BARK’s Strategic Announce: Focus on Sustainability and Growth
BARK, Inc. a leading global omnichannel dog brand dedicated to making all dogs happy, has announced its financial results for the fiscal third quarter, which ended on December 31, 2024. This report provides a comprehensive overview of the Company’s performance, key highlights, and financial outlook as it continues to navigate its growth trajectory.
Key Financial Highlights:
- Total Revenue: BARK reported Announce total revenue of $126.4 million, surpassing the high end of the Company’s guidance range. This marks a 1.1% increase compared to the same quarter last year, reflecting steady growth amidst a dynamic market environment.
- Commerce Revenue: The Company achieved $20.3 million in commerce revenue, representing a robust 43.5% year-over-year increase. This growth is attributed to successful partnerships and strategic expansion in shelf space and product offerings.
- Gross Margin: Gross margin improved to 62.7%, an increase of 90 basis points from the prior year, highlighting enhanced operational efficiency and cost management.
- Net Loss: BARK reported a net loss of $(11.5) million, which is $1.4 million greater than the same period last year. This variance is primarily due to a $1.8 million gain from debt extinguishment recorded in the previous fiscal year.
- Adjusted EBITDA: The Company reported Announce an Adjusted EBITDA of $(1.6) million, which is within its guidance range and reflects a $4.9 million year-over-year improvement. This progress underscores BARK’s focus on operational discipline and profitability.
Executive Commentary:
Matt Meeker, Co-Founder and Chief Executive Officer of BARK, expressed optimism about the Company’s performance: “We closed 2024 on a high note, exceeding our revenue expectations and achieving our tenth consecutive year-over-year improvement in Adjusted EBITDA. Our efforts to build and empower a world-class leadership team are paying off, with significant momentum across the business. Notably, we recorded our strongest quarter for new subscriptions in three years, grew commerce revenue by 43%, and generated $2 million in revenue from BARK Air just seven months after its launch.
Importantly, we achieved these milestones 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.”
Detailed Fiscal Third Quarter 2025 Results:
- Revenue Performance: Total revenue of $126.4 million exceeded the Company’s guidance range of $123.0 million to $126.0 million, reflecting a 1.1% year-over-year growth. This performance was driven primarily by the strong 43.5% increase in commerce revenue.
- Direct-to-Consumer (DTC) Revenue: DTC revenue was $106.1 million, representing a 4.3% decline compared to the same quarter last year. The decrease is attributed to a reduction in total orders, though the Company continues to optimize its DTC strategies.
- Commerce Revenue: Commerce revenue reached $20.3 million, marking a substantial 43.5% increase year-over-year. This growth is fueled by new partnerships, expanded shelf space, and an increase in SKU offerings with existing partners.
- Gross Profit and Margin: Gross profit for the quarter was $79.3 million, reflecting a 2.6% increase from the previous year. The gross margin improved to 62.7%, up from 61.8% in the prior-year period, demonstrating effective cost management and pricing strategies.
- Operating Expenses:
- Advertising and Marketing: Expenses totaled $27.4 million, up from $25.1 million in the same quarter last year. This increase aligns with the Company’s strategy to invest in customer acquisition, as evidenced by an 11% rise in new subscriptions.
- General and Administrative (G&A) Expenses: G&A expenses decreased to $64.1 million from $66.1 million last year, primarily due to reductions in headcount and other efficiency initiatives.
- Net Loss: The net loss for the quarter was $(11.5) million, compared to $(10.1) million in the same period last year. The increase is largely attributable to the absence of a $1.8 million gain from debt extinguishment that benefited the prior-year results.
- Adjusted EBITDA: BARK reported Adjusted EBITDA of $(1.6) million, positioned at the midpoint of its guidance range of $(3.0) million to breakeven. The Company’s strategic marketing investments have contributed to efficient customer acquisition and revenue growth.
- Cash Flow: Net cash used in operating activities was $(1.4) million, while free cash flow, defined as net cash used in operating activities less capital expenditures, was $(2.0) million.
Balance Sheet Highlights:
- Cash and Cash Equivalents: As of December 31, 2024, BARK had $115.3 million in cash and cash equivalents. This balance reflects $2.8 million in share repurchases at an average price of $1.69 during the quarter. Year-to-date through December 31, 2024, the Company has repurchased $8.0 million worth of shares at an average price of $1.54.
- Inventory: The Company’s inventory stood at $90.4 million as of December 31, 2024, an increase of $6.2 million compared to March 31, 2024. This growth is driven by strategic inventory builds in anticipation of higher sales in fiscal 2026.
Fiscal Fourth Quarter and Full Year 2025 Financial Outlook:
Based on current market conditions as of February 5, 2025, BARK is providing the following guidance:
- Full Year Fiscal 2025 Guidance:
- Total Revenue: The Company reaffirms its guidance of $490 million to $500 million, representing flat to 2.0% year-over-year growth.
- Adjusted EBITDA: Expected to be between $1.0 million and $5.0 million, reflecting an improvement of $11.6 million to $15.6 million compared to the previous year.
- Fourth Quarter Fiscal 2025 Guidance:
- Total Revenue: Projected to be in the range of $121.2 million to $131.2 million, representing year-over-year growth of (0.2)% to 8.0%. This range accounts for potential variability in commerce shipment timing, which could shift revenue between fiscal quarters.
- Adjusted EBITDA: Expected to range from $0.9 million to $4.9 million, reflecting a year-over-year improvement of $(1.3) million to $2.7 million. This outlook considers potential fluctuations in marketing investments, given the recent success in acquiring new subscriptions efficiently.
BARK does not provide guidance for Net Loss due to the inherent variability of certain items, such as stock-based compensation expenses and related tax effects, which are challenging to predict accurately. These factors are the primary reconciling items between Net Loss and Adjusted EBITDA.
