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Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Rent the Runway’s IPO filing on Monday is selling both a story of a post-pandemic rebound that investors can get in on early — and one of eye-popping losses that even greatly massaged non-GAAP metrics can’t hide.

Why it matters: Venture-backed companies have gotten pretty good at going public and selling investors on their ongoing lack of profits. But Rent the Runway is turning up the dial.

Zoom in: Rent the Runway notably adds back the depreciation of its rental apparel into its earnings calculation — a metric that immediately earned it comparisons to WeWork’s infamous “community-adjusted” earnings computation. 

  • Despite the machinations, the company’s adjusted earnings are still negative for both 2020 ($20.3 million) and 2021 so far ($8.1 million).  
  • And while subscribers and revenue, which both drastically shrunk during the pandemic, are coming back, the company still managed to rake in losses larger than its revenue for both 2020 and 2021 so far. 
  • It posted $171.1 million in net loss on $157.5 million in revenue for 2020 and $84.7 million in net losses on $80.2 million in revenue for the first half of this year. To be fair, in 2019, it had $153.9 million in net losses on $256.9 million in revenue. 

The bottom line: Rent the Runway is asking investors to take a huge gamble not only on its ability to get back on track but also on larger trends totally out of its control — namely, that women want to wear fancy clothes again. 

Editor's note: The story has been corrected with the company's adjusted EBITDA loss for 2020 of $20.3 million (not $18 million).

Go deeper

Rent prices increased sharply in September

Source: FRED (Index: 1982-1984=100); Chart: Axios Visuals

A new red flag showed up in Wednesday’s Consumer Price Index: The amount that Americans pay for shelter rose sharply in September.

Why it matters: Rent is a big-ticket item — it’s the single largest monthly expense for many people. And when rent rises, it tends to be somewhat sticky.

Ben Geman, author of Generate
8 hours ago - Energy & Environment

Key clean power provision likely won't survive in Dems' spending bill

A construction worker walks along a dirt road at the Avangrid Renewables La Joya wind farm in Encino, New Mexico, on Aug. 5, 2020. Photo: Cate Dingley/Bloomberg via Getty Images

A pillar of Democrats' plans to speed deployment of zero-carbon electricity is likely to be cut from major spending and tax legislation they are struggling to move on a party-line vote, per multiple reports and a Capitol Hill aide.

Driving the news: The New York Times, citing anonymous congressional aides and lobbyists, reports that West Virginia Sen. Joe Manchin (D) has told the White House he "strongly opposes" the Clean Electricity Performance Program.

Updated 10 hours ago - World

Fatal stabbing of British MP David Amess declared a terrorist incident

Police outside Belfairs Methodist Church in Leigh-on-Sea, England, on Oct. 15. Photo: John Keeble/Getty Images

Authorities have declared the death of David Amess a terrorist incident, hours after the Conservative Party lawmaker in the U.K. was fatally stabbed while meeting with local constituents in a church in eastern England on Friday.

The big picture: The Metropolitan Police has found "a potential motivation linked to Islamist extremism."