BARK — Fiscal Second Quarter 2027 Earnings Summary

Financial Performance:

• Net revenue for the quarter ended September 30, 2026, was $87.6 million, exceeding the guidance range of $83.0 million to $85.0 million; this represents a decrease from $107.0 million in the prior-year period.
• Net loss improved to $3.8 million ($0.43 per share) compared to a net loss of $10.7 million ($1.25 per share) in the prior-year period.
• Adjusted EBITDA was $2.0 million, a $3.4 million improvement from a loss of $1.4 million in the prior-year period, landing within the guidance range of $1.0 million to $3.0 million.
• Gross profit was $51.6 million compared to $62.0 million in the prior-year period; gross margin increased approximately 100 basis points to 58.9% of net revenue.
• Cash and cash equivalents totaled $19.0 million as of September 30, 2026, an increase of $2.9 million sequentially from $16.1 million as of June 30, 2026.
• Net cash provided by operating activities was $4.7 million for the quarter.
• Inventory was $72.4 million as of September 30, 2026, unchanged from June 30, 2026.
• There was no outstanding debt as of September 30, 2026.
• Deferred revenue was $17.6 million as of September 30, 2026, down from $22.2 million as of March 31, 2026.

Guidance and Future Outlook:

• The Company reaffirmed full-year fiscal 2027 guidance: total net revenue expected between $325.0 million and $340.0 million, and Adjusted EBITDA expected between $7.0 million and $10.0 million.
• Fiscal third quarter 2027 guidance expects net revenue between $88.0 million and $92.0 million and Adjusted EBITDA between $1.0 million and $3.0 million.
• The Company does not provide guidance for Net Income (Loss) due to the uncertainty of stock-based compensation and tax effects.
• Management expects to decrease inventory in the second half of fiscal year 2027 to free up cash.

Business Segments and Product Lines:

• Commerce net revenue was $25.7 million, an increase of 3.6% year-over-year from $24.8 million, representing 29.4% of total net revenue; growth was driven by strength across retail and marketplaces.
• Direct-to-Consumer (DTC) net revenue was $61.8 million, a decrease from $82.1 million in the prior-year period, representing 70.6% of total net revenue.
• DTC subscriber retention improved to 94% from 92% in the prior-year period.
• DTC Average Order Value (AOV) increased to $31.40 from $30.87 in the prior-year period.
• DTC revenue included $3.5 million from BARK Air.
• The Company launched Licksters, a new line of enrichment toys.
• The Company shipped two of the largest retail orders in its history during the fiscal third quarter.

Market and Competitive Landscape:

• The year-over-year revenue decline was primarily due to a planned pullback in marketing spend and a resulting smaller DTC subscriber base, partially offset by Commerce growth.
• The Company continues to expand with new and existing retail partners.

Risks and Challenges:

• The proposed transaction to sell BARK Air's assets and license the brand is subject to definitive documentation and completion is not assured.
• Forward-looking statements involve risks including uncertainty of projected financial information, potential decreases in pet spending, inability to convert social media followers to customers, and competition.
• Risks include the uncertain effects of global or macroeconomic events, specifically the imposition of tariffs.
• Actual results may differ materially from forward-looking statements due to factors such as stock-based compensation variability and tax effects.

Management Commentary and Tone:

• CEO Matt Meeker described the quarter as "strong," citing revenue above the high end of guidance and progress on annual priorities.
• Management highlighted the efficiency of marketing dollars and the improvement in the underlying quality of the subscriber base.
• Management stated the business remains on the "right long-term trajectory" and that the potential BARK Air arrangement would allow capital redirection to Commerce, the partnership pipeline, supply chain, and innovative products.

Other Key Points:

• Subsequent to the quarter end, BARK reached a preliminary understanding to sell BARK Air's assets and license the brand beginning January 1, 2027.
• The Company executed $2.0 million in share repurchases during the quarter.
• Total orders for the quarter were 1,858 thousand, down from 2,544 thousand in the prior-year period.
• The Company reported a $5.2 million tariff refund related to fiscal year 2026 included in the six-month Direct-to-Consumer gross margin.
• Litigation expenses for the quarter were $1.1 million, related to a shareholder class action complaint.
• Warehouse restructuring costs were $0.4 million for the quarter.