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REAL's Raised 2026 Outlook Puts Automation and Margin Gains in Focus
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Key Takeaways
REAL raises its 2026 outlook, projecting GMV of $2.535B-$2.565B and adjusted EBITDA of $66M-$69M.
REAL's Q2 GMV surged 22% to a record $617M, while adjusted EBITDA margin expanded 290 basis points to 7%.
REAL's Athena AI platform targets nearly 50% automated item processing by year-end to help cut costs.
The RealReal, Inc. (REAL - Free Report) raised its 2026 outlook after a second quarter marked by record marketplace volume and wider adjusted EBITDA margins. The update puts greater emphasis on whether automation can keep lowering processing costs as transaction activity scales.
Full-year gross merchandise value is now expected between $2.535 billion and $2.565 billion, with revenues of $788-$797 million and adjusted EBITDA of $66-$69 million. At the midpoint, the adjusted EBITDA margin is about 8.5%, roughly 240 basis points above 2025.
Second-quarter GMV reached a record $617 million, up 22% year over year, while revenues increased 17% to $193 million. Orders rose 8% and average order value climbed 13% to $659. Trailing 12-month active buyers increased 11% to more than 1.1 million, showing that customer activity and spending both supported growth.
Image Source: Zacks Investment Research
The shift toward premium merchandise is helping unit economics but creating a trade-off in revenue conversion. Sales of items priced above $1,000 increased 36% in the first half of 2026. Those transactions carry lower percentage take rates, contributing to a 200-basis-point decline in the second-quarter take rate to 35.9%. Consignment revenues consequently grew 15%, slower than GMV.
Automation is becoming more important to the margin story. Athena, REAL’s Artificial Intelligence-enabled intake platform, remains on track to process nearly 50% of items fully through the system by year-end. The company is also moving higher-value goods through workflows that previously required more manual handling.
Management expects these technology investments to remove multiple dollars per unit from processing costs, improve speed to sell and support growth with minimal incremental headcount. Total operating expenses leveraged about 470 basis points year over year in the second quarter, while adjusted EBITDA margin expanded 290 basis points to 7%.
Cash conversion is another area to watch. Operating cash flow turned positive at $2 million in the second quarter, improving $5 million year over year, while free cash flow improved by $9 million. REAL expects positive free cash flow in both the third and fourth quarters. Its automated storage and retrieval system is scheduled to go live in the fourth quarter and expand capacity at the Perth Amboy authentication center by 35%.
The resale market also includes ThredUp Inc. (TDUP - Free Report) , an online secondhand apparel marketplace that has been expanding active buyers and adjusted EBITDA margins. eBay Inc. (EBAY - Free Report) is another relevant recommerce platform, and its July 2026 acquisition of Depop increased its exposure to fashion resale. Both compete for buyers, sellers and efficient marketplace infrastructure.
Risks remain. Marketing expense increased about 18% year over year to $18.4 million in the second quarter, and management expects a similar level of investment in the third quarter. REAL also carried $231.5 million of convertible senior notes and $144.3 million of non-convertible notes as of June 30, 2026, compared with $119.1 million of cash and cash equivalents.
Its Growth Score of A and VGM Score of B are favorable complements to that rank, while the Value Score of D and Momentum Score of C present a more mixed picture.
The raised outlook suggests that operating leverage and automation are becoming increasingly important to REAL’s earnings progression. Still, the durability of margin gains will depend on maintaining transaction growth while managing take-rate pressure, marketing spending and balance-sheet costs. The current Zacks Rank and Style Scores point to favorable growth characteristics, but they do not remove those execution risks.
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REAL's Raised 2026 Outlook Puts Automation and Margin Gains in Focus
Key Takeaways
The RealReal, Inc. (REAL - Free Report) raised its 2026 outlook after a second quarter marked by record marketplace volume and wider adjusted EBITDA margins. The update puts greater emphasis on whether automation can keep lowering processing costs as transaction activity scales.
Full-year gross merchandise value is now expected between $2.535 billion and $2.565 billion, with revenues of $788-$797 million and adjusted EBITDA of $66-$69 million. At the midpoint, the adjusted EBITDA margin is about 8.5%, roughly 240 basis points above 2025.
Second-quarter GMV reached a record $617 million, up 22% year over year, while revenues increased 17% to $193 million. Orders rose 8% and average order value climbed 13% to $659. Trailing 12-month active buyers increased 11% to more than 1.1 million, showing that customer activity and spending both supported growth.
Image Source: Zacks Investment Research
The shift toward premium merchandise is helping unit economics but creating a trade-off in revenue conversion. Sales of items priced above $1,000 increased 36% in the first half of 2026. Those transactions carry lower percentage take rates, contributing to a 200-basis-point decline in the second-quarter take rate to 35.9%. Consignment revenues consequently grew 15%, slower than GMV.
Automation is becoming more important to the margin story. Athena, REAL’s Artificial Intelligence-enabled intake platform, remains on track to process nearly 50% of items fully through the system by year-end. The company is also moving higher-value goods through workflows that previously required more manual handling.
Management expects these technology investments to remove multiple dollars per unit from processing costs, improve speed to sell and support growth with minimal incremental headcount. Total operating expenses leveraged about 470 basis points year over year in the second quarter, while adjusted EBITDA margin expanded 290 basis points to 7%.
The RealReal, Inc. Price and Consensus
The RealReal, Inc. price-consensus-chart | The RealReal, Inc. Quote
Cash conversion is another area to watch. Operating cash flow turned positive at $2 million in the second quarter, improving $5 million year over year, while free cash flow improved by $9 million. REAL expects positive free cash flow in both the third and fourth quarters. Its automated storage and retrieval system is scheduled to go live in the fourth quarter and expand capacity at the Perth Amboy authentication center by 35%.
The resale market also includes ThredUp Inc. (TDUP - Free Report) , an online secondhand apparel marketplace that has been expanding active buyers and adjusted EBITDA margins. eBay Inc. (EBAY - Free Report) is another relevant recommerce platform, and its July 2026 acquisition of Depop increased its exposure to fashion resale. Both compete for buyers, sellers and efficient marketplace infrastructure.
Risks remain. Marketing expense increased about 18% year over year to $18.4 million in the second quarter, and management expects a similar level of investment in the third quarter. REAL also carried $231.5 million of convertible senior notes and $144.3 million of non-convertible notes as of June 30, 2026, compared with $119.1 million of cash and cash equivalents.
REAL currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its Growth Score of A and VGM Score of B are favorable complements to that rank, while the Value Score of D and Momentum Score of C present a more mixed picture.
The raised outlook suggests that operating leverage and automation are becoming increasingly important to REAL’s earnings progression. Still, the durability of margin gains will depend on maintaining transaction growth while managing take-rate pressure, marketing spending and balance-sheet costs. The current Zacks Rank and Style Scores point to favorable growth characteristics, but they do not remove those execution risks.