, 2020.

39

Appendix

Reconciliation to Adjusted EBITDA

($ in millions)

FYE December 31

2017

2018

2019

Total Revenue

$137.5

$213.7

$318.0

Net loss

($52.3)

($75.8)

($96.6)

Depreciation and amortization

5.6

9.3

13.4

Stock-based compensation expense

1.9

2.9

7.7

Compensation expense related to stock sales by current and former employees

-

0.8

0.8

Abandoned Offering Costs

-

-

0.3

Donation to TRR Foundation

-

-

3.2

Vendor service settlement

-

2.0

-

Interest income

(0.4)

(1.0)

(4.6)

Interest expense

0.8

1.2

0.6

Other expense, net

0.1

1.7

2.1

Provision for income taxes

0.1

0.1

0.1

Adjusted EBITDA

($44.3)

($58.9)

($73.0)

Adjusted EBITDA (% of Revenue)

-32.2%

-27.6%

-23.0%

41

Reconciliation to Adjusted EBITDA

($ in millions)

FYE December 31

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

Total Revenue

$70.6

$72.2

$81.5

$93.7

$78.2

$57.4

$78.1

Net loss

($23.2)

($26.6)

($25.3)

($21.3)

($38.3)

($42.9)

($43.3)

Depreciation and amortization

2.8

3.2

3.5

3.9

4.1

4.6

4.9

Stock-based compensation expense

1.1

1.3

2.5

2.8

3.4

6.1

7.4

Compensation expense related to stock sales by current and former employees

0.8

-

-

-

-

-

-

Legal Settlement

-

-

-

-

1.1

-

-

Abandoned Offering Costs

-

-

-

0.3

-

-

-

Restructuring

0.4

0.1

Donation to TRR Foundation

-

-

-

3.2

-

-

-

Vendor service settlement

-

-

-

-

-

-

-

Interest income

(0.4)

(0.6)

(1.9)

(1.7)

(1.3)

(0.6)

(0.4)

Interest expense

0.1

0.1

0.1

0.0

0.0

0.4

2.4

Other expense, net

0.3

1.7

0.1

(0.0)

(0.0)

0.1

Provision for income taxes

-

0.1

0.0

0.0

0.0

0.1

(0.0)

Adjusted EBITDA

($18.5)

($20.9)

($20.9)

($12.7)

($30.9)

($31.8)

($29.0)

Adjusted EBITDA (% of Revenue)

-26.2%

-28.9%

-25.7%

-13.6%

-39.5%

-55.4%

-37.2%

42

Reconciliation to Contribution Margin

($ per order)

FYE December 31

2018

2019

AOV

$445.6

$454.7

Revenue

130.0

143.4

Gross profit

85.8

91.6

Variable expenses

77.1

71.9

Contribution profit

$8.7

$19.7

Contribution margin

6.7%

13.7%

43

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The RealReal Inc. published this content on 07 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 November 2020 22:06:14 UTC