Earnings call transcript: BARK Q1 2025 reports revenue beat, stock dips

BARK Inc. announced its Q1 2025 earnings, revealing a revenue of $102.9 million, surpassing forecasts of $99-$101 million. However, the company reported an earnings per share (EPS) of -$0.02, slightly missing the forecast of -$0.01. Despite the revenue beat, BARK’s stock experienced a pre-market decline of 0.23%, with the price dropping to $0.853. According to InvestingPro data, the company maintains impressive gross profit margins of 62.37% and holds more cash than debt on its balance sheet, demonstrating financial resilience despite current market challenges.

Key Takeaways

• BARK’s total revenue exceeded guidance, reaching $102.9 million.
• Direct-to-Consumer (D2C) revenue was strong at $89.2 million.
• Stock price fell by 4.8% despite revenue growth.
• The company ended the quarter with $85 million in cash.
• New product lines and retail partnerships are expanding.

Company Performance

BARK demonstrated robust performance in the first quarter, with total revenue exceeding expectations. The company’s focus on Direct-to-Consumer sales paid off, contributing significantly to the overall revenue. The Commerce segment also showed promising growth, with a year-over-year increase of 50%. BARK’s strategic shift towards higher-quality customers and cost reduction in marketing and operations has begun to show positive results.

Financial Highlights

• Revenue: $102.9 million, exceeding guidance.
• D2C revenue: $89.2 million.
• Commerce revenue: $14 million, up 50% year-over-year.
• Bark Air revenue: $2.3 million, a 300% improvement from last year.
• Gross margin: 62.3%.
• Positive adjusted EBITDA: $100,000.
• Cash on hand: $85 million.

Earnings vs. Forecast

BARK reported an EPS of -$0.02, slightly missing the forecast of -$0.01, resulting in a 100% negative surprise. Revenue, however, exceeded expectations with a 3.28% surprise. This mixed performance highlights the challenges BARK faces in balancing profitability with growth.

Market Reaction

Despite the revenue beat, BARK’s stock price fell by 4.8% to $0.853 in pre-market trading. The stock remains near its 52-week low of $0.77, reflecting investor caution. InvestingPro analysis suggests the stock is currently undervalued, with a beta of 1.88 indicating higher volatility than the market average. The decline suggests that investors may be concerned about the company’s profitability and future guidance. InvestingPro subscribers have access to 15+ additional exclusive insights about BARK’s valuation and market position.

Outlook & Guidance

For Q2, BARK expects revenue between $102-$105 million and adjusted EBITDA ranging from -$2 million to +$2 million. The company did not provide full-year guidance, citing macroeconomic uncertainties. BARK aims to continue expanding its retail partnerships and product lines, with Commerce expected to represent 25-30% of Q2 revenue. InvestingPro’s comprehensive research report, available for over 1,400 US stocks including BARK, provides detailed analysis of the company’s growth prospects and financial health metrics, including its strong current ratio of 1.63, indicating solid short-term liquidity.

Executive Commentary

CEO Matt Meeker emphasized BARK’s innovative approach: "Whether it’s in the box, in the air, or in the belly, we’re building BARK to show up in new ways across new channels." CFO Zahir Ebrahim highlighted progress: "We’re seeing solid traction in both Commerce and Barcare."

Risks and Challenges

• Profitability concerns, as indicated by the negative EPS.
• Macroeconomic uncertainties impacting consumer spending.
• Competitive pressures in the pet care market.
• Dependence on retail partnerships for revenue growth.
• Potential challenges in scaling new product lines.

Q&A

Analysts inquired about BARK’s subscriber acquisition strategies and revenue diversification efforts. The company clarified its EBITDA guidance range and discussed factors influencing its financial outlook, emphasizing a focus on sustainable growth and innovation.

Full transcript - BARK Inc (BARK) Q1 2026:

Karen, Conference Operator: Thank you for standing by. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bork First Quarter Fiscal Year twenty twenty six Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After today’s presentation, there will be an opportunity to ask questions.

I will now turn the call over to Mike Muges, VP of IR. Please go ahead.

Mike Muges, VP of Investor Relations, Bark: Good morning, everyone, and welcome to Barq’s first quarter fiscal year twenty twenty six earnings call. Joining me today are Matt Meeker, Co Founder and Chief Executive Officer and Zahir Ebrahim, Chief Financial Officer. Today’s conference call is being webcast in its entirety on our website, and a replay of the webcast will be available shortly after the call. Additionally, a press release covering the company’s financial results was issued this morning and can be found on our Investor Relations website. Before I pass it over to Matt, I want to remind you of the following information regarding forward looking statements.

The statements made on today’s call are based on management’s current expectations and are subject to risks and uncertainties that could cause actual future results and outcomes to differ. Please refer to our SEC filings for more information on some of the factors that could affect our future results and outcomes. We will also discuss certain non GAAP financial measures on today’s call. Reconciliation of our non GAAP financial measures is also contained in this morning’s press release. And with that, let me now pass it over to Matt.

Matt Meeker, Co-Founder and Chief Executive Officer, Bark: Thanks, Mike, and good morning, everyone. On our last earnings call, following our first full year of positive adjusted EBITDA, I laid out two key priorities for fiscal twenty twenty six remain adjusted EBITDA positive despite macro uncertainty and accelerate diversification beyond subscription boxes. On both fronts, we’re off to a strong start. We delivered $103,000,000 of revenue, well above our guidance, with over $16,000,000 coming from non D2C sources, which is nearly double from last year. And we’ve delivered positive adjusted EBITDA for the quarter, improving by nearly $2,000,000 from last year.

In D2C, we delivered $89,200,000 in revenue. Dollars 2,300,000.0 of that came from Bark Air, a 300% improvement from last year and our first quarter breaking the $2,000,000 mark. More importantly, we maintained a ninety nine percent five star rating, our clear signal that we’re solving a real problem for dog parents around the world. This is still an early stage business, but the demand is real, the experience is resonating and the team is performing well. The bulk of the D2C business was driven by our subscription business, which saw strong new subscriber acquisition and lower marketing spend and better than expected retention.

One of the most notable shifts this quarter was in product mix. Last year, about twothree of new customers chose BarkBox over SuperTure. This quarter, that ratio flipped, with SuperTure accounting for roughly twothree of new subscribers. The higher price associated with that product was also a tailwind to both average order value and D2C gross margin, which came in at 67%, up two fifty basis points year over year and our strongest D2C margin quarter ever. That’s one way we can grow AOV and margin in D2C.

But the far bigger opportunity is in cross selling our customers. Now that we’re fully on the Shopify platform with our new line of consumables coming in a few weeks, cross sell revenue should be an important driver of revenue, AOV and margin growth going forward for years to come. I’m also excited to announce that we introduced a new brand platform last month. Spark is now co owned by DOGS. This isn’t just a one off campaign.

It’s a long term initiative to grow awareness, deepen the emotional connection we have with our customers, and reinforce our position as the world’s most dog centric company. It launched with updated company visuals, added subscriber perks, and even our first ever chair dog, a real dog in a real leadership role representing the voice of dogs everywhere. We kicked it off last month across social and blog channels, and there’s more coming as we approach National Dog Day in August. Speaking of National Dog Day, we’ll also debut our new consumables line, Bark in the Belly. This initiative is important for two reasons.

First, it unifies the look and feel of our entire consumables line, which is especially important as we expand in retail and continue building brand recognition across aisles domestically and internationally. And second, it gives us a powerful mission driven hook. All profits from our kettle line will go to feeding dogs in need. The idea is simple. If you can buy healthy and affordable food for your dog and help feed other dogs at the same time, we believe that’s a compelling reason to choose Bark.

And just to clarify, the donations will apply to only our kibble line, not treats, dental, toys, or other consumables. We’re excited about what Bark in the Belly can become, not just as a product line, but as another way we live out our mission to make all dogs happy. This line will go live in a few weeks and will be available on bark.co as well as Chewy and Amazon. We also anticipate a mix of these products to begin making their way onto brick and mortar shelves in the spring of next year when most of our retail partners do their shelf resets. On that note, our commerce or retail business remains a big growth driver for us this quarter.

Revenue came in at approximately $14,000,000 up almost 50% year over year as we continue to expand our retail footprint, both in store and online across partners like Walmart, Costco, Target, TJX, Chewy, and Amazon. This is a strong start to the year. As we move through fiscal twenty twenty six and beyond, our long term strategy is becoming more tangible and more scalable. Whether it’s in the box, in the air, or in the belly, we’re building BART to show up in new ways across new channels and for more dog parents than ever before. Each of these businesses reinforces the others.

They deepen our brand, expand our reach, and unlock new ways to deliver on our mission to make all dogs happy. Finally, delivering another quarter of positive adjusted EBITDA, even in a challenging environment, shows that the structural improvements we’ve made over the past few years are holding. Our supply chain team responded to the unpredictable tariff environment, and we’ve come away with better costs and more diversification to handle further changes. We should see those results showing up at the back half of the year in a meaningful way. This all gives us confidence we’ll build on our revenue from this quarter going forward, and we’re on track to be adjusted EBITDA positive for the full year and beyond.

And with that, I’ll hand it over to Zahir.

Zahir Ebrahim, Chief Financial Officer, Bark: Thanks, Matt, and good morning, everyone. Fiscal twenty twenty six is off to a solid start, driven by better than expected subscription growth, disciplined marketing spend and nearly 50% year over year growth in our Commerce segment. Most importantly, we delivered another quarter of positive adjusted EBITDA, a key milestone given ongoing macro uncertainty and tariff volatility. Let me walk through the quarter in more detail. Total revenue for the first quarter was $102,900,000 exceeding our guidance range of 99,000,000 to $101,000,000 and driven by a stronger performance across both our B2C and Commerce segments.

Excluding Air, our B2C segment delivered $86,800,000 in revenue, slightly ahead of expectations, largely due to higher than anticipated new subscriber additions and stronger order volume as a result. Additionally, the majority of these new subscribers opted for our more premium Superture offering, which should benefit AOV for the remainder of the year. We achieved this growth while reducing DTC marketing spend by 38% year over year. As Matt mentioned, we’ve made a strategic pivot away from promotional and discount driven acquisition and toward higher value, longer retaining customers. This approach is improving customer quality and margin while enabling us to redirect investment toward our broader goal of revenue diversification, bringing more products to more customers across more channels.

Speaking of revenue diversification, our Commerce segment delivered 13,700,000 in the quarter, a 50% increase year over year. Growth in this segment was supported by expanded distribution with Amazon and newer partners like Chewy and increased shelf presence at retailers like Costco, Walmart and QJX. While quarterly performance can be influenced by retailer intake timing, we’re encouraged by the momentum and expect continued growth as we scale these relationships and launch our bark in the belly consumables line. These products will launch on our website in the next month, followed by availability on Amazon and Chewy by the end of the calendar year. From there, we anticipate expanded brick and mortar distribution aligned with retailer shelf resets in the next fiscal year.

And lastly, Barcare delivered $2,300,000 in revenue, our strongest quarter to date. Though still early, the business continues to validate demand for premium dog travel and services, and we’re excited about its long term potential as we expand destinations and introduce new complementary offerings. Moving on, consolidated gross margin for the quarter was 62.3%, which was impacted by certain onetime items in our Commerce segment, which I’ll touch upon in a moment. Nonetheless, B2C gross margin, excluding Barcare, was a record 69.3%, up over 400 basis points year over year. This improvement was driven by product mix and proactive cost reductions in response to tariffs.

Commerce gross margin came in at 31.7%. Margin this quarter was impacted by the opportunistic sell through of legacy and surplus inventory to discount retailers, as well as from higher tariffs on seasonal products, some of which came in at the 145% tariff rate. We expect gross margins in this segment to return to the low to mid 40% range moving forward. Turning to operating expenses. Marketing expense was $15,200,000 down 25% versus last year as we intentionally reduced spend in our subscription box business amidst ongoing macro volatility and to free up resources for diversification initiatives.

Overall, we expect our full year marketing spend to be down between 20% to 25% versus fiscal twenty twenty five. Shipping and fulfillment expense was €31,800,000 an 8% decline year over year, primarily due to lower DTC volume versus the prior year. General and administrative expense was €25,500,000 down 12%, reflecting lower headcount entering the year and continued cost discipline. As a result of the structural improvements we’ve made throughout the business, we were able to deliver positive adjusted EBITDA of $100,000 modest but important given the softer top line and external headwinds. We ended the quarter with $85,000,000 in cash, down $9,000,000 from Q4.

This reflects inventory build under temporarily reduced tariffs and $1,800,000 in share repurchases in the quarter. We expect the inventory build to continue into Q2 as we prepare for holiday demand. Turning to guidance. Given the continued uncertainty surrounding tariffs, trade policy and broader consumer trends, we’re maintaining a cautious stance on forward looking guidance. While we remain confident in our strategy and execution, several external variables remain fluid, including supplier transitions and the evolving tariff environment.

As such, we are not providing full year guidance at this time. We’ll continue to monitor conditions closely and provide updates as visibility improves. For the second quarter, we expect total revenues between $102,000,000 and $105,000,000 and an adjusted EBITDA between negative $2,000,000 and positive $2,000,000 We also expect a heavier commerce quarter relative to Q1. Timing shifts are always possible, but we currently expect commerce to represent 25% to 30% of the revenue in Q2. In summary, Q1 was a solid start to the year.

Revenue came in ahead of expectations. We delivered another quarter of positive adjusted EBITDA, and we’re seeing solid traction in both Commerce and Barcare. While macro conditions remain dynamic, we entered the fiscal year with stronger fundamentals, a more flexible operating model and a clear focus on profitable diversified growth. And with that, I’ll turn the call over to the operator for Q and A.

Karen, Conference Operator: The first question comes from Ryan Meyers from Lake Street Capital Markets. Line is open.

Ryan Meyers, Analyst, Lake Street Capital Markets: Hey guys, thanks for taking my questions. First one for me, if we think about the EBITDA guidance for the second quarter, obviously a loss $2,000,000 to a positive $2,000,000 kind of wide range there. Just curious what kind of puts you at the low end of the range? What potentially puts you at the high end of that range?

Zahir Ebrahim, Chief Financial Officer, Bark: Ryan. Good morning. This is Zahir. Look, the midpoint of the guidance is in line with q one. So we feel pretty good about the overall guidance range.

A lot of it’s to do with timing. So tariff flow through timing, coupled with some timing on operating expenses, could swing the overall profit performance and hence the broader range.

Ryan Meyers, Analyst, Lake Street Capital Markets: Got it. And then if we think about the $5,000,000 step down in G and Maybe provide us with some color of what you guys were able to do here and then maybe how we should be thinking about that number going forward to the balance of the rest of the year.

Zahir Ebrahim, Chief Financial Officer, Bark: Yeah. On G and A, we’ve been making good progress over the past eighteen to twenty four months, basically evolving, the structure of the business to the needs of the business and the scale of the business. We’ve been working pretty diligently on all areas of spend, so consultancy, professional services included. So those are some of the main drivers of what we’ve seen. Q1, there was a small amount of timing benefit that we’ll see play through in Q2 and Q3.

But overall, where we landed was a strong place. Would say for the balance of the year, slightly elevated to what you saw in Q1, but broadly in that range.

Ryan Meyers, Analyst, Lake Street Capital Markets: Okay. That’s helpful. Thanks for taking my questions. The

Karen, Conference Operator: next question comes from Maria Ripps from Canaccord. Your line is open.

Maria Ripps, Analyst, Canaccord: Great. Good morning and thanks for taking my questions. Can you maybe give us a little bit more color on what drove stronger subscriber trends in Q1, especially on low advertising spend? And are you seeing sort of that momentum continuing here into fiscal q two?

Matt Meeker, Co-Founder and Chief Executive Officer, Bark: Hey, Maria. It’s Matt here. I I think what drove that is just ongoing experimentation with, different different ad formats, different concepts, different ways of trying to attract the customer, and there’s a been a real focus by us on getting a higher quality customer. One way that we talked about that that played out was a a pretty dramatic shift over to superturer customers, which at a base level have a average order value that’s about $5 per unit higher. That’s one way.

We’re also looking for subscribers to prepay for their subscriptions upfront, and we’ve made good progress there to to respond to some of the upsell or cross sell offers that we’ve that we’ve made and certainly made some of some progress there in terms of the, the initial purchase that they’re making and their initial commitment. So we knew we were focused more on, on the side of higher quality subscribers and spending less to acquire those. And when we pulled back, we expected more of a pullback in terms of the volume, and we just outperformed that. So pretty happy about that. The momentum and the learning continues, but as we’re learning sometimes, you know, it doesn’t always go well, but so far so good.

Maria Ripps, Analyst, Canaccord: Great. That’s very helpful. And then how should we think about sort of revenue contribution in the back half of the year from some of the revenue diversification sort of initiatives that you that you talked about?

Matt Meeker, Co-Founder and Chief Executive Officer, Bark: You know, we we’ve again, for the last year and a half, I believe, have set out to say that we want com our commerce business to represent a third or over 30% of our our overall revenue within a couple of years. You saw another leap forward in that, in that contribution this quarter. And so we’re I’d say we’re on path for that to to happen. So that diversification from a channel perspective makes sense or or continues and and and gets better and better by by the quarter. The Bark Air contribution last year was over 1% of revenue in its first year.

It was a partial year. We’re building momentum. As Tahir mentioned, we’re also following the customer and discovering new opportunities and services that are extensions of Barcare. So not only extending the revenue, but extending to high margin revenue there as well Instead of 1% of the total revenue, I would think this year would be more in the two to 3% range. It’s it’s still small, but getting bigger and not unexpected for something in its second year.

And then last but not least, I mentioned on the call that we’re making this move into or or launching a new line of consumables in a few weeks here. And it’s been a long time coming, but we’re really excited that we’ve got a full line, the bark in the belly line coming out, and it’s coming out on our Shopify platform, which was also a long time coming. But it gives us the ability to to credibly cross sell that, and the customer can put all of our products into one cart and check out as well as featuring that on our Amazon and Chewy platforms or with our partners there. So with that, you get some product diversification, and you get some channel diversification. So that’s a very long winded way of saying, what I said at the top.

Two priorities this year, remain EBITDA positive and continue forward on revenue diversification and and feel very good about the start and our prospects for that.

Maria Ripps, Analyst, Canaccord: That’s that’s very helpful. Thanks for the call.

Karen, Conference Operator: That concludes our q and a session. Ladies and gentlemen, this concludes today’s call. Thank you all for joining and you may now disconnect.

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