BARK, Inc. Q2 FY2026 earnings call

Management Statement and Operational Highlights:

• Paid off $45 million convertible note using cash from balance sheet, now debt-free; extended $35 million credit line with Western Alliance Bank.
• Total revenue for the second quarter was $107 million, above the high end of guidance range; adjusted EBITDA of negative $1.4 million within guidance range.
• Commerce segment had strong quarter with $24.8 million revenue, up 6% year over year and 24% of total revenue.
• BARK Air exceeded expectations with $3.6 million revenue, up over 138% year over year and 54% quarter over quarter, maintaining 99% five-star review rate.
• Moved last-mile delivery to Amazon, reducing costs and improving customer experience.
• Lowest customer acquisition cost since fiscal 2023; launched subscriber perks for exclusive discounts.
• Acquired more new subscribers than planned at efficient rate, with subscribers retaining longer.

Segment Performance:

• Commerce segment: Generated $24.8 million in revenue, up 6% year over year and representing 24% of total revenue, an all-time high revenue mix contribution.
• BARK Air: Delivered $3.6 million in revenue this quarter, up more than 138% from last year and 54% from the prior quarter.

Guidance:

• For fiscal third quarter, expect total revenue between $101 million and $104 million and adjusted EBITDA between negative $5 million and negative $1 million.
• Continue to maintain cautious stance due to external variables like supplier transitions and tariff developments; goal remains to be EBITDA positive for the full year.

Risks:

• Volatile macro environment.
• Tariffs and related costs.
• Uncertainty from supplier transitions and consumer sentiment.

Q: Congrats on getting the convertible debt paid off. What kind of flexibility does it provide?

A: Matt Meeker said they ended the quarter with $63M in cash, paid off $45M, and can keep executing the plan, reinvesting into growth while being cautious due to external environment.

Q: Circling back to full-year profitability commentary. What's the confidence in full-year profitability?

A: Zahir M. Ibrahim said the goal is still to be EBITDA positive, expecting to be in that range but with volatility in tariffs and consumer sentiment.

Q: Unpack commerce growth. What's driving it?

A: Zahir M. Ibrahim said it's a combination of expanding toy distribution with existing customers like Walmart, growth on Amazon and Chewy, and slight timing benefit.

Q: Talk about drivers of acquiring more new subscribers at efficient cost and retention. Any specific media channels?

A: Matt Meeker said there's a favorable mix on organic channels like email and SMS, shifted away from meta and Google channels. On retention, improved over months with higher quality customers opting for higher AOV plans.

Q: Areas of investment now that balance sheet is different? Thoughts on buybacks?

A: Matt Meeker said they'll continue executing the plan to aim for EBITDA breakeven, focusing on diversification, and will meet with board next week to discuss long-range plan and capital plans.