Greetings. Welcome to Rent the Runway Third Quarter 2025 Earnings Call. [Operator Instructions]. Please note that this conference is being recorded. I'll now turn the conference over to Cara Schembri, Chief Administrative Officer and General Counsel. Thank you, Cara. You may now begin.

Hello, everyone, and thanks for joining us today. During this call, we will make references to our Q3 2025 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 guidance and underlying assumptions for the fourth quarter and fiscal year 2025 and statements regarding the recapitalization transactions and our business initiatives. 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 file shortly. We have 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. 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 GAAP. Reconciliations of GAAP to non-GAAP measures can be found in our press release, slide presentation posted on our Investor Relations website and our SEC filings. And with that, I'll turn it over to Jen.

Thanks, Cara, and thank you, everyone, for joining. We've been laser-focused on 2 clear priorities: first, completing the strategic recapitalization of the business to significantly strengthen our balance sheet; second, bringing the business back to growth through a new inventory strategy, increased product innovation and improved connection to our core customer. Now that we are here in Q3, I'm pleased to say we've delivered on both of these goals. We've strengthened our financial foundation by reducing our total debt from approximately $319 million to approximately $120 million and extending the maturity to 2029, giving us years of additional runway. With the recapitalization to highly respected private equity firms with deep experience in the consumer retail space, Nexus and STORY3, alongside our long-term existing lender, contributed new capital to further support the business and its growth initiatives. In addition, they will join us in the boardroom to provide their expertise and support. And importantly, the Rent the Runway business is growing again. We are on track for 11% to 14% year-over-year revenue growth in Q4, up from 1% revenue growth year-over-year in Q4 2024. Q3 fiscal year '25 ending active subscribers grew 12% year-over-year as our base of inventory has grown, and we have enhanced the customer experience. Importantly, despite raising prices in August, we continue to see improvement in both acquisition and retention versus the prior year. We believe that customers are responding positively because the end-to-end experience on our app discovering inventory, personalization and getting the inventory you want is better, and that shows up first in retention as existing customers are the first to notice. Inventory-related cancellations, which are related to availability, selection and quality year-to-date is down over 20% year-over-year and in Q3, it was down nearly 30% versus last year. We track 3 important input metrics…

Thanks, Jen, and thank you, everyone, for joining us. I'd like to discuss 3 topics before turning to business results. Our continued growth momentum, cash consumption this year and our recently closed recapitalization transactions. Let's begin with growth. As evidenced by Q3 results, subscriber growth continued to be strong, with 12.4% growth versus Q3 '24, even with the August 1 price increase. Revenue growth improved considerably from negative 7.2% in Q1 '25 and 2.5% in Q2 '25 to 15.4% in Q3 '25. Subscription growth was the strong driver of total revenue growth in light of weakness in our reserve business. As outlined in our guidance, we expect continued strong revenue growth in Q4. We believe that our investment in inventory this year is driving accelerated growth and improved customer satisfaction. We are growing without spending significantly more year-over-year in paid marketing, which we believe highlights the strength of the retention improvements we have seen. Second, we've been transparent about our fiscal year '25 goals to invest in inventory to improve customer experience and accelerate growth, which is driving increased cash consumption from near breakeven levels in fiscal year 2024. This rental product investment is directly visible in lower gross margins at approximately 29.6% this quarter versus 34.7% during the same quarter last year. As we discussed over the last 2 earnings calls, we have nearly doubled our units of inventory purchase this fiscal year. At this time, we do not expect increases in inventory receipts of this magnitude in fiscal year '26. We have continued to make progress in acquiring inventory on better terms, especially through share by RTR program. We believe our incremental margins are solid even at current levels. Over time, we expect the combination of growth and these inventory cost improvements to deliver improved cash flow generation.…

Thank you. This concludes today's conference. You may now disconnect your lines at this time. We thank you for your participation, and have a wonderful day.