BARK — Fiscal First Quarter 2027 Earnings Summary

Financial Performance

• Total revenue was $78.8 million, a 23.4% decrease year-over-year from $102.9 million, landing at the high end of the guidance range ($77.0 million to $79.0 million).
• Gross profit was $57.3 million compared to $64.1 million in the prior year; reported gross margin was 72.7% versus 62.3% previously.
• Normalized consolidated gross margin (excluding a one-time $7.4 million tariff refund benefit) was 63.4%, compared to a record 63.8% in the prior year period.
• Net income was $0.75 million, a turnaround from a net loss of $7.0 million in the prior year; results included $7.4 million of tariff refunds allocable to fiscal 2026.
• Adjusted EBITDA was $0.6 million, within the guidance range of $0.0 million to $1.0 million, up from $0.1 million in the prior year.
• Net cash used in operating activities was $(3.5) million, compared to $(5.4) million in the prior year.
• Free cash flow was $(3.7) million (calculated as net cash used in operating activities of $(3.5) million less capital expenditures of $0.1 million).
• Advertising and marketing expenses decreased to $9.5 million from $15.2 million; General and administrative expenses decreased to $47.8 million from $57.3 million.
• Cash and cash equivalents were $16.1 million as of June 30, 2026, down from $19.3 million as of March 31, 2026.
• Inventory balance was $72.4 million, a $25.7 million decrease compared to the prior year.

Guidance and Future Outlook

• For the second quarter of fiscal 2027, total revenue is expected to be $83.0 million to $85.0 million, compared to $107.0 million in the comparable period last year.
• Q2 fiscal 2027 Adjusted EBITDA is expected to be $1.0 million to $3.0 million, compared to a loss of $(1.4) million in the prior year.
• For the full year of fiscal 2027, total revenue is reiterated at $325.0 million to $340.0 million, compared to $394.8 million in fiscal 2026.
• Full-year fiscal 2027 Adjusted EBITDA is reiterated at $7.0 million to $10.0 million, compared to $0.2 million in fiscal 2026.
• The year-over-year revenue decline is attributed to a smaller DTC subscriber base following a deliberate pullback of marketing spend in fiscal 2026.
• Commerce and BARK Air are expected to collectively represent over $100 million of revenue for the full year, with Commerce growing as a percentage of total revenue.
• The company does not provide guidance for Net Income (Loss) due to the uncertainty of stock-based compensation and related tax effects.

Business Segments and Product Lines

• Direct to Consumer (DTC) revenue was $66.7 million, a 25.2% decrease year-over-year.
• DTC performance included $3.2 million in revenue from BARK Air, representing a 37% year-over-year increase.
• Commerce revenue was $12.1 million, an 11.4% decrease year-over-year, with momentum remaining strong across wholesale and marketplace channels.
• DTC Subscriber Retention improved by more than 170 basis points to 92.8% from 91.1% in the prior year.
• DTC Average Order Value (AOV) increased by $0.45 to $31.25 from $30.80 in the prior year.
• DTC Gross Margin was 79.4%, up from 69.3% in the prior year, including a $5.2 million tariff refund benefit.
• The company is building a more diversified business across DTC, Commerce, and BARK Air, with new products and partnerships expected to launch in the fall.

Market and Competitive Landscape

• The company continues to expand its retail partner network, including Target, Chewy, and Amazon.
• The company focuses on prioritizing bottom-line durability over near-term growth.
• Subscriber lifetime value reached its highest level since the company became a public company.

Risks and Challenges

• Actual results may differ materially from forward-looking statements due to risks including uncertainty of projected financial information, potential variability in spending on pets, and customer spending levels.
• Risks include the company's ability to convert social media followers into customers, successfully expand product lines and distribution channels, and competition.
• Global or macroeconomic events, particularly the imposition of tariffs, are cited as potential factors affecting operating results.
• Stock-based compensation and related tax effects create significant variability between Net Income (Loss) and Adjusted EBITDA.

Management Commentary and Tone

• CEO Matt Meeker described the quarter as a "strong start to fiscal 2027" reflecting "improving health across the business."
• Management expressed confidence in the ability to "accelerate growth and deliver a meaningful step-up in Adjusted EBITDA and cash flow this year."
• The tone emphasizes a strategic shift toward "bottom-line durability" and building a "stronger, more diversified BARK."

Other Key Points

• The company remains debt-free.
• BARK continued repurchasing shares under its $40 million share repurchase program, with payments of $0.2 million during the quarter.
• Treasury stock increased to 888,074 shares from 865,161 shares.
• The company excludes the one-time tariff refund benefit from Adjusted EBITDA calculations.
• A conference call to discuss results was held on August 6, 2026, at 4:30 p.m. ET.