Bark Inc at Canaccord Conference: Strategic Diversification

On Tuesday, 12 August 2025, Bark Inc (NYSE:BARK) presented at Canaccord Genuity’s 45th Annual Growth Conference, revealing a strategic shift towards revenue diversification and operational efficiency. While the company celebrated a financial turnaround, challenges such as tariffs and increased shipping costs were also addressed.

Key Takeaways

• Bark Inc achieved a financial turnaround from a $58 million adjusted EBITDA loss in 2022 to a $5 million positive in 2025.
• The company is diversifying revenue streams beyond its core D2C subscription business, including a new airline for dogs and a consumables line.
• Bark is mitigating tariff impacts through supply chain diversification and a strategic partnership with Amazon for shipping.
• A shift in marketing strategy prioritizes profitability and customer lifetime value over subscriber volume.
• Bark is open to M&A offers, citing undervaluation due to tariff noise and strategic shifts.

Financial Results

• Adjusted EBITDA: Improved from a $58 million loss in 2022 to a $5 million positive in 2025.
• D2C Revenue: Comprises 85% of total revenue, with a record 69% gross margin in Q1.
• Commerce Revenue: Grew 27% in fiscal 2025, with a 50% year-over-year increase in Q1.
• Bark Air Revenue: Generated over $2 million in Q1, with expectations to double this year.
• Marketing Spend: Reduced by 20%-25% year-over-year, reallocating to commerce and consumables.
• Debt: Convertible note of $44 million maturing in December, with plans for repayment and credit renewal.

Operational Updates

• Tariffs: Manufacturing diversification outside of China to mitigate tariff impacts.
• Shipping: Partnership with Amazon’s "Ship with Amazon" service to enhance shipping efficiency.
• Shopify Transition: Completed, improving cross-selling opportunities and marketing efficiency.
• Consumables Launch: "Bark in the Belly" launching in August, with distribution expansion planned for 2026.

Future Outlook

• Revenue Growth: Expected return to top-line growth in fiscal year 2027.
• Commerce Growth: Anticipated 25%-30% growth this year.
• Consumables Expansion: "Bark in the Belly" to be available on Amazon and Chewy by the end of 2025, with retail distribution in 2026.
• Etailer Growth: Strong performance on Chewy, exceeding expectations.
• Walmart Target Share: Aiming for a double-digit share, up from the current 3%.

Q&A Highlights

• M&A Inquiries: Open to attractive offers, viewing the share price as undervalued due to tariff noise and strategy shifts.

For a more detailed analysis, please refer to the full transcript below.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Maria Ripps, Internet Analyst, Canaccord Genuity: Good morning, everyone. Thank you all for joining us today. I’m Maria Ripps, Internet analyst here at Canaccord Genuity. And it’s my pleasure to introduce Zahir Ebrahim, Barg’s CFO. Zahir, thank you so much for joining us today.

Zahir Ebrahim, CFO, Bark: Yeah, good morning. Thank you for having me.

Maria Ripps, Internet Analyst, Canaccord Genuity: Awesome. So let’s start with sort of a high level overview of the company. How has the company evolved over the past couple of years and how how is Bug different from other pet focused sort of companies in the space?

Zahir Ebrahim, CFO, Bark: Sure. You know, there’s there’s been a number of changes over the last few years. I think the biggest one is the financial health and profile of the business. So if you think back three years ago, fiscal twenty two, we had an adjusted EBITDA loss of $58,000,000. Fast forward three years, we’ve done a really nice job of turning that around.

The results that we filed in March for fiscal twenty twenty five was a positive 5,000,000 adjusted EBITDA. So that coupled with just far more stable cash flows as well has been probably a major highlight. In terms of the overall business, I mean, a bit of context, d to c is 85% of our revenues. Lifetime to date, you know, we’ve shipped to over 700 pet parents and pet households. On a monthly basis, we ship around a million boxes to customers.

And as you ask what’s unique about our business, we have a ton of first party data and insights as a result of those interactions, and that allows us to refine our products based on the feedback that we get. As I’ll move to talking about consumables in a moment, it’ll allow us to test and improve all of our new innovation with our customers and get real time feedback from those guys. In addition to d to c, we’ve got a presence in commerce. So we sell to all the major retailers in The US as well as Amazon and Chewy. That represents about 15% of our business as at the end of fiscal twenty five.

We grew that channel 27% last year

Maria Ripps, Internet Analyst, Canaccord Genuity: Right.

Zahir Ebrahim, CFO, Bark: And we expect a similar level of growth this coming year as well. About a year ago, we launched, an airline for dogs called Bark Air. First quarter this year, we generated over 2,000,000 of revenues with that. We expect to double the revenues from that channel this year as well. As you think about other changes that we’ve seen or that are upcoming, for the first thirteen years of our business, we d two c business was on homegrown systems.

It had a multitude of platforms. So if a customer wanted to come on, they had to go to multiple sites to access our products. They couldn’t do one order, one checkout. And so we moved to Shopify starting in October. And so far, that transition has gone well, and now customers are able to access our full portfolio.

And that’s gonna help cross sell and drive AOV in the future. And I suppose the last thing that we’ll touch upon more in a moment is we’re launching with a consumables line called Bark in the Belly. That’s gonna launch at the August, so in two weeks time. So you need to get yourself onto our website, and you can access our products, and then we’ll be launching that more broadly thereafter.

Maria Ripps, Internet Analyst, Canaccord Genuity: Great. That’s a that’s a great overview, and we’re gonna touch on some of the points that you highlighted. But maybe can you maybe sort of expand on your strategic initiative to diversify your revenue base? You sort of just talked about it. And and what does that mean for your sort of investment priorities going forward?

Zahir Ebrahim, CFO, Bark: Yeah. I suppose the biggest piece for us is the vast majority of our d to c revenue is through subscription boxes. That’s a real solid business. It’s a predictable revenue stream for us. We what we’ve seen with the tariff headwinds that have come into place and just the macro uncertainty, we’re of our priorities is to continue to deliver positive adjusted EBITDA going forward and to also diversify our revenue base into other areas.

So we’ll be dialing back our marketing support on the subscription side of the house and investing some of that in our consumables launch as well as just putting more dollars behind commerce growth. We see those as major avenues of growth while we bring the D2C business to stability over the next twelve months.

Maria Ripps, Internet Analyst, Canaccord Genuity: That makes sense. So let’s dive into some of the specifics of your DTC business. As you just alluded to, business has been under pressure with consumer spending and more recently with tariffs. I guess, talk about how tariffs are impacting your business and what are some of the initiatives that you are taking to mitigate some of those impacts?

Zahir Ebrahim, CFO, Bark: Yeah. Sure. So as context, roughly 70% of our product mix is toys. At the start of this fiscal year, virtually all of those were sourced from China. So, you know, go back to February, the tariffs went up 10%.

Through April, they went as high as a 145 and then came down to 30% as they are right now. We always had the viewpoint of diversifying manufacturing. What what the tariffs did was accelerate that process. So as we speak now, we’re sourcing products from outside of China. We’ll start shipping some of that product to customers during the second half of the year.

By the end of the fiscal year, we’ll have the capability to manufacture all of our toys outside of China. So they’ll be in Asia Pac. They’ll be in South America. But that will give us a lot more flexibility because you just don’t know which way the tariffs are gonna go Right. Going forward, and you can just basically align your cost structure to whatever is the most advantageous structure.

Aside from tariffs, I’d say the other big headwind we saw coming into this year was USPS increased their last last mile delivery charges. So we saw significant increases pass through to us from our incumbent partner, which was UPS in terms of our DTC shipment packages. And so I’m really pleased to announce that we’ve just signed an agreement with Amazon with their ship by Amazon. So ship with Amazon, sorry, service SWA. So our packages will now ship with Amazon’s parcels to the customer’s door.

Importantly, we’re the first national commercial partner that Amazon’s partnering with. So that’s fantastic to see. We feel really good about the strategic partnership we have with Amazon. It’s focused on service. We’ll we’ll be able to ship our parcels faster.

Mhmm. Customers will have more visibility in the supply chain where their packages are. Our costs will come down, so you’ll see elevated costs in the first half of the year because of the rate hikes. You’ll start seeing that correcting and improving on even the f 25 levels as we exit the year. So super excited about those two mitigation actions that we’ve taken.

Maria Ripps, Internet Analyst, Canaccord Genuity: That that’s great. Is there is there any way you can maybe you you can help investors think about the impact of this sort of of your new shipping partner sort of as we look at the second half of the year?

Zahir Ebrahim, CFO, Bark: Yeah. I mean, you if you look at our shipping and fulfillment costs, you’ll see them higher in the first half of the year. So you saw q one levels. They’ll probably continue into q two. But as you get into q three and q four, you’ll see triple basis points improvement in our shipping and fulfillment costs in q three and q four as a result of this.

Nice. Those are major for us.

Maria Ripps, Internet Analyst, Canaccord Genuity: Perfect. So on your earnings call last week, you you highlighted encouraging trends in subscriber acquisition and retention despite lower marketing spend. Can you maybe just talk about what’s driving that? How sustainable is that? And just sort of how should investors think about that that dynamic going forward?

Zahir Ebrahim, CFO, Bark: Yeah. Back to what I was saying earlier on, we’re we’re dialing back our marketing support on the d to c business primarily because we wanna make sure that the business remains EBITDA positive.

Maria Ripps, Internet Analyst, Canaccord Genuity: Right.

Zahir Ebrahim, CFO, Bark: And secondly, we’ll reallocate some of those dollars to commerce and and air, but prime primarily commerce. In relation to this year so media is gonna be lower on d two c. The other piece is we’re gonna reduce the number of promos that we’re gonna run. So what we find is promotions tend to attract discount led customers who churn a lot faster. They’ll come in, they’ll take advantage of the promotion, and then they’ll churn out the following couple of months.

So, our focus is coming into the year, lower spend on d to c. That’ll impact the level of new subs we bring on and therefore will have an impact on our d to c revenues during the course of this year. We expect that to stabilize as we exit the year and go into next year. With those marketing dollars, it’s then shift them into the consumables launch. I mean, this is the first time we’re gonna have a consumables brand with consistent branding, a strong suite of products, retail ready packaging and and shelf friendly.

And so we wanna make sure that we divert the appropriate investment behind that growth. In addition, on commerce, we’ve got growth opportunities both in bricks and mortar, in toys. We’ve also got that in consumables as well, obviously, and then internationally. So I want to make sure where we’ve got white space, we move dollars there to support that growth.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. Is it fair to say that the quality of your subscriber base is getting sort of stronger, so the LTV of your current

Zahir Ebrahim, CFO, Bark: Yeah. That’s a good point. So what we saw in q one, even though we were expecting reduced subscribers compared to historic levels, subscribers came in higher than our expectations. And so part of that is driven by just a number of things. Right?

So our ad creative has just improved significantly. We’re using AI, to drive some of our ad turnaround in creative, and that’s just given us more iterations to try new stuff quicker on Shopify. We’ve improved our funnel and our landing pages. If you go on our site, it’s significantly better than it was before. So that whole consumer experience is a lot stronger, And so you’re seeing that in terms of just play out in terms of, for example, customers are now subscribing to our more premium product, the Supertura range.

So q one last year, a third of new subscribers came into soup the Supertura product line. This year, it was two thirds. So and that’s gonna just drive AOV performance going forward. From a retention perspective, having fewer promo led new subscribers is is gonna help you improve your retention. We’ve also just driven a ton of refinements in conjunction with Shopify.

So certain functionality we had in the legacy world, you’re now bringing that into Shopify. It’s taken a few months to put up put that in place. Both of those are driving retention improvements as well.

Maria Ripps, Internet Analyst, Canaccord Genuity: And I guess to that point, with the Shopify transition now complete, so what does that mean for sort of the cross sell opportunity? And also talk about any marketing efficiency as a result of that.

Zahir Ebrahim, CFO, Bark: Yeah. We expect cross sell and marketing efficiency to to improve, you know, in short. You you went from if any of you were customers of bot.bot.com, there were four or five different platforms. So if you wanted to buy a basic BarkBox product, a SuperTure product, a food product, dental product, you went to different websites, different logins, different carts to check out. So we really were not enhancing our cross sell opportunity.

Under Shopify, like I said, it’s a unified platform. It’s modern. It’s agile. All your products are accessible when you go with the one sign in, one cart, and you can exit. So that will enhance our ability to cross sell.

Shopify also gives you access to things like Apple Pay, Shop Pay, things that we did not have access to before. They reduce payment friction and so that should drive improved conversion as well. So those things are just going to be tailwinds. I think the unified branding on the consumable side, the look, feel, the focus that we’re going to have, and there’s going be a greater focus to push that to existing customers as well as new subscribers, that’s going to drive the upsell and AOV.

Maria Ripps, Internet Analyst, Canaccord Genuity: So let’s switch gears here and talk about your commerce business, which has been sort of a key strategic focus for the company. Maybe talk about your current retail partner network and sort of what are your plans for expanding that business even further? And you I should say, you delivered pretty nice growth there in q last quarter. Yeah. It grew, like, 50% year over year.

Zahir Ebrahim, CFO, Bark: Yeah. Q one, we grew 50% year over year. So, yeah, we’ve been working in the commerce space for the last five or so years. It’s predominantly focused on toys, so 95 plus percent of the revenue is based on toys. We work with all the major retailers, Walmart, Target, Costco, PetSmart, Petco.

We’re in over 50,000 doors. We’ve recently shifted and dialed up our focus also on etailers as well, so Amazon and Chewy, so we’re we’re available there as well. The ability to continue to grow toys distribution is still large. So just to give you a sense, Walmart has 20 share of toys, pet toys in Nielsen data. We have three share at Walmart.

So, you know, we should be significantly more than that. We should be double digit share. So there’s a lot of runway for growth just across the board with retailers just on toys. With the consumables categories that we’re going into, the addressable market in those between premium dry kibble, treat stoppers, dental and supplements, that’s north of $20,000,000,000. Toys is about 3,000,000,000 to $4,000,000,000.

So you’re just accessing a much bigger TAM. And I think just with the focus that we have, the innovation pipeline that we have coming along with that, the growth opportunities in commerce are going to be huge for consumables as well.

Maria Ripps, Internet Analyst, Canaccord Genuity: And you mentioned Amazon and Chewy. Are there any other sort of ecommerce platforms that you think might be a good fit for for your product?

Zahir Ebrahim, CFO, Bark: Yeah. Like I was saying, up until recently, we had not focused on etailers much at all. So for example, we traded with Chewy for the first time in June. We launched with 30 SKUs. As of now, we have over 200 SKUs with them.

The feedback we get from Chewy is that we have delivered revenues beyond their expectations, and they see a huge runway for growth for us. So that’s really positive. Amazon, we’d we’d dabbled with Amazon is the best way to put it. We tried different products, but not a real well thought out price assortment strategy with the right level of marketing support to drive the reviews that you need. And last year, we put we we did that switch, major focus.

Our revenues grew on Amazon by 80% last year, and we’re seeing strong growth going into this year. We also launched into Amazon Europe as well last year. A really good early start there. Other other online partners that we have, they’re the websites of our bricks and mortar customers, walmart.com, for example. So they’re great growth opportunities.

We’re obviously looking at TikTok shop as well. So just an area that we have totally under indexed and focused on before. Massive runway for us to grow there.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. That makes sense. So in consumables, it feels like everyone is excited about your launch, Park in the Valley. Can you maybe talk about those products and where do you anticipate launching them sort of initially?

Zahir Ebrahim, CFO, Bark: Yeah. So if you went online today and went to bot.co, you’ll be able to see our consumables, and the thing you’ll notice is you’d think they’d launch from about six or seven different companies. So each product line has different branding. There’s no commonality in just messaging, look or feel on these products. So, you know, we’ve spent the last year plus in terms of working on the Bark in the Belly brand, and that’s gonna launch in August.

And effectively, what you’re gonna see is you all know our treats and our kibble are from the same company as you will with the dental products and so on. So that consistent branding is just gonna give a halo. If you’re if you’re marketing behind one of the product lines, that’s gonna be a halo across the board, and you get far better marketing efficiencies. In terms of the launch schedule, August on our site, two c. By the end of this calendar year, we’ll be with Amazon and Chewy.

And then as bricks and mortar retailers do their shelf research, we expect to get, you know, during calendar twenty twenty six distribution throughout the course of the year. In terms of the product lines, as I said, Gible, Treats, Toppers, Dental and Supplements, big time markets for us to play in.

Maria Ripps, Internet Analyst, Canaccord Genuity: Exciting.

Zahir Ebrahim, CFO, Bark: Yeah. Very.

Maria Ripps, Internet Analyst, Canaccord Genuity: So let’s talk about financials next. So if we assume the current tariff backdrop sort of continues here in the near term, although you outlined some of the sort of steps that you’re taking to diversify your business. But more broadly, how should we think about your business sort of stabilizing and returning to to growth on a consolidated basis?

Zahir Ebrahim, CFO, Bark: Yeah. As I said before, really pleased with delivering the EBITDA positive in fiscal twenty five. One of our stated priorities is stay EBITDA positive moving forward and continue to grow that and become cash flow generative and go from strength to strength. In terms of strategy, it’s pretty much near term. We’re gonna be sensible with our marketing dollars.

We’re not gonna overinvest on the d two c side. That will have a near term revenue impact on d two c, like I said. This fiscal year is repurposing those dollars onto commerce and the consumables launch where we see a ton of opportunity for growth. So those that’s the shape we see this year. As I think about growth from a top line perspective, I think as you go into fiscal twenty seven, it’s obviously too early to to guide or anything, but we believe with the channel dynamics we have with the consumables launch, we should be it’s reasonable to assume that we’d be returning to top line growth.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. That makes sense. And let’s dive a little bit deeper into kind of on your thoughts around maintaining your profitability. What are some puts and takes when it comes to sort of maintaining your profitability? I guess, what are some levers that you can scale up or down if, like, top line remains pressured in the near term?

Zahir Ebrahim, CFO, Bark: Yeah. I mean, from a revenue perspective or margin perspective, q one, we delivered on d to c, we delivered 69% gross margin. So that was a record gross margin quarter for us on the D2C side. We expect those margins to remain healthy going forward. Commerce grew strong in the quarter.

We expect commerce to continue to deliver 25% to 30% growth this year on the top line. In the second half of this year, we’ll get the benefit of a price increase that we executed in commerce as well. So that’s already been shared with retailers and that will just progressively be a tailwind from a top line and bottom line in the second half of the year. The manufacturing footprint diversification will increasingly give us flexibility to navigate the tariff headwind. We’ve got a number of productivity initiatives that are in flight.

Give you an example. We’re moving we’ve moved as of July from boxes to bags in terms of our d two c products, and the biggest reason for that is to reduce costs and avoid passing on some of the tariff headwinds to our d to c customers. So all of those initiatives kick in, some supplier contract negotiations, those benefits will flow in in the second half year. You’ve got the Amazon contract. Marketing will be reducing our spend year over year by 20% to 25%, so that’s part of the hedge.

G and A was a strong performance in q one. That’s just part of a continuation of a trend that we’ve seen over the last two to three years, and we still have areas that we can drive further improvement there. So there’s a number of levers that we can pull if the top line isn’t quite where we’ve expected it to be.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. I wanna ask you about some of the strategic initiatives, and I feel like a lot of investors have been wondering about this. So with shares under pressure, like given tariffs and new strategy, sort of how how are you thinking about sort of maybe fielding any m and a inquiries? Is that something that management team and the board open to?

Zahir Ebrahim, CFO, Bark: Yeah. I mean, the first first important point to note is insiders have a significant stake in terms of shareholding in the company. So insiders are aligned to our shareholders in terms of any go forward strategy around m and a. We think our share price is completely undervalued relative to the long term fundamentals of the business, and we think today’s share price is a reflection of the tariff noise. And there’s an element to some extent of you’ve shifted your strategy now, show me that you’re going to deliver to it.

So there’s I think those dynamics are are impacting the share price. If the right partner comes along with an attractive offer, management and the board would consider it. I think given our revenue profile, our strong position in a number of channels, the consumables launch, We’ve got access to all that first party data.

Maria Ripps, Internet Analyst, Canaccord Genuity: Great.

Zahir Ebrahim, CFO, Bark: A strong brand with a large presence in social media as well. We think that we’re a very attractive asset right now at the current share price.

Maria Ripps, Internet Analyst, Canaccord Genuity: Yeah, yeah, that makes sense. I want to pause here and see if there are any questions from the audience. We have a minute or so left here. Well, maybe just let’s touch on your capital allocation sort of framework here in the near term. You’ve been buying back shares, sort of what’s what’s the right sort of use of cash here for the company in the near term?

Zahir Ebrahim, CFO, Bark: Yeah. We’ve we’ve bought back over the last eighteen months 17,000,000 shares at around $26,000,000 use of cash. We’ve got a convertible note that matures in December. It’s around $44,000,000. We ended q one with 85,000,000 cash on hand.

So the aim is to pay down that debt, renew the line of credit that we have. The convertible does have some limitations in the amount of shares that you can buy back in any calendar year. So we’re looking at alternatives that will give us a bit more flexibility around capital allocation.

Maria Ripps, Internet Analyst, Canaccord Genuity: Got it. That makes sense. So just to wrap up, so if you look at your business overall, let’s say, over the next one, two, three years, what are you most excited about?

Zahir Ebrahim, CFO, Bark: We’re starting off from a foundation of really healthy financials and a solid overall cost structure with the revenue diversification that we’re talking about both from a channel perspective and product line perspective, coupled with the more flexible supply chain that we’re putting in place, continuing to improve the cost structure with the Amazon contract down on g and a and so forth. I think you’re looking at a business over the next two to three years that’s gonna have an increasingly healthier financial profile, deliver stronger profitability and stronger cash flow generation. Got it. So I’m super excited about the next two to three years.

Maria Ripps, Internet Analyst, Canaccord Genuity: Perfect. Well, with that, we are out of time. Tahit, thank you so much for joining us today.

Zahir Ebrahim, CFO, Bark: Thank you, guys.

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