TheRealReal, Inc.REAL

TheRealReal, Inc. Segments Disclosure

10-KFiled Feb 26, 20262 min read
Segment Information
The Company has one reportable segment as its CODM reviews financial information on a consolidated basis. The Company generates revenue from the sale of pre-owned luxury goods through its online marketplace and retail stores. Revenue is comprised of consignment revenue, direct revenue, and shipping services revenue. The Company does not have intra-entity sales or transfers.
The CODM assesses performance and allocates resources based on net loss, as reported on the statements of operations. Net loss is used to monitor budget versus actual results. The CODM does not evaluate operating segments using asset or liability information.

The following table presents selected financial information with respect to the Company's single operating segment (in thousands):
Year Ended December 31,
202520242023
Total revenue$692,845 $600,484 $549,304 
Less:
Cost of consignment revenue56,582 53,801 58,120 
Cost of direct revenue70,682 55,809 74,343 
Cost of shipping services revenue48,759 43,353 40,563 
Total cost of revenue176,023 152,963 173,026 
Gross Profit516,822 447,521 376,278 
Less:
People costs
308,966 283,002 274,229 
Software and purchased services
116,049 108,866 104,454 
Occupancy expense38,661 37,295 37,718 
Depreciation and amortization(1)
32,465 32,764 31,695 
Stock-based compensation28,943 29,082 34,273 
Administration and other segment expenses (2)
13,961 12,811 16,740 
Restructuring and one time expenses (3)
1,711 196 43,462 
Total operating expenses540,756 504,016 542,571 
Change in fair value of warrant liability(35,769)(68,167)— 
Gain on extinguishment of debt40,785 4,177 — 
Interest income4,257 7,943 8,805 
Interest expense(27,701)(21,384)(10,701)
Other income (expense), net926 — — 
Provision for income taxes
(363)(276)(283)
Net loss attributable to common stockholders$(41,799)$(134,202)$(168,472)
(1) Expenses reported in operating expenses, excludes depreciation and amortization recorded in cost of revenue.
(2) Administration and other segment expenses include insurance, supplies, and taxes.
(3) Restructuring and one time expenses for the year ended December 31, 2025 and 2024 consist of employee severance charges. For the year ended December 31, 2023 restructuring and one time expenses consists of impairment of right-of-use assets and property and equipment, employee severance charges, gain on lease terminations, and other charges.

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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