BARK, Inc. Q4 FY2025 earnings call

• Delivered first-ever adjusted EBITDA positive year, with Q4 at $5.2 million and full year at $5.4 million.
• Intend to remain adjusted EBITDA positive this year and beyond.
• Accelerate revenue diversification faster than previously planned.
• Commerce segment grew 27% y/y to $68.3 million in full year, with expanded retail partnerships and margin expansion.
• Made updates to customer experience to save costs and enhance experience.
• Supply chain team has mitigation plans for tariffs, with toy product tariffs expected to decrease in back half of year.
• Shift investment dollars more rapidly into new product lines, distribution channels, and services.
• BARK Air launched one year ago, delivered nearly $1 million in revenue in first year.

Commerce segment grew 27% year over year to $68.3 million in the full year, accounting for 14% of total revenue in fiscal 2025. BARK Air, a bright spot, delivered nearly $6 million in full-year revenue. Q4 adjusted EBITDA was $5.2 million, and full-year adjusted EBITDA was $5.4 million. Consolidated gross margin in Q4 was 63.6%, and for the full year, it was 62.4%, an improvement from prior years.

• Expect Q1 2026 total revenue between $99 million to $101 million, down 14% at midpoint vs last year.
• Anticipate adjusted EBITDA for Q1 between minus $1 million and positive $1 million, midpoint reflecting $1.8 million improvement vs last year.
• Unable to provide full-year guidance at this time due to macro volatility and changing tariff landscape, will monitor environment closely and provide updates as conditions evolve.

• Supplier transitions of magnitude carry risk.
• Key variables like future tariff actions, trade policy, inflation, and consumer response remain outside of control.

Q: Give more color on diversifying supply base outside of China, including countries considered and incremental expenses?

A: Considering alternative geographies for manufacturing, flexibility to manufacture all toys outside China by end of fiscal year, extent depends on tariff rate movement.

Q: Update on progress migrating to Shopify platform, conversion rates, and core KPIs?

A: Migration mostly complete, active and new subscribers come through bark.co, performance in new customer acquisition and conversion decent, still learning curve but accelerating.

Q: Dynamic in DTC business, why pull back marketing spend and diversify out of DTC?

A: Consumer sentiment fell off, tariff noise increased, discretionary product vulnerability, recognition of not actively acquiring unprofitable customers, need to diversify from discretionary product line.

Q: Impact on commerce segment in Q1, demand changes?

A: Commerce demand strong, but Q4 and Q1 saw pullback in order placement due to tariff noise, expect commerce to grow similar to fiscal 2025 level in future, with acceleration beyond fiscal 2026.

Q: Cash perspective, share buybacks, and cost structure?

A: Been aggressive on share buybacks, need to manage cash carefully, dry powder available for opportunities, including new category investments and potential M&A.

Q: Conversations with retailers since tariff rate came down, backlog of pullback, and new retail partnerships?

A: Temporary slowdown in order placement due to tariff noise, demand and order placement returning as tariffs came down, positive traction with existing customers and new conversations for consumables launch.