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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

Corporate America's incredibly profitable pandemic

Expand chart
Data: S&P Dow Jones Indices; Chart: Thomas Oide/Axios

Companies are about to blast out a blizzard of quarterly profit and sales numbers over the next few weeks, as the carnival of Q4 corporate results kicks off.

Driving the news: Large banks will open the floodgates, issuing reports early Friday that mark the unofficial start of earnings season on Wall Street.

Updated 8 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds — Omicron pushes COVID deaths toward 2,000 per day — The pandemic-proof health care giant.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Starbucks drops worker vaccine or test requirement after SCOTUS ruling — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies — Federal judge blocks Biden's vaccine mandate for federal workers.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults.
  5. Variant tracker

Arizona governor sues Biden administration over COVID funds tied to mandates

A teacher prepares a hallway barrier to help students maintain social distancing at John B. Wright Elementary School in Tucson, Arizona, on Aug. 14, 2020. Photo: Cheney Orr/Bloomberg via Getty Images

Arizona Gov. Doug Ducey (R) filed a lawsuit Friday against the Biden administration for ordering the state to stop allocating federal COVID relief funds to schools that don't comply with public health recommendations such as masking, the Arizona Republic reports.

Why it matters: The Treasury Department said last week that the state would have to pay back the money if Ducey does not redesignate the $173 million programs to ensure they don't "undermine efforts to stop the spread of COVID-19."