BARK, Inc. Q2 FY2025 earnings call

• Fiscal second quarter revenue of $126.1M, first Y-O-Y growth in 8 quarters. • Commerce segment grew 26% YOY, driven by new partners (Chewy, Fressnapf) and existing partners (Costco, T.J. Maxx, Amazon); top-selling new treat brand in Target and PetSmart. • Consolidated gross margin 60.4% in the quarter. • Adjusted EBITDA $3.5M in the quarter, strongest EBITDA quarter in company history; positive free cash flow $1M. • DTC segment has four consecutive quarters of Y-O-Y new subscriber growth; transitioning to Shopify-based platform bark.co. • BARK Air flown 50 flights, booked over $4.5M in ticket sales, $1.5M revenue last quarter, positive gross profit. • Partnerships: Girl Scouts partnership, Pet Crocs collaboration with Crocs, expansion with Chewy, Amazon, etc.

Total revenue in the quarter was $126.1 million, a 2.5% increase vs last year. DTC segment contributed $102.6 million (including $1.5 million from BARK Air), down 1.6% YOY; DTC gross margin (excluding BARK Air) was 65%, in line with last year. Commerce segment generated $23.5 million last quarter, a 25.6% increase YOY; commerce gross margin was 45%, up 250 basis points YOY. For full year, commerce segment expected to grow at least 30% vs Fiscal '24, contributing 18.6% of revenue this quarter.

• Full year: Total revenue $490M - $500M (flat to 2% Y-O-Y growth); adjusted EBITDA $1M - $5M (first EBITDA positive year). • Fiscal third quarter: Total revenue $123M - $126M (midpoint in line with last year); commerce segment expected 15%-17% of total revenue; adjusted EBITDA range breakeven to -$3M (midpoint $4.9M improvement YOY).

• Exposure to potential tariffs on toys; consumables are domestically sourced; diversification of toy buying underway.

Q: Thoughts on translating new subscriber growth to total order growth and brand awareness contribution?

A: New subscriber growth at inflection point; DTC may return to growth in H2, dependent on holiday season. Brand awareness initiatives to start contributing in CY2025.

Q: Exposure to tariffs and input costs from China?

A: Watched tariffs, mitigation plans in place. Toys could be impacted, but consumables are domestic. Diversification of toy buying underway.

Q: Quantify commerce growth between new vs existing customers?

A: Growth balanced between existing and new customers; expansion in new channels (Chewy, TikTok Shop) and existing partners (Amazon, T.J. Maxx), international expansion (Fressnapf).

Q: Gross margin outlook as commerce contributes more?

A: Commerce has comparable contribution margin to DTC; growth in commerce will be accretive to bottom line.