Bark Inc.

11/10/2025 | Press release | Distributed by Public on 11/10/2025 07:46

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto for the year ended March 31, 2025 contained in the Annual Report on Form 10-K filed with the SEC on June 4, 2025. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to "we", "us", "our", "the Company" and "BARK" are intended to mean the business and operations of BARK, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements for the three and six months ended September 30, 2025 and 2024, respectively, present the financial position and results of operations of BARK, Inc. and its wholly-owned subsidiaries.
Overview
We believe that dogs and humans are better together and we aspire to be the world's favorite dog brand. We are a team of dog-obsessed people committed to delivering personalization at scale by satisfying each dog's distinct personality, preferences, and needs with the best products and services. Since our founding in 2011, we have happily served millions of dogs and their people.
We are an omnichannel brand serving dogs across two key categories: toys & accessories and consumables. All of our products are designed, developed, and branded by BARK. We leverage an ever-growing collection of first-party data, customer insights, and machine learning to deliver personalized products and experiences tailored to the needs of each and every dog we serve. Our products are sold Direct-to-Consumer and through our network of retail partners, which currently spans over 50,000 doors nationwide and online marketplaces including Amazon and Chewy.
We began our journey with BarkBox - a monthly-themed subscription of toys and treats, tailored to the needs of each customer based on their dog's size, play style, allergies, and more. By viewing each dog as an individual, and by creating magical experiences for our customers, we have been able to build lasting relationships with millions of dogs and their parents. Our customer service ("Happy Team") proactively engages around 200,000 customers each month. We use the valuable data from these customer interactions to inform the design and development of future products, and we leverage it along with machine learning technology to recommend additional products to our customers through cross-selling and Add-to-Box ("ATB").
In addition to being one of the largest dog toy brands in the U.S. by revenue, we also have entered exciting, and much larger categories in the consumables space, which include kibble, treats, toppers, supplements, and dental products. These categories have significantly increased our total addressable market and the number of customers we can serve. We believe that our growing first-party dataset, strong brand, and loyal customer base afford us a meaningful advantage and opportunity to win market share in these newer categories.
Certain macroeconomic and global events, conditions and challenges
Market factors or international events, such as increased inflation, war, rising tensions between the U.S. and China, and continued changes to trade policy, including the imposition of tariffs or changes in tariff rates, create uncertainty and could impact our results of operations.
Tariffs. In early 2025, new tariffs were announced on imports to the United States, including additional tariffs on goods from China, Canada, and other countries from which we source products. The scope, duration, and ultimate impact of these tariffs and related actions remain uncertain and could result in higher product costs.
The Company has implemented, and continues to execute, various mitigation strategies to manage the impact of tariffs, including negotiating lower product costs with suppliers, diversifying supply sources to alternate countries,
optimizing product assortment, providing Direct to Consumer subscribers with a lower-cost packaging option and implementing select pricing adjustments. Collectively, these actions have meaningfully mitigated the potential impact of tariffs on our Gross Profit. We believe our mitigation strategies will help maintain our competitiveness over the long term and, most importantly, make all dogs happy.
The ultimate impact of tariffs and related measures will depend on factors such as whether additional or incremental tariffs are imposed, the extent of retaliatory actions by other countries, and the overall effectiveness of, and consumer response to, our mitigation strategies.
Macroeconomic Conditions.Macroeconomic conditions and the related effects on levels of consumer spending impact our business as purchases of discretionary items tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty. Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on market declines and uncertainty, home prices, credit availability and consumer debt levels, political instability due to war or other geopolitical factors and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have led to recession fears and created a challenging environment.
We cannot predict the duration or magnitude of such impacts. Please refer to the "Cautionary Note Regarding Forward-Looking Statements" and the "Risk Factors" in this Quarterly Report on Form 10-Q.
Key Performance Indicators
We use the following key financial and operating metrics to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions. These key financial and operating metrics should be read in conjunction with the following discussion of our results of operations and financial condition together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.
Three Months Ended
September 30, 		Six Months Ended
September 30,
2025 2024 2025 2024
Total Orders (in thousands) 2,544 3,270 5,363 6,712
Average Order Value $ 30.87 $ 30.91 $ 30.83 $ 30.92
Direct to Consumer Gross Profit (in thousands)(1)
$ 51,538 $ 65,504 $ 111,722 $ 134,774
Direct to Consumer Gross Margin (1)
65.6 % 64.8 % 67.6 % 64.9 %
(1) Direct to Consumer Gross Profit and Direct to Consumer Gross Margin does not include the revenue or cost of goods sold from BARK Air.
Total Orders
We define Total Orders as the total number of Direct to Consumer orders shipped in a given period. These include all orders across all of our product categories, regardless of whether they are purchased on a subscription, auto-ship, or one-off basis. Total Orders excludes orders from BARK Air. We use Total Orders as an indicator of customer interest and demand.
Average Order Value
Average Order Value ("AOV") is Direct to Consumer revenue for the period divided by Total Orders for the same period. AOV excludes Direct to Consumer revenue from BARK Air. We use AOV to provide insight into customer spending patterns.
Components of Our Results of Operations
We operate with two reportable segments: Direct to Consumer and Commerce, to reflect the way our Chief Executive Officer, who is our CODM, reviews and assesses the performance of the business.
Revenue
The Company generates revenue through its Direct to Consumer and Commerce segments, each of which participate in the sale of the Company's Toys & Accessories and Consumables product lines. See below for additional information.
Toys & Accessories ("toys")-The majority of our revenue in the toys category is derived from BarkBox and Super Chewer, which are subscription products that feature monthly themed boxes of premium-quality BARK toys and treats that are delivered directly to a dog's home. Customers have the option to subscribe to these products on a one month, three month, six month, or twelve month basis. Subscription revenue is recognized at a point in time as control is transferred to the subscriber upon delivery of each monthly box. During the life of their subscription, we offer our customers incremental products via "ATB", which allows us to cross-sell customers across our full portfolio of products, including kibble, treats, toppers, dental and more. ATB revenue is recognized at a point in time as control is transferred to the customer upon delivery of goods to the subscriber.
We also sell toys through our Commerce segment which is a network of retail partners and online major market places. This distribution channel allows us to reach new customers and introduce them to the BARK brand. Commerce revenue derived from our retail partners is recognized net of estimates for sales returns, discounts, markdowns and allowances, after the goods are shipped, or when the retail customer picks up the goods directly from one of our distribution points and control of the goods is transferred to the customer. Online marketplaces revenue is recognized upon delivery of goods to the end customer.
Our toys category also includes revenue derived from the sale of other products such as beds, leashes, apparel, and other accessories.
Consumables-The majority of our consumables revenue today is derived from the treats and chews that are included in our BarkBox and Super Chewer boxes. Over the past several years, the Company has expanded into new and larger consumables markets such as kibble, toppers, supplements and dental products. The Company sells its consumables products both Direct to Consumer (through Bark.co) and through its retail footprint. Products sold via the Company's website can be purchased on a recurring, auto-ship, or one-off basis. Revenue related to bark.co is recognized at a point in time, as control is transferred to the customer upon each delivery.
Treats- Includes treats and chews included in our BarkBox and Super Chewer boxes, as well as the sale of treats on Bark.co. Many of our treats feature monthly themes, similar to our toys. Today, BARK is one of the largest treat brands in the U.S. by revenue. The Company also began selling its treats in over 2,400 doors nationwide in the Spring of 2024. The Company has been expanding its treat offering among other partners, including Amazon, Chewy, Meijer and anticipates further expansion in the year ahead.
Toppers-Includes meal-enhancing sprinkles, broths and bites that are added to a dog's meal to enhance the flavor of their food. These toppers are often single ingredient proteins that can be easily added to a dog's existing meal plan. Toppers are particularly beneficial for picky eaters.
Supplements-Includes a variety of dog supplements such as hip and joint support, and skin and coat support. These products are often targeted at specific breeds that are prone to certain ailments.
Kibble-We sell a variety of kibble, priced to compete with the premium category. While our kibble can be purchased on an individual basis or auto-ship basis, we entered this market with a breed-based approach that recommends meal plans consisting of a mix of kibble, toppers, and supplements based on the characteristics and personalities of various dog breeds. For example, because German Shepherds are prone to hip issues, we recommend hip and joint support supplements with the purchase of their kibble. If that dog is also a picky eater, we will recommend adding one of our toppers. This enhances our average order value and margin profile.
Dental-Also known as BARK Bright, this category includes a variety of chews and toothpastes aimed at improving your dog's dental health. BARK Bright eliminates the arduous task of brushing a dog's teeth while still effectively fighting germs and bad breath. Our BARK Bright dental kit provides an innovative regimen for dog dental care.
Overall, we see significant runway in our consumables category long-term, and anticipate the majority of our future growth may be driven by these product categories.
BARK Air-Announced in April 2024, BARK Air is a first-of-its kind air travel experience tailored to dogs. The Company partnered with a jet charter company, offering premium flights for customers and their dogs. Interested parties can book flights at dogsflyfirst.com. Our charter partner is responsible for all aircraft, crew, maintenance, and insurance, allowing BARK to focus on creating a great travel experience for dogs and their people worldwide. We believe this initiative exemplifies the Company's dog-first approach to curating the best products and services.
Cost of Revenue
Cost of revenue primarily consists of the purchase price of inventory sold, inbound freight costs associated with inventory, shipping supply costs, inventory shrinkage costs and charter costs for BARK Air.
Operating Expenses
Operating expenses consist of general and administrative and advertising and marketing expenses.
General and Administrative
General and administrative expenses consist primarily of compensation and benefits costs, including stock-based compensation expense, office expense, including rent, insurance, professional service fees, and other general overhead costs including depreciation and amortization of right-of-use, fixed and intangible assets, account management support teams, and commissions. General and administrative expenses also include fees charged by third parties that provide payment processing services, fulfillment costs, which represent costs incurred in operating and staffing fulfillment and customer service centers, including costs attributable to receiving, inspecting, picking, packaging and preparing customer orders for shipment, outbound freight costs associated with shipping orders to customers, and responding to inquiries from customers.
Advertising and Marketing
Advertising and marketing expense consists primarily of internet advertising, promotional items, agency fees, other marketing costs and compensation and benefits expenses, including stock-based compensation expense, for employees engaged in advertising and marketing.
Interest Income
Interest income primarily consists of income earned on our money market funds and interest-bearing deposit accounts.
Interest Expense
Interest expense primarily consists of interest incurred under our 2025 Convertible Notes (as defined below), and amortization of debt issuance costs.
Other Income (Expense) Net
Other income (expense) net, primarily consists of changes in the fair value of our warrant liabilities.
Results of Operations
We operate in two reportable segments to reflect the way our CODM reviews and assesses the performance of the business. See Note 2, "Summary of Significant Accounting Policies," in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Three Months Ended
September 30, 		Six Months Ended September 30,
2025 2024 % Change 2025 2024 % Change
(in thousands)
(in thousands)
Condensed Consolidated Statements of Operation and Comprehensive Loss Data:
Revenue
Direct to Consumer $ 82,148 $ 102,599 (19.9) % $ 171,324 $ 209,658 (18.3) %
Commerce 24,822 23,512 5.6 % 38,507 32,665 17.9 %
Total revenue 106,970 126,111 (15.2) % 209,831 242,323 (13.4) %
Cost of revenue
Direct to Consumer 30,175 37,083 (18.6) % 59,606 75,134 (20.7) %
Commerce 14,835 12,916 14.9 % 24,188 17,811 35.8 %
Total cost of revenue 45,010 49,999 (10.0) % 83,794 92,945 (9.8) %
Gross profit 61,960 76,112 (18.6) % 126,037 149,378 (15.6) %
Operating expenses:
General and administrative 57,221 63,143 (9.4) % 114,473 126,567 (9.6) %
Advertising and marketing 15,398 18,665 (17.5) % 30,575 39,096 (21.8) %
Total operating expenses 72,619 81,808 (11.2) % 145,048 165,663 (12.4) %
Loss from operations (10,659) (5,696) 87.1 % (19,011) (16,285) 16.7 %
Interest income 678 1,353 (49.9) % 1,486 2,832 (47.5) %
Interest expense (711) (687) 3.5 % (1,420) (1,398) 1.6 %
Other income (expense), net 20 (233) (108.6) % 1,243 (451) N/M
Net Loss before income taxes (10,672) (5,263) 102.8 % (17,702) (15,302) 15.7 %
Net loss and comprehensive loss $ (10,672) $ (5,263) 102.8 % $ (17,702) $ (15,302) 15.7 %
N/Mmeans not meaningful.
Comparison of the Three Months Ended September 30, 2025 and September 30, 2024
Revenue
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Revenue
Direct to Consumer(1)
$ 82,148 $ 102,599 $ (20,451) (19.9) %
Commerce 24,822 23,512 1,310 5.6 %
Total revenue $ 106,970 $ 126,111 $ (19,141) (15.2) %
Percentage of Revenue
Direct to Consumer 76.8 % 81.4 %
Commerce 23.2 % 18.6 %
(1) Direct to Consumer includes revenue from BARK Air.
Direct to Consumer revenue decreased by $20.5 million, or 19.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily driven by a 22.2%,or0.7 milliondecrease in Total Orders, and a $0.04 or 0.1% decrease in AOV. The decrease was partially offset by an increase in revenue from BARK Air of $2.1 million. Total BARK Air revenue was $3.6 million or 4.4% of Direct to Consumer revenue.
Commerce revenue increased by $1.3million, or 5.6% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily driven by sales volume from existing and new customers.
Gross Profit
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Gross Profit
Direct to Consumer (1)
$ 51,973 $ 65,516 $ (13,543) (20.7) %
Commerce 9,987 10,596 (609) (5.7) %
Total gross profit $ 61,960 $ 76,112 $ (14,152) (18.6) %
Percentage of revenue 57.9 % 60.4 %
(1) Direct to Consumer includes revenue and cost of goods sold from BARK Air.
Direct to Consumer and Commerce gross profit decreased by $13.5 million and $0.6 million, respectively for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit is partly attributable to higher tariffs and increased inbound shipping costs in the quarter.
Gross profit as a percentage of revenue decreased 2.5% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Direct to Consumer gross margin was 63.3%, 60 basis points lower than the same period last year. Excluding the impact of BARK Air, Direct to Consumer gross margin
was 65.6%, 80 basis points higher than the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes. Commerce gross margin was 40.2%, 480 basis points lower than the same period last year. The decrease in Commerce gross margin is primarily attributable to changes in customer mix and, to a lesser extent, the timing of the implementation of our tariff mitigation strategies.
General and Administrative Expense
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Other general and administrative $ 25,727 $ 29,055 $ (3,328) (11.5)%
Shipping and fulfillment 31,494 34,088 (2,594) (7.6)%
Total General and administrative 57,221 63,143 $ (5,922) (9.4)%
Percentage of revenue 53.5 % 50.1 %
Total general and administrative expense decreased by $5.9 million, or 9.4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $2.6 million attributable to lower Direct to Consumer volumes, decreased compensation expense of $2.7 million, as well as decreased professional fees of $0.5 million.
Advertising and Marketing
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Advertising and marketing $ 15,398 $ 18,665 $ (3,267) (17.5)%
Percentage of revenue 14.4 % 14.8 %
Advertising and marketing expense decreased by $3.3 million, or 17.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease is primarily attributable to decreased Direct to Consumer marketing spend.
Interest Income
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Interest income $ 678 $ 1,353 $ (675) (49.9)%
Percentage of revenue 0.6 % 1.1 %
Interest income decreased by $0.7 million, or 49.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in interest income is due to an overall decrease in cash in interest-bearing deposit accounts.
Interest Expense
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Interest expense $ (711) $ (687) $ (24) 3.5%
Percentage of revenue (0.7) % (0.5) %
Interest expense was flat for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Interest expense for each period is derived from the Company's 2025 Convertible Notes.
Other Income (Expense) Net
Three Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Other income (expense) net $ 20 $ (233) $ 253 NM
Percentage of revenue - % (0.2) %
NM means not meaningful
Other income, net increased by $0.3million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to the change of the fair value of our warrant liabilities.
Comparison of the Six Months Ended September 30, 2025 and September 30, 2024
Revenue
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Revenue
Direct to Consumer (1)
$ 171,324 $ 209,658 $ (38,334) (18.3) %
Commerce 38,507 32,665 5,842 17.9 %
Total revenue $ 209,831 $ 242,323 $ (32,492) (13.4) %
Percentage of Revenue
Direct to Consumer 81.6 % 86.5 %
Commerce 18.4 % 13.5 %
(1) Direct to Consumer includes revenue from BARK Air.
Direct to Consumer revenue decreased by $38.3 million, or 18.3%, for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. This decrease was primarily driven by the 20.1% or 1.3 million decrease in Total Orders, in addition to a $0.09 or 0.3% decrease in AOV. The decrease was partially
offset by increased revenue from BARK Air of $3.9 million. Total BARK Air revenue was $6.0 million or 3.5% of Direct to Consumer revenue.
Commerce revenue increased by $5.8million for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. This increase was primarily driven by sales volume from existing and new customers.
Gross Profit
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Gross Profit
Direct to Consumer (1)
$ 111,718 $ 134,524 $ (22,806) (17.0) %
Commerce 14,319 14,854 (535) (3.6) %
Total gross profit $ 126,037 $ 149,378 $ (23,341) (15.6) %
Percentage of revenue 60.1 % 61.6 %
(1) Direct to Consumer includes revenue and cost of goods sold from BARK Air.
Direct to Consumer and Commerce gross profit decreased by $22.8 million and $0.5 million, respectively for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit is partly attributable to the opportunistic sell-through of surplus inventory, higher tariffs and inbound shipping costs.
Gross profit as a percentage of revenue decreased 150 basis points for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. Direct to Consumer gross margin was 65.2%, 100 basis points higher and Commerce gross margin was 37.2%, 830 basis points lower than the same period last year, respectively. Excluding the impact of BARK Air, Direct to Consumer gross margin increased 270 basis points compared to the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes.
Commerce gross margin was 37.2%, 830 basis points lower than the same period last year. The decrease in Commerce gross margin is primarily attributable to opportunistic sell-through of surplus inventory, changes in customer mix, and, to a lesser extent, timing of our tariff mitigation strategies in the current period.
Operating Expenses
General and Administrative Expense
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Other general and administrative $ 51,226 $ 58,080 $ (6,854) (11.8) %
Shipping and fulfillment $ 63,247 $ 68,487 (5,240) (7.7) %
Total General and administrative $ 114,473 $ 126,567 $ (12,094) (9.6) %
Percentage of revenue 54.6 % 52.2 %
General and administrative expense decreased by $12.1 million, or 9.6%, for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. This decrease from the prior period was
primarily due to: decreased shipping and fulfillment costs of $5.2 million attributable to lower direct to consumer volumes, decreased compensation expense of $5.7 million primarily due to a decrease in headcount, decreased impairment expense of $1.4 million, and decreased professional and legal fees of $0.7 million.
Advertising and Marketing
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Advertising and marketing $ 30,575 $ 39,096 $ (8,521) -21.8 %
Percentage of revenue 14.6 % 16.1 %
Advertising and marketing expense decreased by $8.5 million, or 21.8%, for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The decrease during the period is attributable to decreased Direct to Consumer marketing spend.
Interest Income
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Interest income $ 1,486 $ 2,832 $ (1,346) (47.5) %
Percentage of revenue 0.7 % 1.2 %
Interest income decreased by $1.3 million for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The decrease in interest income is due to an overall decrease in cash in interest-bearing deposit accounts in line with the deployment of cash for the partial debt repayment of $44.4 million during the fiscal third quarter ended December 31, 2023 and share repurchases of $26.5 million as part of the share repurchase program which began during the fiscal second quarter ended September 30, 2023.
Interest Expense
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Interest expense $ (1,420) $ (1,398) $ (22) 1.6 %
Percentage of revenue (0.7) % (0.6) %
Interest expense was flat for the six months ended September 30, 2025, compared to the six months ended September 30, 2024. Interest expense for each period is derived from the Company's 2025 Convertible Notes.
Other Income (Expense), Net
Six Months Ended
September 30,
2025 2024 $ Change % Change
( in thousands)
Other income (expense), net $ 1,243 $ (451) $ 1,694 (375.6) %
Percentage of revenue 0.6 % (0.2) %
Other income (expense), net increased by $1.7 million for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The increase in other income (expense), net, was primarily due to the decrease in the fair value of our warrant liabilities of $1.6 million.
Non-GAAP Financial Measures
We report our financial results in accordance with U.S. GAAP. However, management believes that Adjusted Net Loss, Adjusted Net Loss Margin, Adjusted Net Loss Per Common Share, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow, all non-GAAP financial measures (together the "Non-GAAP Measures"), provide investors with additional useful information in evaluating our performance.
We calculate Adjusted Net Loss as net loss, adjusted to exclude: (1) stock-based compensation expense, (2) change in fair value of warrants and derivatives, (3) sales and use tax income, (4) restructuring charges related to reduction in force payments, (5) litigation expenses (consisting of legal and related fees for a specific proceeding that is outside of our ordinary course of business), (6) warehouse restructuring costs, (7) non-cash impairment of previously capitalized software and cloud computing implementation costs, (8) technology modernization costs, and (9) other items (as defined below).
We calculate Adjusted Net Loss Margin by dividing Adjusted Net Loss for the period by Revenue for the period.
We calculate Adjusted Net Loss Per Common Share by dividing Adjusted Net Loss for the period by weighted average common shares used to compute net loss per share attributable to common stockholders for the period.
We calculate Adjusted EBITDA as net loss, adjusted to exclude: (1) interest income, (2) interest expense, (3) depreciation and amortization, (4) stock-based compensation expense, (5) change in fair value of warrants and derivatives, (6) capitalized cloud computing amortization, (7) sales and use tax income, (8) restructuring charges related to reduction in force payments, (9) litigation expenses (consisting of legal and related fees for a specific proceeding that is outside of our ordinary course of business), (10) warehouse restructuring costs, (11) non-cash impairment of previously capitalized software and cloud computing implementation costs, (12) technology modernization costs, and (13) other items (as defined below).
We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA for the period by revenue for the period.
We calculate Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures.
The Non-GAAP Measures are financial measures that are not required by, or presented in accordance with U.S. GAAP. We believe that the Non-GAAP Measures, when taken together with our financial results presented in accordance with U.S. GAAP, provide meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of the Non-GAAP Measures are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.
The Non-GAAP Measures are presented for supplemental informational purposes only, have limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of the Non-GAAP Measures include that (1) the measures do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) Adjusted EBITDA and Adjusted EBITDA Margin do not consider the impact of stock-based compensation expense, which is an ongoing expense for our company, (4) Adjusted EBITDA and Adjusted EBITDA Margin do not reflect other non-operating expenses, including interest expense and (5) Free cash flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments. In addition, our use of the Non-GAAP Measures may not be comparable to
similarly titled measures of other companies because they may not calculate the Non-GAAP Measures in the same manner, limiting their usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider the Non-GAAP Measures alongside other financial measures, including our net loss and other results stated in accordance with U.S. GAAP.
The following table presents a reconciliation of Adjusted Net Loss to Net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, and the calculation of net loss margin, Adjusted Net Loss Margin and Adjusted Net Loss Per Common Share for the periods presented:
Adjusted Net Loss
Three Months Ended
September 30, 		Six Months Ended
September 30,
2025 2024 2025 2024
(in thousands, except per share data)
Net Loss $ (10,672) $ (5,263) $ (17,702) $ (15,302)
Stock compensation expense 3,716 2,957 7,310 5,898
Change in fair value of warrants and derivatives 130 521 (652) 913
Sales and use tax income (1) (87) (246) (327) (1,549)
Restructuring - 731 423 1,504
Litigation expenses (2) 111 251 287 638
Warehouse restructuring costs 942 359 1,668 899
Impairment of assets 769 1,344 769 2,142
Technology modernization (3) 399 498 723 1,206
Other items (4) 143 107 200 925
Adjusted net loss (income)
$ (4,549) $ 1,259 $ (7,301) $ (2,726)
Net loss margin (9.98) % (4.17) % (8.44) % (6.31) %
Adjusted net loss (income) margin
(4.25) % 1.00 % (3.48) % (1.12) %
Adjusted net loss per common share - basic and diluted $ (0.03) $ 0.01 $ (0.04) $ (0.02)
Weighted average common shares used to compute adjusted net loss per share attributable to common stockholders - basic and diluted 170,762,090 175,063,942 169,989,757 175,311,379
The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, and the calculation of net loss margin and Adjusted EBITDA margin for the periods presented:
Adjusted EBITDA
Three Months Ended
September 30, 		Six Months Ended
September 30,
2025 2024 2025 2024
(in thousands) (in thousands)
Net Loss $ (10,672) $ (5,263) $ (17,702) $ (15,302)
Interest income (678) (1,353) (1,486) (2,832)
Interest expense 711 687 1,420 1,398
Depreciation and amortization expense 2,585 2,800 5,104 5,679
Stock compensation expense 3,716 2,957 7,310 5,898
Change in fair value of warrants and derivatives 130 521 (652) 913
Cloud computing amortization 493 93 914 172
Sales and use tax income (1) (87) (246) (327) (1,549)
Restructuring - 731 423 1,504
Litigation expenses (2) 111 251 287 638
Warehouse restructuring costs 942 359 1,668 899
Impairment of assets 769 1,344 769 2,142
Technology modernization (3) 399 498 723 1,206
Other items (4) 143 107 200 925
Adjusted EBITDA $ (1,438) $ 3,486 $ (1,349) $ 1,691
Net loss margin (9.98) % (4.17) % (8.44) % (6.31) %
Adjusted EBITDA margin (1.34) % 2.76 % (0.64) % 0.70 %
(1)Sales and use tax (income) expense relates to recording a liability for sales and use tax we did not collect from our customers. Historically, we had collected state or local sales, use, or other similar taxes in certain jurisdictions in which we only had physical presence. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc., that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have positioned themselves to require sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state and accordingly, we recorded a liability in those periods in which we created economic nexus based on each state's requirements. Accordingly, we now collect, remit, and report sales tax in all states that impose a sales tax. Subsequently, as certain of these liabilities are waived by tax authorities or the applicable statute of limitations expires, the related accrued liability is reversed.
(2)Litigation expenses related to a shareholder class action complaint, see Item 1. Legal Proceedings.
(3)Includes consulting fees related to technology transformation activities, and payroll costs for employees that dedicate significant time to this project. We believe that these costs are discrete and non-recurring in nature, as they relate to a one-time unification of our product offerings on our new commerce platform. As such, they are not normal, recurring operating expenses and are not reflective of ongoing trends in the cost of doing business.
(4) For the three months ended September 30, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million. For the three months ended September 30, 2024, other items is comprised of executive transition costs including recruiting costs of less than $0.1 million, costs associated with the share repurchase program of less than $0.1 million, and duplicate headquarters rent of less than $0.1 million. For the six months ended September 30, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million and costs associated with the share repurchase program of less than $0.1 million. For the six months ended September 30, 2024, other items is comprised of executive transition costs including recruiting costs of $0.4 million, non-recurring retention payments to management of $0.2 million, costs associated with the share repurchase program of $0.2 million, and duplicate headquarters rent of less than $0.1 million.
The following table presents a reconciliation of Free Cash Flow to Net cash provided by (used in) operating activities, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:
Free Cash Flow
Three Months Ended
September 30, 		Six Months Ended
September 30,
2025 2024 2025 2024
Free cash flow reconciliation:
Net cash (used in) provided by operating activities $ (18,074) $ 2,773 $ (23,514) $ 4,566
Capital expenditures (1,852) (1,807) (2,560) (3,851)
Free cash flow $ (19,926) $ 966 $ (26,074) $ 715
Liquidity and Capital Resources
Since inception, we have funded our operations with proceeds from sales of our capital stock and proceeds from borrowings in addition to cash generated by our operations. As of September 30, 2025, we had cash and cash equivalents of approximately $63.4 million. We expect that our cash and cash equivalents, together with cash provided by our operating activities and proceeds from borrowings (as defined below), will be sufficient to fund our operations for at least the next 12 months. We are required to comply with certain financial and non-financial covenants related to our borrowing agreements, which we expect to be in compliance with during the next 12 months. Our future capital requirements will depend on many factors, including our pace of new and existing customer growth and our investments in partnerships and unexplored channels. We may be required to seek additional equity or debt financing.
2025 Convertible Notes
On November 27, 2020, the Company issued $75.0 million aggregate principal amount of 2025 Convertible Notes (the "2025 Convertible Notes") to Magnetar Capital, LLC ("Magnetar") under an indenture, dated as of November 27, 2020, between Legacy BARK and U.S. Bank National Association, as trustee and collateral agent (the "Indenture"). The Company received net proceeds of approximately $74.7 million from the sale of the 2025 Convertible Notes, after deducting fees and expenses of approximately $0.3 million. The Company recorded the expenses associated with the issuance of the 2025 Convertible Notes as a discount to the note and will amortize the expenses over the term of the note.
On November 2, 2023, the Company repurchased $45.0 million of the $83.5 million of outstanding aggregate principal amount of 5.50% Convertible Secured Notes due 2025 (the "2025 Convertible Notes") from entities affiliated with Magnetar Financial, LLC (collectively, the "Holders"), pursuant to the terms and conditions of a negotiated notes purchase agreement (the "2023 Agreement") among the Company and the Holders.
Pursuant to the 2023 Agreement, the Company repurchased $45.0 million in aggregate principal amount of the 2025 Convertible Notes plus $2.2 million of accrued and unpaid interest thereon to, but excluding the repurchase date, from the Holders for a total cash purchase price of $44.4 million. In addition, $1.0 million of unamortized deferred financing fees were derecognized from the Company's balance sheet on the date of extinguishment. The
accelerated deferred financing fees were recognized as a component of gain on extinguishment of debt. The Company recognized a gain on debt extinguishment of $1.8 million in connection with the repurchase. In the unlikely event that a Change of Control (as defined in the Indenture) of the Company occurs at any time after the date of the 2023 Agreement and prior to the December 1, 2025 maturity date of the Notes, the Holders are also entitled to receive an additional cash "true-up" payment from the Company, totaling, in the aggregate for all Holders, either (i) $11.3 million in the event that the Company elects to redeem all of the Notes outstanding at the time of such Change of Control or (ii) $4.5 million in the event that the Holders elect to require the Company to repurchase all of the 2025 Convertible Notes outstanding at the time of such Change of Control, in each event, in accordance with the terms and conditions specified in the Agreement.
On November 6, 2025, the Company repurchased the remaining $42.9 million of outstanding aggregate principal amount of 5.50% Convertible Secured Notes due 2025 (the "2025 Convertible Notes") from entities affiliated with Magnetar Financial, LLC (collectively, the "Holders"), pursuant to the terms and conditions of a negotiated notes purchase agreement (the "2025 Agreement") among the Company and the Holders (the "Final Repurchase").
Pursuant to the 2025 Agreement, on November 6, 2025, the Company repurchased all $42.9 million of the remaining outstanding aggregate principal amount of the 2025 Convertible Notes from the Holders for a total cash purchase price of $45.1 million (which included $2.2 million of accrued and unpaid interest, through but excluding, the repurchase date). There was no gain or loss in connection with the Final Repurchase. In the unlikely event that a Change of Control of the Company occurs prior to the December 1, 2025 maturity date of the Notes, the Holders are also entitled to receive an additional cash "true-up" payment from the Company, totaling, in the aggregate for all Holders, either (i) $10.7 million in the event that the Company elects to redeem all of the Notes outstanding at the time of such Change of Control or (ii) $4.3 million in the event that the Holders elect to require the Company to repurchase all of the 2025 Convertible Notes outstanding at the time of such Change of Control, in each case, in accordance with the terms and conditions specified in the 2025 Agreement.
Western Alliance Bank-Line of Credit
In October 2017, the Company entered into a loan and security agreement with and issued a warrant to purchase preferred stock ("Initial Western Alliance Warrant") to Western Alliance Bank ("Western Alliance"), which provide for a revolving line of credit (as amended, the "Credit Facility") in an aggregate principal amount of up to $35.0 million, subject to borrowing base limitations derived from advance rates derived from the Company's eligible subscription revenues and eligible accounts receivable. The Credit Facility has been amended several times, most recently in November 2025. After giving effect to this most recent amendment, the maturity date of the Credit Facility is January 2, 2026. Certain of the Company's obligations to Western Alliance and under the Credit Facility are guaranteed by certain of its subsidiaries and secured by substantially all of their assets. The Company intends to enter in to a longer term renewal of the Credit Facility.
The interest rate for borrowings under the Credit Facility is equal to (a) the greater of (i) the prime rate that is published in the Money Rates section of The Wall Street Journal from time to time and (ii) five and one quarter percent (5.25%) per annum, plus (b) half of one percent (0.50%), per annum.
The Credit Facility has a borrowing base subject to an amount equal to eighty percent (80.00%) of the Company's trailing three months of subscription revenue and an amount equal to (80.00%) of certain of the Company's customer accounts receivable when a collateral audit is performed and sixty percent (60.00%) when no such collateral audit is performed. Western Alliance has first perfected security in substantially all of the Company's assets, including its rights to its intellectual property.
The Credit Facility requires the Company to comply with certain financial and performance covenants, including, among other things, minimum cash deposits with Western Alliance. The Credit Facility also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, making payments in respect of subordinated debt or our 2025 Convertible Notes, incurring indebtedness, making loans and investments, incurring liens, or entering into mergers, asset sales and transactions with affiliates.
As of September 30, 2025 and March 31, 2024, there were no outstanding borrowings under the Credit Facility. As of September 30, 2025 and March 31, 2025, the Company was in compliance with its financial covenants.
Cash Flows
Comparison of the Six Months Ended September 30, 2025 and 2024.
The following table summarizes our cash flows for the six months ended September 30, 2025 and 2024:
Six Months Ended September 30,
2025 2024
(in thousands)
Net cash provided by (used in) operating activities $ (23,514) $ 4,566
Net cash used in investing activities (2,560) (3,851)
Net cash used in financing activities (2,764) (6,482)
Effect of exchange rate changes on cash (14) (53)
Net decrease in cash and restricted cash $ (28,852) $ (5,820)
Cash flows provided by (used in) Operating Activities
Net cash flows provided by (used in) operating activities represent the cash receipts and disbursements related to our activities other than investing and financing activities.
Net cash flows provided by (used in) operating activities is derived by adjusting our net loss for:
•non-cash operating items such as depreciation and amortization, stock-based compensation and other non-cash income or expenses; and
•changes in operating assets and liabilities reflect timing differences between the receipt and payment of cash associated with transactions.
For the six months ended September 30, 2025, net cash used in operating activities was $23.5 million. The $23.5 million of net cash used in operating activities consisted of net loss of $17.7 million adjusted for non-cash charges totaling $15.8million and a net increase of $21.6 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $7.3million for stock based compensation, and depreciation and amortization of $5.1 million. The increase in our net operating assets and liabilities was primarily driven by an increase in inventory of $13.8 million and an increase in accounts receivable of $7.5million.
For the six months ended September 30, 2024, net cash provided by operating activities was $4.6 million. The $4.6 million of net cash provided by operating activities consisted of net loss of $15.3 million adjusted for non-cash charges totaling $18.7 million and a net increase of $1.2 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.9 million for changes in fair value of warrants, $5.9 million for stock based compensation, impairment of $2.1 million, depreciation and amortization of $5.7 million, and increase in the provision for inventory obsolescence of $1.4 million. The increase in our net operating assets and liabilities was primarily driven by higher accounts payable and accrued expenses of $22.9 million, offset by and an increase in inventory of $5.6 million and an increase in accounts receivable of $9.2 million.
Cash flows used in Investing Activities
For the six months ended September 30, 2025 and 2024, net cash used in investing activities was $2.6 million and $3.9 million, respectively, primarily due to software development costs and capital expenditures.
Cash flows used in Financing Activities
For the six months ended September 30, 2025 and 2024, net cash used in financing activities was $2.8 million and $6.5 million, respectively, primarily due to payments and corresponding excise tax related to the repurchase of common stock.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Except as described in Note 2, "Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements," to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our audited consolidated financial statements and notes thereto for the year ended March 31, 2025 contained in the Annual Report on Form 10-K filed with the SEC on June 4, 2025.
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