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Bark, Inc. (BARK)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue exceeded guidance high end at $126.4M (+1.1% YoY) as Commerce grew 43.5% YoY; consolidated gross margin expanded 90 bps to 62.7% . Adjusted EBITDA improved $4.9M YoY to $(1.6)M as BARK chose to lean into marketing on attractive CAC; GAAP net loss was $(11.5)M, partly due to a prior-year debt extinguishment gain comp .
  • DTC declined 4.3% YoY to $106.1M on fewer orders amid platform migration, but new subscriptions rose ~11% YoY at lower CAC after moving paid media to Shopify; BARK Air contributed ~$2M revenue with positive gross profit seven months post-launch .
  • FY25 guidance reaffirmed (Revenue $490–$500M; Adj. EBITDA $1–$5M). Q4 FY25 outlook: Revenue $121.2–$131.2M; Adj. EBITDA $0.9–$4.9M; range reflects Commerce shipment timing into Q1 FY26 and flexible marketing spend .
  • Stock setup: ongoing EBITDA inflection and accelerating Commerce (Chewy/Amazon/international) are catalysts; wide Q4 range and DTC stabilization timeline (FY26) are watch items .

What Went Well and What Went Wrong

What Went Well

  • Commerce revenue +43.5% YoY to $20.3M, driven by new partners and expanded shelf/SKU with existing partners; management expects ~30% segment growth this year and faster in FY26 .
  • New subscription momentum and lower CAC post-Shopify migration: “highest quarter for new subscriptions in 3 years, up 11% YoY at a lower acquisition cost,” with 43% of checkouts via Shop Pay enhancing conversion .
  • Profitability progress: gross margin 62.7% (+90 bps YoY), 10th consecutive YoY Adj. EBITDA improvement, breakeven free cash flow “ZIP code” for the year, on track for first full-year positive Adj. EBITDA .

What Went Wrong

  • DTC revenue fell 4.3% YoY to $106.1M on fewer orders; platform migration and prior supply chain network revamp caused shipment delays impacting retention .
  • Net loss widened YoY to $(11.5)M (vs. $(10.1)M) largely because last year included a $1.8M debt extinguishment gain; operating expense mix included $2.4M warehouse restructuring costs in shipping & fulfillment .
  • Q4 outlook wide due to retail shelf reset timing; Commerce shipment pickups near quarter-end create visibility risk on whether volumes fall in Q4 or slip into Q1 FY26 .

Financial Results

MetricQ1 FY25Q2 FY25Q3 FY25
Revenue ($USD Millions)$116.2 $126.1 $126.4
Gross Margin %63.0% 60.4% 62.7%
Net Loss ($USD Millions)$(10.0) $(5.3) $(11.5)
Adjusted EBITDA ($USD Millions)$(1.8) $3.5 $(1.6)
Adjusted EBITDA Margin %(1.55)% 2.76% (1.23)%
DTC Revenue ($USD Millions)$107.1 $102.6 $106.1
Commerce Revenue ($USD Millions)$9.2 $23.5 $20.3

Segment gross profit detail:

SegmentQ1 FY25Q2 FY25Q3 FY25
DTC Revenue ($M)$107.1 $102.6 $106.1
DTC Cost of Revenue ($M)$38.1 $37.1 $35.8
DTC Gross Profit ($M)$69.0 $65.5 $70.3
Commerce Revenue ($M)$9.2 $23.5 $20.3
Commerce Cost of Revenue ($M)$4.9 $12.9 $11.4
Commerce Gross Profit ($M)$4.3 $10.6 $8.9

KPIs (DTC-focused unless noted):

KPIQ1 FY25Q2 FY25Q3 FY25
Total Orders (thousands)3,442 3,270 3,332
Average Order Value ($)30.94 30.91 31.25
DTC Gross Profit ($USD Thousands)69,270 65,504 70,154
DTC Gross Margin %65.1% 64.8% 67.4%

Notes:

  • Q3 cash & equivalents $115.3M; quarter buybacks $2.8M at $1.69 avg; YTD buybacks $8.0M at $1.54 avg .
  • Inventory $90.4M (+$6.2M vs Mar 31) to support expected FY26 sales .
  • Free cash flow Q3 $(2.0)M; YTD $(1.2)M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY25$490–$500M (11/7/24) $490–$500M (2/5/25) Maintained
Adjusted EBITDAFY25$1–$5M (11/7/24) $1–$5M (2/5/25) Maintained
Total RevenueQ4 FY25N/A$121.2–$131.2M (2/5/25) New
Adjusted EBITDAQ4 FY25N/A$0.9–$4.9M (2/5/25) New

Context:

  • Q3 FY25 guidance (given 11/7/24) was $123–$126M revenue and $(3)M to breakeven Adj. EBITDA; actuals: $126.4M revenue (above high end) and $(1.6)M Adj. EBITDA (midpoint of $(3)M to $0) .
  • Q4 range reflects shelf reset timing potentially shifting Commerce shipments into Q1 FY26 and variable marketing investment .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Shopify migration & marketing mix (move up-funnel)Began moving paid traffic; shifting from promo-heavy to full-funnel; expect ~60% GM in Q2 due to mix; early conversion/CAC benefits expected over time .All paid media moved in Oct; new subs +11% YoY at lower CAC; 43% checkouts via Shop Pay; continue migrating cohorts in Q4 .Improving conversion; sustainable CAC efficiency; DTC stabilization expected FY26 .
Commerce expansion (Chewy, Amazon, retail & international)Chewy launch, Amazon acceleration; Commerce +26% YoY in Q2; plan for ≥30% growth FY25 .Chewy expanded to 150+ SKUs; Amazon +70% YoY; intl expansion (Amazon EU, Fressnapf, Pets at Home). Expect ~30% growth FY25, faster in FY26 .Accelerating channel breadth and velocity.
BARK Air24 flights, $2.5M bookings since launch (Q1) .$2M revenue in Q3; positive gross profit; asset-light model; testing routes/pricing; democratize over time .Scaling from small base; strategic brand/awareness lever.
MarginsRecord 63.0% GM in Q1; Commerce GM mid-40s, DTC mid-60s .62.7% GM (+90 bps YoY); caution: mix to Commerce can lower consolidated GM, but contribution margins comparable .Stable high margins; contribution margin supports growth.
Supply chain & fulfillmentNetwork optimization and shipping improvements in-flight .$2.4M warehouse restructuring cost in Q3; excluding it, S&F down YoY; further optimization focus in FY26 .Ongoing efficiency work; transient costs in Q3.
Tariffs/macroWatching tariffs; toys most exposed; consumables domestic .Confident mitigating 10% tariffs via supplier productivity and scale; no material GM impact anticipated .Manageable headwind.

Management Commentary

  • CEO: “We achieved our strongest new subscription quarter in three years, grew commerce revenue by 43% year-over-year, and generated $2 million in revenue from BARK Air—just seven months after launch…We are Adjusted EBITDA positive through the first three quarters of fiscal 2025 and remain on track to achieve our first full year of positive Adjusted EBITDA next month.” .
  • CEO on Shopify and CAC: “New subscriptions grew 11% year-over-year, and we achieved this at a lower customer acquisition cost…43% of the checkouts on the Shopify platform last quarter were via Shop Pay.” .
  • CFO on profitability/mix: “Consolidated gross margin was 62.7%, up 90 bps versus last year…as commerce becomes a larger part of our revenue mix, it will naturally weigh on consolidated gross margin. However, the contribution margins are comparable across both segments.” .
  • CFO on Q4 guidance variability: “Shelf resets…in the March, April time frame…exact timing of retailer shipments…can have a meaningful impact on the quarter.” .
  • CFO on tariffs: “We do not anticipate any material impact on our gross margins.” .

Q&A Highlights

  • DTC trajectory: Management reiterated DTC stabilization in FY26; near-term growth skew from Commerce and BARK Air while DTC optimizes on Shopify and moves up-funnel .
  • BARK Air strategic outlook: Too early to size as a material driver; asset-light model will continue; testing routes, plane formats, and lower price points (e.g., $1,000 NY–FL flights) to expand demand .
  • Q4 visibility: Retail shelf resets drive shipment timing uncertainty; order pickups around quarter-end can pull revenue into Q1 FY26 .
  • Chewy and marketplace traction: Chewy SKUs expanded rapidly (30 → 150+); one of largest toy suppliers on Chewy; Amazon +70% YoY with strong partner feedback .
  • CAC/Shopify: Conversion-driven CAC efficiency from Shopify; reinvesting savings into mid/upper funnel awareness to compound LT growth .

Estimates Context

  • S&P Global consensus estimates were unavailable at time of request due to provider rate limits. As a result, we cannot present definitive “vs. Street” comparisons for revenue or EPS this quarter. Values would ordinarily be retrieved from S&P Global (Capital IQ); unavailable at time of analysis.
  • Proxy indicators: Company revenue exceeded its own guidance high end ($126.4M vs $123.0–$126.0M) and Adj. EBITDA landed at the midpoint of guidance (range $(3.0)M to breakeven) .
  • Implication: Estimate revisions likely skew positive for Commerce growth and gross margin sustainability, and reflect a wider Q4 range on shipment timing and flexible marketing investment .

Key Takeaways for Investors

  • Commerce flywheel is accelerating (Chewy, Amazon, international), underpinning top-line momentum into FY26; management targets ~30% Commerce growth in FY25 with faster in FY26 .
  • DTC is rebuilding on Shopify with improved conversion/CAC and rising new subs; expect stabilization in FY26 as cohorts migrate and upper-funnel investments compound .
  • Profitability trajectory intact: 10th straight YoY Adj. EBITDA improvement; comparable contribution margins across DTC/Commerce support mix shift without compromising profitability .
  • BARK Air is a small but strategic growth and brand lever with positive gross profit and $2M Q3 revenue; optional upside as routes/pricing scale under asset-light model .
  • Q4 setup includes execution risk from retail shelf reset timing and marketing flex; monitor shipment phasing commentary and any update on Q4 mix .
  • Balance sheet provides flexibility (Q3 cash ~$115M); opportunistic buybacks ongoing (Q3: $2.8M at $1.69; YTD $8.0M at $1.54) .
  • Tariffs appear manageable (toys exposure offset by consumables, supplier productivity, and scale); management does not foresee material GM impact .

Appendix: Additional Detail

  • Disaggregation: DTC $106.1M (toys & accessories $64.3M; consumables $39.8M; other/BARK Air $2.0M); Commerce $20.3M .
  • Operating expenses: Advertising/marketing $27.4M (up vs. $25.1M on higher new subs); G&A $64.1M (down vs. $66.1M on headcount) .
  • Cash flow: Q3 CFO $(1.4)M and FCF $(2.0)M; YTD CFO $3.2M and FCF $(1.2)M .

All figures are from company filings and earnings materials as cited.