BARK Reports Third Quarter Fiscal Year 2025 Results

Published: 2025-02-05 16:08:03 ET BARK

BARK, Inc. (NYSE: BARK) (“BARK” or the “Company”), a leading global omnichannel dog brand with a mission to make all dogs happy, today announced its financial results for the fiscal third quarter ended December 31, 2024.

Key Highlights

"We closed 2024 on a high note, exceeding our revenue expectations and delivering our tenth consecutive year-over-year improvement in Adjusted EBITDA," said Matt Meeker, Co-Founder and Chief Executive Officer. "Our focus on building and empowering a world-class leadership team is starting to deliver results, with momentum building across the business. In the quarter, we achieved our strongest new subscription quarter in three years, grew commerce revenue by 43% year-over-year, and generated $2 million in revenue from BARK Air—just seven months after launch. Importantly, we delivered these results while maintaining a disciplined focus on profitability. We are Adjusted EBITDA positive through the first three quarters of fiscal 2025 and remain on track to achieve our first full year of positive Adjusted EBITDA next month. With a strong foundation and the right team in place, we are taking decisive steps to position BARK for sustainable growth and long-term value creation."

Fiscal Third Quarter 2025 Highlights

Balance Sheet Highlights

Fiscal Fourth Quarter and Full Year 2025 Financial Outlook Based on current market conditions as of February 5, 2025, BARK is providing guidance for revenue and Adjusted EBITDA, which is a Non-GAAP financial measure, as follows.

For the fiscal year 2025, the Company is reaffirming its guidance of:

For the fourth quarter of fiscal 2025, the Company expects:

We do not provide guidance for Net Loss due to the uncertainty and potential variability of certain items, including stock-based compensation expenses and related tax effects, which are the reconciling items between Net Loss and Adjusted EBITDA. Because such items cannot be calculated or predicted without unreasonable efforts, we are unable to provide a reconciliation of Adjusted EBITDA to Net Loss. However, such items could have a significant impact on Net Loss.

The guidance provided above constitutes forward looking statements and actual results may differ materially. Please refer to the “Forward Looking Statements” section below for information on the factors that could cause our actual results to differ materially from these forward looking statements and “Non-GAAP Financial Measures” for additional important information regarding Adjusted EBITDA.

Conference Call Information A conference call to discuss the Company's fiscal third quarter 2025 results will be held today, February 5, 2025, at 4:30 p.m. ET. During the conference call, the Company may make comments concerning business and financial developments, trends and other business or financial matters. The Company's comments, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.

The conference call can be accessed by dialing 1-888-596-4144 for U.S. participants and 1-646-968-2525 for international participants. The conference call passcode is 5515653. A live audio webcast of the call will be available at https://investors.bark.co/events-and-presentations/ and will be archived for 1 year.

About BARK BARK is the world’s most dog-centric company, devoted to making dogs happy with the best products, services and content. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, wildly satisfying treats, great food for your dog, effective and easy to use dental care, and dog-first experiences that foster the health and happiness of dogs everywhere. Founded in 2011, BARK loyally serves dogs nationwide with themed toys and treats subscriptions, BarkBox and BARK Super Chewer; custom product collections through its retail partner network, including Target and Amazon; its high-quality, nutritious meals made for your breed with BARK Food; and products that meet dogs’ dental needs with BARK Bright®. At BARK, we want to make dogs as happy as they make us because dogs and humans are better together. Sniff around at BARK.co for more information.

Forward Looking Statements This press release contains forward-looking statements relating to, among other things, the future performance of BARK that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” "anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. These statements include, but are not limited to, statements about future operating results, including our strategies, plans, commitments, objectives and goals. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to, risks relating to the uncertainty of the projected financial information with respect to BARK; the risk that spending on pets may not increase at projected rates; that BARK subscriptions may not increase their spending with BARK; BARK’s ability to continue to convert social media followers and contacts into customers; BARK’s ability to successfully expand its product lines and channel distribution; competition; the uncertain effects of global or macroeconomic events or challenges.

More information about factors that could affect BARK's operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company's quarterly report on Form 10-Q, copies of which may be obtained by visiting the Company’s Investor Relations website at https://investors.bark.co/ or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the Company on the date hereof. The Company assumes no obligation to update such statements.

Definitions of Key Performance Indicators

Total Orders We define Total Orders as the total number of Direct to Consumer orders shipped in a given period. These include all orders across all of our product categories, regardless of whether they are purchased on a subscription, auto-ship, or one-off basis. Total Orders excludes orders from BARK Air. We use Total Orders as an indicator of customer interest and demand.

Average Order Value Average Order Value (“AOV”) is Direct to Consumer revenue for the period divided by Total Orders for the same period. AOV excludes Direct to Consumer revenue from BARK Air. We use AOV to provide insight into customer spending patterns.

Key Performance Indicators

Three Months Ended December 31,

Nine Months Ended December 31,

2024

2023

2024

2023

Total Orders (in thousands)

3,332

3,504

10,044

10,425

Average Order Value

31.25

31.65

31.03

31.38

Direct to Consumer Gross Profit (in thousands)(1)

70,154

70,801

204,927

208,062

Direct to Consumer Gross Margin (1)

67.4

63.8

65.7

63.6

(1)

Direct to Consumer Gross Profit and Direct to Consumer Gross Margin does not include the revenue or cost of goods sold from BARK Air.

BARK, Inc.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands)

Three Months Ended

Nine Months Ended

December 31,

2024

2023

2024

2023

REVENUE

126,449

125,075

368,772

368,700

COST OF REVENUE

47,189

47,831

140,134

142,779

Gross profit

79,260

77,244

228,638

225,921

OPERATING EXPENSES:

General and administrative

64,141

66,119

190,709

204,467

Advertising and marketing

27,364

25,094

66,460

60,523

Total operating expenses

91,505

91,213

257,169

264,990

LOSS FROM OPERATIONS

(12,245

)

(13,969

)

(28,531

)

(39,069

)

INTEREST INCOME

1,179

1,718

4,011

5,851

INTEREST EXPENSE

(677

)

(902

)

(2,074

)

(3,648

)

OTHER INCOME (EXPENSE)—NET

234

3,045

(217

)

4,758

NET LOSS BEFORE INCOME TAXES

(11,509

)

(10,108

)

(26,811

)

(32,108

)

PROVISION FOR INCOME TAXES

—

NET LOSS AND COMPREHENSIVE LOSS

(11,509

)

(10,108

)

(26,811

)

(32,108

)

DISAGGREGATED REVENUE

(In thousands)

Three Months Ended

Nine Months Ended

December 31,

2024

2023

2024

2023

Revenue

Direct to Consumer:

Toys & Accessories(1)

64,348

71,183

201,799

210,433

Consumables(1)

39,808

39,720

109,909

116,666

Other(2)

1,963

—

4,069

—

Total Direct to Consumer

106,119

110,903

315,777

327,099

Commerce

20,330

14,172

52,995

41,601

Revenue

126,449

125,075

368,772

368,700

(1)

The allocation between Toys & Accessories and Consumables includes estimates and was determined utilizing data on stand-alone selling prices that the Company charges for similar offerings, and also reflects historical pricing practices.

(2)

Other Direct to Consumer revenue derived from the BARK Air.

GROSS PROFIT BY SEGMENT

(In thousands)

Three Months Ended

Nine Months Ended

December 31,

2024

2023

2024

2023

Direct to Consumer:(1)

Revenue

106,119

110,903

315,777

327,099

Cost of revenue

35,796

40,102

110,930

119,037

Gross profit

70,323

70,801

204,847

208,062

Commerce:

Revenue

20,330

14,172

52,995

41,601

Cost of revenue

11,393

7,729

29,204

23,742

Gross profit

8,937

6,443

23,791

17,859

Consolidated:

Revenue

126,449

125,075

368,772

368,700

Cost of revenue

47,189

47,831

140,134

142,779

Gross profit

79,260

77,244

228,638

225,921

(1)

Direct to Consumer segment gross profit include revenue and cost of revenue from BARK Air.

BARK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

December 31,

March 31,

2024

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

115,259

125,495

Accounts receivable—net

11,415

7,696

Prepaid expenses and other current assets

12,371

4,379

Inventory

90,360

84,177

Total current assets

229,405

221,747

PROPERTY AND EQUIPMENT—NET

22,070

25,540

INTANGIBLE ASSETS—NET

7,428

11,921

OPERATING LEASE RIGHT-OF-USE ASSETS

29,283

32,793

OTHER NONCURRENT ASSETS

4,006

6,587

TOTAL ASSETS

292,192

298,588

LIABILITIES, AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

27,086

13,737

Operating lease liabilities, current

5,668

5,294

Accrued and other current liabilities

41,795

30,490

Deferred revenue

23,524

25,957

Current portion of long-term debt

42,461

—

Total current liabilities

140,534

75,478

LONG-TERM DEBT

—

39,926

OPERATING LEASE LIABILITIES

38,306

42,599

OTHER LONG-TERM LIABILITIES

314

1,202

Total liabilities

179,154

159,205

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS’ EQUITY:

Common stock, par value $0.0001 per share—500,000,000 shares authorized; 183,965,936 and 180,176,725 shares issued

Treasury stock, at cost, 9,869,120 and 4,643,589 shares, respectively

(14,248

)

(6,225

)

Additional paid-in capital

500,953

492,427

Accumulated deficit

(373,668

)

(346,820

)

Total stockholders’ equity

113,038

139,383

TOTAL LIABILITIES, AND STOCKHOLDERS’ EQUITY

292,192

298,588

BARK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine Months Ended

December 31,

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

(26,811

)

(32,108

)

Adjustments to reconcile net loss to cash provided by operating activities:

Depreciation & amortization

8,383

8,899

Impairment of assets

2,142

3,079

Non-cash lease expense

3,510

3,120

Loss on disposal of assets

—

Amortization of deferred financing fees and debt discount

299

478

Bad debt expense

—

Stock-based compensation expense

9,771

10,510

Provision for inventory obsolescence

1,072

888

Gain on extinguishment of debt

—

(1,828

)

Change in fair value of warrant liabilities and derivatives

652

(2,216

)

Paid in kind interest on convertible notes

2,235

2,119

Changes in operating assets and liabilities:

Accounts receivable

(3,719

)

Inventory

(7,255

)

24,975

Prepaid expenses and other current assets

(2,105

)

(1,123

)

Other noncurrent assets

(1,733

)

—

Accounts payable and accrued expenses

26,696

(4,894

)

Deferred revenue

(2,433

)

1,247

Proceeds from tenant improvement allowances

—

Operating lease liabilities

(3,919

)

(3,522

)

Other liabilities

(3,606

)

(2,687

)

Net cash provided by operating activities

3,179

7,106

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(4,428

)

(6,699

)

Net cash used in investing activities

(4,428

)

(6,699

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of finance lease obligations

(165

)

(161

)

Proceeds from the exercise of stock options

554

105

Proceeds from issuance of common stock under ESPP

425

489

Tax payments related to the issuance of common stock

(2,181

)

(1,011

)

Excise tax from stock repurchases

(43

)

(42

)

Payments to repurchase common stock

(8,023

)

(4,120

)

Payments of long-term debt

—

(42,300

)

Net cash used in financing activities

(9,433

)

(47,040

)

Effect of exchange rate changes on cash

(37

)

(14

)

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(10,719

)

(46,647

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—BEGINNING OF PERIOD

130,704

183,068

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD

119,985

136,421

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

Cash and cash equivalents

115,259

131,284

Restricted cash - prepaid expenses and other current assets, other noncurrent assets

4,726

5,137

Total cash, cash equivalents and restricted cash

119,985

136,421

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Purchases of property and equipment included in accounts payable and accrued liabilities

189

Cash paid for interest

2,237

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. GAAP. However, management believes that Adjusted Net Loss, Adjusted Net Loss Margin, Adjusted Net Loss Per Common Share, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow, all non-GAAP financial measures (together the “Non-GAAP Measures”), provide investors with additional useful information in evaluating our performance.

We calculate Adjusted Net Loss as net loss, adjusted to exclude: (1) stock-based compensation expense, (2) change in fair value of warrants and derivatives, (3) sales and use tax income, (4) restructuring charges related to reduction in force payments, (5) litigation expenses (consisting of legal and related fees for a specific proceeding that is outside of our ordinary course of business), (6) warehouse restructuring costs, (7) non-cash impairment of previously capitalized software and cloud computing implementation costs, (8) technology modernization costs, (9) gain on extinguishment of debt, and (10) other items (as defined below).

We calculate Adjusted Net Loss Margin by dividing Adjusted Net Loss for the period by Revenue for the period.

We calculate Adjusted Net Loss Per Common Share by dividing Adjusted Net Loss for the period by weighted average common shares used to compute net loss per share attributable to common stockholders for the period.

We calculate Adjusted EBITDA as net loss, adjusted to exclude: (1) interest income, (2) interest expense, (3) depreciation and amortization, (4) stock-based compensation expense, (5) change in fair value of warrants and derivatives, (6) capitalized cloud computing amortization, (7) sales and use tax income, (8) restructuring charges related to reduction in force payments, (9) litigation expenses (consisting of legal and related fees for a specific proceeding that is outside of our ordinary course of business), (10) warehouse restructuring costs, (11) non-cash impairment of previously capitalized software and cloud computing implementation costs, (12) technology modernization costs, (13) gain on extinguishment of debt, and (14) other items (as defined below).

We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA for the period by revenue for the period.

We calculate Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures.

The Non-GAAP Measures are financial measures that are not required by, or presented in accordance with U.S. GAAP. We believe that the Non-GAAP Measures, when taken together with our financial results presented in accordance with U.S. GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of the Non-GAAP Measures are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

The Non-GAAP Measures are presented for supplemental informational purposes only, have limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of the Non-GAAP Measures include that (1) the measures do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) Adjusted EBITDA and Adjusted EBITDA Margin do not consider the impact of stock-based compensation expense, which is an ongoing expense for our company, (4) Adjusted EBITDA and Adjusted EBITDA Margin do not reflect other non-operating expenses, including interest expense. In addition, our use of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies because they may not calculate the Non-GAAP Measures in the same manner, limiting their usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider the Non-GAAP Measures alongside other financial measures, including our net income (loss) and other results stated in accordance with U.S. GAAP, and (5) Free cash flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.

The following table presents a reconciliation of Adjusted Net Loss to Net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, and the calculation of net loss margin, Adjusted Net Loss Margin and Adjusted Net Loss Per Common Share for the periods presented:

Adjusted Net Loss

Three Months Ended December 31,

Nine Months Ended December 31,

2024

2023

2024

2023

(in thousands, except per share data)

Net Loss

(11,509

)

(10,108

)

(26,811

)

(32,108

)

Stock compensation expense

3,873

3,596

9,771

10,510

Change in fair value of warrants and derivatives

(261

)

(782

)

652

(2,216

)

Sales and use tax income (1)

(450

)

(18

)

(1,999

)

(155

)

Restructuring

924

—

2,624

1,543

Litigation expenses (2)

468

1,106

Warehouse restructuring costs

2,391

—

3,289

161

Impairment of assets

—

109

2,142

3,079

Technology modernization (3)

545

—

1,750

—

Gain on extinguishment of debt

—

(1,828

)

—

(1,828

)

Other items (4)

381

827

1,384

Adjusted net loss

(3,931

)

(8,555

)

(6,649

)

(19,535

)

Net loss margin

(9.10

(8.08

(7.27

(8.71

Adjusted net loss margin

(3.11

(6.84

(1.80

(5.30

Adjusted net loss per common share - basic and diluted

(0.02

)

(0.05

)

(0.04

)

(0.11

)

Weighted average common shares used to compute adjusted net loss per share attributable to common stockholders - basic and diluted

175,589,759

175,540,096

175,404,510

176,611,729

The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, and the calculation of net loss margin and Adjusted EBITDA margin for the periods presented:

Adjusted EBITDA

Three Months Ended December 31,

Nine Months Ended December 31,

2024

2023

2024

2023

(in thousands)

Net Loss

(11,509

)

(10,108

)

(26,811

)

(32,108

)

Interest income

(1,179

)

(1,718

)

(4,011

)

(5,851

)

Interest expense

677

902

2,074

3,648

Depreciation and amortization expense

2,704

2,958

8,383

8,899

Stock compensation expense

3,873

3,596

9,771

10,510

Change in fair value of warrants and derivatives

(261

)

(782

)

652

(2,216

)

Cloud computing amortization

174

—

346

—

Sales and use tax income (1)

(450

)

(18

)

(1,999

)

(155

)

Restructuring

924

—

2,624

1,543

Litigation expenses (2)

468

1,106

Warehouse restructuring costs

2,391

—

3,289

161

Impairment of assets

—

109

2,142

3,079

Technology modernization (3)

545

—

1,750

—

Gain on extinguishment of debt

—

(1,828

)

—

(1,828

)

Other items (4)

381

827

1,384

Adjusted EBITDA

(1,555

)

(6,413

)

143

(12,839

)

Net loss margin

(9.10

(8.08

(7.27

(8.71

Adjusted EBITDA margin

(1.23

(5.13

0.04

(3.48

(1)

Sales and use tax expense relates to recording a liability for sales and use tax we did not collect from our customers. Historically, we had collected state or local sales, use, or other similar taxes in certain jurisdictions in which we only had physical presence. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc., that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have positioned themselves to require sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state and accordingly, we recorded a liability in those periods in which we created economic nexus based on each state’s requirements. Accordingly, we now collect, remit, and report sales tax in all states that impose a sales tax. Subsequently, as certain of these liabilities are waived by tax authorities or the applicable statute of limitations expires, the related accrued liability is reversed.

(2)

Litigation expenses related to a shareholder class action complaint, see Item 1. Legal Proceedings in the Company's quarterly report on Form 10-Q.

(3)

Includes consulting fees related to technology transformation activities, and payroll costs for employees that dedicate significant time to this project. We believe that these costs are discrete and non-recurring in nature, as they relate to a one-time unification of our product offerings on our new commerce platform. As such, they are not normal, recurring operating expenses and are not reflective of ongoing trends in the cost of doing business.

(4)

For the three months ended December 31, 2024, other items is comprised of executive transition costs including recruiting costs of less than $0.1 million, costs associated with the share repurchase program of less than $0.1 million, and duplicate headquarters rent of less than $0.1 million. For the three months ended December 31, 2023, other items is comprised of non-recurring retention payments of $0.4 million, and duplicate headquarters rent of less than $0.1 million. For the nine months ended December 31, 2024, other items is comprised of executive transition costs including recruiting costs of $0.5 million, costs associated with the share repurchase program of $0.3 million, and duplicate headquarters rent of less than $0.1 million. For the nine months ended December 31, 2023, other items is comprised of non-recurring retention payments of $0.9 million, executive transition costs including recruiting costs of $0.4 million, and duplicate headquarters rent of less than $0.1 million.

The following table presents a reconciliation of Free Cash Flow to Net cash used in operating activities, the most directly comparable financial measure prepared in accordance with U.S. GAAP, for each of the periods indicated:

Free Cash Flow

Three Months Ended December 31,

Nine Months Ended December 31,

2024

2023

2024

2023

Free cash flow reconciliation:

Net cash provided by (used in) operating activities

(1,387

)

15,022

3,179

7,106

Capital expenditures

(577

)

(1,766

)

(4,428

)

(6,699

)

Free cash flow

(1,964

)

13,256

(1,249

)

407

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