BARK Reports Fourth Quarter and Fiscal Year 2024 Results

Rhea-AI Summary

BARK reported its Q4 and Fiscal Year 2024 financial results, showing promising improvements. Q4 revenue was $121.5 million, aligning with guidance, and gross margin improved to 62.7%. Net loss reduced by 65.5% to $4.9 million, and adjusted EBITDA was $2.2 million. For the Fiscal Year 2024, BARK achieved $490.2 million in revenue, with a 61.6% gross margin. The net loss improved by 39.8% to $37.0 million. The company announced a $15 million share repurchase program. Despite fewer orders impacting revenue, significant gains in profitability and operational efficiency were highlighted. The outlook for Fiscal Year 2025 predicts flat to 2.0% revenue growth with adjusted EBITDA anticipated between $1.0 million and $5.0 million.

Positive

• Q4 revenue at $121.5 million met the guidance range.
• Q4 gross margin improved by 580 basis points year-over-year to 62.7%.
• Net loss in Q4 decreased by 65.5% to $4.9 million.
• Adjusted EBITDA in Q4 improved to $2.2 million, a $5.7 million increase year-over-year.
• Revenue for Fiscal Year 2024 was $490.2 million.
• Fiscal Year 2024 gross margin improved by 410 basis points to 61.6%.
• Net loss for Fiscal Year 2024 decreased by 39.8% to $37.0 million.
• Adjusted EBITDA for Fiscal Year 2024 improved by $20.7 million to $(10.6) million.
• Net cash provided by operating activities was $6.1 million.
• Announcement of a $15 million share repurchase program.
• Secured commitments from Target and PetSmart to carry new product lines.

Negative

• Q4 revenue declined by 3.6% year-over-year.
• Direct-to-consumer revenue in Q4 decreased by 5.7% year-over-year.
• Fiscal Year 2024 revenue declined by 8.4% compared to the prior year.
• Fiscal Year 2024 direct-to-consumer revenue saw a 7.5% decrease.
• Commerce revenue for Fiscal Year 2024 decreased by 15.1%.
• Advertising and marketing expenses increased to $79.3 million in Fiscal Year 2024.
• Free cash flow for Fiscal Year 2024 was negative at $(2.8) million.

Insights

Financial Analyst

The financial results for BARK show a mixed performance that could be seen as cautiously optimistic. The revenue of $121.5 million in the fourth quarter and $490.2 million for the fiscal year is within the company's guidance range but represents a year-over-year decline of 3.6% and 8.4% respectively. While this might concern investors, the company has demonstrated significant improvements in other key areas.

Notably, the gross margin improvements to 62.7% for Q4 and 61.6% for the fiscal year reflect more efficient operations and favorable contract pricing. This is a solid indicator of the company's ability to manage costs effectively. Additionally, the substantial reduction in net loss from $(61.5) million to $(37.0) million shows good progress towards profitability.

The share repurchase program of $15.0 million is another positive signal. It suggests confidence in the future and provides a mechanism to increase shareholder value by potentially reducing the number of shares outstanding. However, one should carefully consider the timing and execution of this program given the company's recent cash flow constraints.

Overall, BARK's financials suggest a company in transition, reducing losses and improving margins, but facing challenges in maintaining revenue growth. The upcoming fiscal year guidance projecting flat to modest revenue growth of 0-2% and an expected Adjusted EBITDA improvement is cautious but indicates stability.

Market Research Analyst

BARK's strategic actions and market presence adjustments are key points to consider. The new product commitments from Target and PetSmart are significant developments, indicating expanding retail distribution. This could open new revenue streams and improve market penetration, offsetting declines in direct consumer sales.

However, the decrease in the average order value and total orders over the year raises questions about customer retention and engagement with core offerings like BarkBox and Super Chewer subscriptions. The company must ensure these new retail ventures do not cannibalize its direct-to-consumer segment but rather complement it.

The increased advertising and marketing expenses are a double-edged sword. While it potentially sets the stage for future growth, it also pressures short-term profitability. The company’s strategy must balance these expenditures with visible returns in customer acquisition and sales growth.

Overall, BARK is positioning itself well within a competitive market but must navigate carefully to balance costs, growth and customer retention.

Board of Directors Authorizes $15.0 Million Share Repurchase Program

NEW YORK--(BUSINESS WIRE)-- BARK, Inc. (NYSE: BARK) (“BARK” or the “Company”), a leading global omnichannel dog brand with a mission to make all dogs happy, today announced its financial results for the fiscal fourth quarter and full year ended March 31, 2024.

Fiscal Fourth Quarter 2024 Highlights

• Delivered revenue of $121.5 million, the midpoint of the guidance range.
• Gross margin improved by 580 basis points year-over-year to 62.7%.
• Net loss improved 65.5% to $(4.9) million, compared to last year.
• Adjusted EBITDA was $2.2 million, the midpoint of the guidance range, and a $5.7 million improvement, compared to last year.
• Secured commitments from Target and PetSmart to carry the Company's new line of treats in 2,400 doors nationwide.

Fiscal Year 2024 Highlights

• Revenue was $490.2 million, with 89.0% coming from the direct-to-consumer segment.
• Gross margin improved by 410 basis points year-over-year to 61.6%.
• Net loss improved 39.8% to $(37.0) million, compared to last year.
• Adjusted EBITDA was $(10.6) million, a $20.7 million improvement, compared to last year.
• Net cash provided by operating activities was $6.1 million; free cash flow was $(2.8) million.

"Fiscal 2024 was a significant year for BARK in that we capped it off with another strong quarter, and we're building momentum entering fiscal 2025," said Matt Meeker, Chief Executive Officer of BARK. "Last quarter, we improved our gross margin by 580 basis points year-over-year and delivered $2.2 million of Adjusted EBITDA, our second positive quarter in fiscal 2024. Further, free cash flow for the year was just $(2.8) million, a notable improvement compared to $(16.6) million last year, and $(193.5) million in fiscal 2022."

Meeker continued, "We also rounded out our leadership team this quarter by bringing on four new members, filling key roles we have needed for some time. Given our significant progress over the past 24 months, we believe we are entering fiscal 2025 with a strong foundation that will enable us to meaningfully accelerate growth over the long-term."

Key Performance Indicators

	Three Months Ended March 31,								Twelve Months Ended March 31,
	2024				2023				2024				2023
Total Orders (in thousands)		3,499				3,617				13,924				14,888
Average Order Value	$	31.25			$	32.07			$	31.34			$	31.70
Direct to Consumer Gross Profit (in thousands)	$	70,803			$	68,271			$	278,868			$	285,328
Direct to Consumer Gross Margin		64.8	%			58.9	%			63.9	%			60.5	%

Fiscal Fourth Quarter 2024 Highlights

• Revenue was $121.5 million, the midpoint of the Company's guidance range. Revenue declined 3.6% year-over-year primarily driven by fewer total orders in the most recent period, largely related to the Company carrying fewer BarkBox and Super Chewer subscriptions into the quarter, compared to last year.
• Direct to Consumer (“DTC”) revenue was $109.3 million, a 5.7% decrease year-over-year, primarily related to the items discussed above.
• Commerce revenue was $12.1 million, a 20.9% increase year-over-year. The increase was primarily timing related in addition to incremental revenue derived from introducing treats into retail.
• Gross profit was $76.2 million, a 6.2% increase compared to last year.
• Gross margin was 62.7%, as compared to 57.0% in the same period last year. The increase was driven by new contract pricing delivering an improvement in unit cost of goods in the most recent period.
• Advertising and marketing expenses were $18.8 million as compared to $15.4 million in the previous year. The recent improvements in the Company's profitability profile enable more flexibility to invest in marketing to drive long-term growth.
• General and administrative (“G&A”) expenses were $63.9 million, as compared to $69.2 million in the prior year. This decrease was largely driven by the Company's February and July 2023 cost reduction initiatives, along with consolidating shipping vendors to drive efficiencies and improve shipping terms.
• Net loss was $(4.9) million, as compared to a net loss of $(14.2) million in the previous year.
• Adjusted EBITDA was $2.2 million, a $5.7 million improvement compared to last year and at the midpoint of the Company's guidance range.
• Net cash provided by (used in) operating activities was $(1.0) million. Free cash flow, defined as net cash provided by (used in) operating activities less capital expenditures, was $(3.2) million. Free cash flow in the period was adversely impacted by the timing of year-end accounts payable outflow.

Fiscal Year 2024 Highlights

• Revenue was $490.2 million, the midpoint of the Company's guidance range and a 8.4% decrease compared to prior year. The decline was primarily driven by lower total orders as the Company carried fewer BarkBox and Super Chewer customers into fiscal 2024. Moreover, our retail partners remained cautious given macroeconomic pressure on more discretionary categories.
• Direct to Consumer ("DTC") revenue was $436.4 million, a 7.5% decrease compared to prior year.
• Commerce revenue was $53.7 million, a 15.1% decrease compared to prior year.
• Gross profit was $302.2 million, a 1.9% decrease compared to prior year.
• Gross margin was 61.6% compared to 57.6% in the prior year.
• Advertising and marketing was $79.3 million compared to $68.8 in the prior year.
• General and administrative ("G&A") was $268.4 million compared to $303.1 million in the prior year.
• Net loss was $(37.0) million compared to $(61.5) million in the prior year.
• Adjusted EBITDA was $(10.6) million, a 66% improvement as compared to the Company's Adjusted EBITDA loss of $(31.3) in the prior year.
• Net cash provided by (used in) operating activities was $6.1 million. Free cash flow was $(2.8) million.

Balance Sheet Highlights

• The Company’s cash and cash equivalents balance as of March 31, 2024 was $125.5 million, a $5.8 million decrease compared to prior quarter. The Company repurchased $1.8 million of its common stock in the fourth quarter at an average price of $1.12.
• The Company's inventory balance as of March 31, 2024 was $84.2 million, a decrease of $14.3 million compared to the prior quarter and a $40.2 million decrease compared to last year.

Share Repurchase Program

The Company today announced that its Board of Directors has authorized the repurchase of up to $15.0 million of its common shares. This decision reflects the Company’s strong financial position and positive outlook on its future cash position.

Under the share repurchase program, the Company may repurchase up to $15.0 million of its outstanding common stock. The repurchase program permits the Company to repurchase shares of common stock at any time or from time to time at management’s discretion in open market transactions made in accordance with the provisions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, privately negotiated transactions or by other means in accordance with applicable securities laws. The timing, price and volume of stock repurchases will be based on a number of factors, including market conditions, relevant securities laws, and other considerations. The Company has no obligation to repurchase shares and this program may be suspended or discontinued by the Company at any time. Throughout the execution of this program, the Company is committed to retaining the financial flexibility it needs to invest in its core operations.

Fiscal First Quarter and Full Year 2025 Financial Outlook

Based on current market conditions as of June 3, 2024, BARK is providing guidance for revenue and Adjusted EBITDA, which is a Non-GAAP financial measure, as follows.

For the fiscal full year 2025, the Company expects:

• Total revenue of $490 million to $500 million, reflecting year-over-year growth of flat to 2.0%.
• Adjusted EBITDA of $1.0 million to $5.0 million, reflecting a year-over-year improvement of $11.6 million to $15.6 million.

For the fiscal first quarter 2025, the Company expects:

• Total revenue of $113.0 million to $116.0 million.
• Adjusted EBITDA of $(4.0) million to $(2.0) million.

We do not provide guidance for Net Loss due to the uncertainty and potential variability of certain items, including stock-based compensation expenses and related tax effects, which are the reconciling items between Net Loss and Adjusted EBITDA. Because such items cannot be calculated or predicted without unreasonable efforts, we are unable to provide a reconciliation of Adjusted EBITDA to Net Loss. However, such items could have a significant impact on Net Loss.

The guidance provided above constitutes forward looking statements and actual results may differ materially. Please refer to the “Forward Looking Statements” section below for information on the factors that could cause our actual results to differ materially from these forward looking statements and “Non-GAAP Financial Measures” for additional important information regarding Adjusted EBITDA.

Conference Call Information

A conference call to discuss the Company's fiscal fourth quarter and full year 2024 results will be held today, June 3, 2024, at 4:30 p.m. ET. During the conference call, the Company may make comments concerning business and financial developments, trends and other business or financial matters. The Company's comments, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.

The conference call can be accessed by dialing 1-888-330-2120 for U.S. participants and 1-646-960-0290 for international participants. The conference call passcode is 5515653. A live audio webcast of the call will be available at https://investors.bark.co/ and will be archived for 1 year.

About BARK

BARK is the world’s most dog-centric company, devoted to making dogs happy with the best products, services and content. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, wildly satisfying treats, great food for your dog, effective and easy to use dental care, and dog-first experiences that foster the health and happiness of dogs everywhere. Founded in 2011, BARK loyally serves dogs nationwide with themed toys and treats subscriptions, BarkBox and BARK Super Chewer; custom product collections through its retail partner network, including Target and Amazon; its high-quality, nutritious meals made for your breed with BARK Food; and products that meet dogs’ dental needs with BARK Bright®. At BARK, we want to make dogs as happy as they make us because dogs and humans are better together. Sniff around at BARK.co for more information.

Forward Looking Statements

This press release contains forward-looking statements relating to, among other things, the future performance of BARK that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” "anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. These statements include, but are not limited to, statements about future operating results, including our strategies, plans, commitments, objectives and goals. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to, risks relating to the uncertainty of the projected financial information with respect to BARK; the risk that spending on pets may not increase at projected rates; that BARK subscriptions may not increase their spending with BARK; BARK’s ability to continue to convert social media followers and contacts into customers; BARK’s ability to successfully expand its product lines and channel distribution; competition; the uncertain effects of global or macroeconomic events or challenges.

More information about factors that could affect BARK's operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company's annual report on Form 10-K, copies of which may be obtained by visiting the Company’s Investor Relations website at https://investors.bark.co/ or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the Company on the date hereof. The Company assumes no obligation to update such statements.

Definitions of Key Performance Indicators

Total Orders

We define Total Orders as the total number of DTC 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.

Average Order Value

Average Order Value (“AOV”) is Direct to Consumer revenue for the period divided by Total Orders for the same period. In prior periods, the Company calculated AOV by dividing DTC revenue by total subscription shipments.

BARK, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands)
	Three Months Ended								Fiscal Year Ended
	March 31,				March 31,				March 31,				March 31,
	2024				2023				2024				2023
REVENUE	$	121,483			$	126,017			$	490,184			$	535,315
COST OF REVENUE		45,255				54,248				188,032				227,200
Gross profit		76,228				71,769				302,152				308,115
OPERATING EXPENSES:
General and administrative		63,919				69,203				268,390				303,139
Advertising and marketing		18,760				15,365				79,282				68,807
Total operating expenses		82,679				84,568				347,672				371,946
LOSS FROM OPERATIONS		(6,451	)			(12,799	)			(45,520	)			(63,831	)
INTEREST INCOME		1,682				978				7,533				1,056
INTEREST EXPENSE		(704	)			(1,355	)			(4,351	)			(5,428	)
OTHER INCOME (EXPENSE)—NET		570				(1,026	)			5,328				6,684
NET LOSS BEFORE INCOME TAXES		(4,903	)			(14,202	)			(37,010	)			(61,519	)
PROVISION FOR INCOME TAXES		—				—				—				—
NET LOSS AND COMPREHENSIVE LOSS	$	(4,903	)		$	(14,202	)		$	(37,010	)		$	(61,519	)

DISAGGREGATED REVENUE
(In thousands)
	Fiscal Year Ended
	March 31,
	2024			2023			2022
Revenue
Direct to Consumer:
Toys & Accessories(1)	$	284,676		$	307,045		$	294,253
Consumables(1)		151,770			164,949			153,821
Total Direct to Consumer	$	436,446		$	471,994		$	448,074
Commerce		53,738			63,321			59,332
Revenue	$	490,184		$	535,315		$	507,406

(1)

The allocation between Toys & Accessories and Consumables includes estimates and was determined utilizing data on stand alone selling prices that the Company charges for similar offerings, and also reflects historical pricing practices. The fiscal year ended March 31, 2022 disaggregated revenue information for Direct to Consumer revenue has been reclassified to conform with the current presentation to allocate revenue between Toys & Accessories and Consumables.

GROSS PROFIT BY SEGMENT
(In thousands)
	Three Months Ended March 31,						Fiscal Year Ended March 31,
	2024			2023			2024			2023
Direct to Consumer:
Revenue	$	109,345		$	115,976		$	436,446		$	471,994
Cost of revenue		38,542			47,705			157,578			186,666
Gross profit		70,803			68,271			278,868			285,328
Commerce:
Revenue		12,137			10,041			53,738			63,321
Cost of revenue		6,712			6,543			30,454			40,534
Gross profit		5,425			3,498			23,284			22,787
Consolidated:
Revenue		121,482			126,017			490,184			535,315
Cost of revenue		45,254			54,248			188,032			227,200
Gross profit	$	76,228		$	71,769		$	302,152		$	308,115

BARK, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
	March 31,				March 31,
	2024				2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	125,495			$	177,911
Accounts receivable—net		7,696				6,554
Prepaid expenses and other current assets		4,379				3,552
Inventory		84,177				124,336
Total current assets		221,747				312,353
PROPERTY AND EQUIPMENT—NET		25,540				39,851
INTANGIBLE ASSETS—NET		11,921				4,090
OPERATING LEASE RIGHT-OF-USE ASSETS		32,793				36,892
OTHER NONCURRENT ASSETS		6,587				7,234
TOTAL ASSETS	$	298,588			$	400,420
LIABILITIES, AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,737			$	34,370
Operating lease liabilities, current		5,294				5,484
Accrued and other current liabilities		30,490				31,975
Deferred revenue		25,957				27,772
Total current liabilities		75,478				99,601
LONG-TERM DEBT		39,926				81,221
OPERATING LEASE LIABILITIES		42,599				47,240
OTHER LONG-TERM LIABILITIES		1,202				1,821
Total liabilities		159,205				229,883
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, par value $0.0001 per share—500,000,000 shares authorized; 175,533,136 shares issued and outstanding as of March 31, 2024 and 500,000,000 shares authorized; 177,647,754 shares issued and outstanding as of March 31, 2023.		1				1
Treasury stock, at cost, 4,643,589 and 0 shares, respectively		(6,225	)			—
Additional paid-in capital		492,427				480,370
Accumulated deficit		(346,820	)			(309,834	)
Total stockholders’ equity		139,383				170,537
TOTAL LIABILITIES, AND STOCKHOLDERS’ EQUITY	$	298,588			$	400,420

BARK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Fiscal Year Ended
	March 31,				March 31,
	2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(37,010	)		$	(61,519	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation & amortization		12,602				9,427
Impairment of assets		3,079				2,065
Amortization of deferred financing fees and debt discount		578				676
Bad debt expense		154				178
Stock-based compensation expense		12,931				14,811
Loss on disposal of assets		72				—
(Decrease) increase in inventory reserves		(548	)			(4,768	)
Loss on exercise of equity classified warrants		—				—
Gain on extinguishment of debt		(1,828	)			—
Change in fair value of warrant liabilities and derivatives		(2,738	)			(5,350	)
Paid in kind interest on convertible notes		2,119				4,354
Non-cash lease expense		4,100				4,902
Changes in operating assets and liabilities:
Accounts receivable		(1,296	)			3,019
Inventory		40,706				33,549
Prepaid expenses and other current assets		(1,074	)			2,554
Other assets		700				(133	)
Accounts payable and accrued expenses		(17,779	)			457
Deferred revenue		(1,814	)			(3,778	)
Operating lease liabilities		(4,830	)			(3,281	)
Proceeds from tenant improvement allowances		—				7,351
Other liabilities		(2,064	)			180
Net cash provided by operating activities		6,060				4,694
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(8,831	)			(21,320	)
Proceeds from sale of investments		—				175
Net cash used in investing activities		(8,831	)			(21,145	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of restricted stock units held for taxes		(1,409	)			(917	)
Payment of finance lease obligations		(215	)			(2,345	)
Proceeds from the exercise of stock options		108				1,018
Proceeds from issuance of common stock under ESPP		489				145
Payments to repurchase common stock		(6,225	)			—
Excise tax from stock repurchases		(63	)			—
Payments of long-term debt		(42,300	)			—
Net cash (used in) provided by financing activities		(49,615	)			(2,099	)
Effect of exchange rate changes on cash		24				(62	)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(52,362	)			(18,612	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—BEGINNING OF PERIOD		183,067				201,679
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD	$	130,705			$	183,067
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents		125,495				177,911
Restricted cash—Prepaid expenses and other current assets		5,210				5,156
Total cash, cash equivalents and restricted cash	$	130,705			$	183,067
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	2,385			$	283
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchases of property and equipment included in accounts payable and accrued liabilities	$	4			$	131
Establishment of operating lease	$	—			$	25,628
Lease modification and termination	$	—			$	3,532

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) expense, (4) restructuring charges related to reduction in force payments, (5) (gain) loss on extinguishment of debt, (6) duplicate rent expense incurred as a result of relocating our corporate headquarters, (7) asset impairment charges, (8) technology transformations 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 expense, (4) stock-based compensation expense, (5) change in fair value of warrants and derivatives, (6) sales and use tax (income) expense, (7) restructuring charges related to reduction in force payments, (8) (gain) loss on extinguishment of debt, (9) duplicate rent expense incurred during the relocation of our corporate headquarters, (10) impairment of assets, (11) technology transformation and (12) 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, provides 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. 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 income (loss) and other results stated in accordance with U.S. GAAP, 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.

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 March 31,								Fiscal Year Ended March 31,
	2024				2023				2024				2023
	(in thousands, except per share data)
Net loss	$	(4,903	)		$	(14,202	)		$	(37,010	)		$	(61,519	)
Stock-based compensation expense		2,421				2,935				12,931				14,811
Change in fair value of warrants and derivatives		(521	)			1,173				(2,738	)			(5,350	)
Sales and use tax (income) expense (1)		(332	)			(71	)			(487	)			(365	)
Restructuring		117				1,763				1,660				1,763
(Gain) loss on extinguishment of debt		—				—				(1,828	)			—
Duplicate headquarters rent		23				30				93				1,747
Impairment of assets (2)		—				613				3,079				2,065
Technology transformation (3)		684				—				684				—
Other Items (4)		2,026				1,264				3,594				1,784
Adjusted net loss	$	(485	)		$	(6,495	)		$	(20,022	)		$	(45,064	)
Net loss margin		(4.04	)%			(11.27	)%			(7.55	)%			(11.49	)%
Adjusted net loss margin		(0.40	)%			(5.15	)%			(4.08	)%			(8.42	)%
Adjusted net loss per common share - basic and diluted	$	—			$	(0.04	)		$	(0.11	)		$	(0.26	)
Weighted average common shares used to compute adjusted net loss per share attributable to common stockholders - basic and diluted		175,479,974				177,929,476				177,260,581				176,717,509

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 March 31,								Fiscal Year Ended March 31,
	2024				2023				2024				2023
	(in thousands)								(in thousands)
Net loss	$	(4,903	)		$	(14,202	)		$	(37,010	)		$	(61,519	)
Interest income		(1,682	)			(978	)			(7,533	)			(1,056	)
Interest expense		704				1,355				4,351				5,428
Depreciation and amortization expense		3,703				2,680				12,602				9,427
Stock-based compensation expense		2,421				2,935				12,931				14,811
Change in fair value of warrants and derivatives		(522	)			1,173				(2,738	)			(5,350	)
Sales and use tax (income) expense (1)		(332	)			(71	)			(487	)			(365	)
Restructuring		117				1,763				1,660				1,763
(Gain) loss on extinguishment of debt		—				—				(1,828	)			—
Duplicate headquarters rent		23				30				93				1,747
Impairment of assets (2)		—				613				3,079				2,065
Technology transformation (3)		684				—				684				—
Other items (4)		2,026				1,264				3,594				1,784
Adjusted EBITDA	$	2,239			$	(3,438	)		$	(10,602	)		$	(31,265	)
Net loss margin		(4.04	)%			(11.27	)%			(7.55	)%			(11.49	)%
Adjusted EBITDA margin		1.84	%			(2.73	)%			(2.16	)%			(5.84	)%

(1)		Sales and use tax 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)		For the fiscal year ended March 31, 2024 impairment of assets is the non-cash impairment of previously capitalized software and prepaid software licenses. For the fiscal year ended March 31, 2023 impairment of assets is the impairment of the right-of-use asset associated with our previous headquarters which we vacated.
(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 fiscal year ended March 31, 2024, other items is comprised of non-recurring retention payments to management of $1.4 million, executive transition costs of $1.3 million, warehouse restructuring costs of $0.8 million, and legal settlements of $0.1 million. For fiscal year ended March 31, 2023, other items comprised of executive transition costs of $1.7 million and tax penalties of $0.1 million.

The following table presents a reconciliation of Free Cash Flow to Net cash used in operating activities, the most directly comparable financial measure prepared in accordance with U.S. GAAP, for each of the periods indicated:

Free Cash Flow
	Three Months Ended March 31,								Fiscal Year Ended March 31,
	2024				2023				2024				2023
Free cash flow reconciliation:
Net cash (used in) provided by operating activities	$	(1,042	)		$	19,180			$	6,060			$	4,694
Capital expenditures		(2,132	)			(2,466	)			(8,831	)			(21,320	)
Free cash flow	$	(3,174	)		$	16,714			$	(2,771	)		$	(16,626	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240603183183/en/

Investors:

Michael Mougias

investors@barkbox.com

Media:

Garland Harwood

press@barkbox.com

Source: BARK, Inc.

FAQ

What were BARK's Q4 2024 revenue and gross margin?

BARK's Q4 2024 revenue was $121.5 million, and the gross margin improved to 62.7%.

How did BARK's net loss change in Q4 2024?

BARK's net loss in Q4 2024 improved by 65.5% to $4.9 million.

What was BARK's revenue for Fiscal Year 2024?

BARK reported a revenue of $490.2 million for Fiscal Year 2024.

How did BARK's adjusted EBITDA perform in Fiscal Year 2024?

BARK's adjusted EBITDA improved to $(10.6) million in Fiscal Year 2024, a $20.7 million improvement.

What is the value of BARK's share repurchase program announced in 2024?

BARK announced a $15 million share repurchase program in 2024.

What are BARK's revenue expectations for Fiscal Year 2025?

BARK expects revenue between $490 million and $500 million for Fiscal Year 2025, reflecting flat to 2.0% growth.

How did BARK's advertising and marketing expenses change in Fiscal Year 2024?

BARK's advertising and marketing expenses increased to $79.3 million in Fiscal Year 2024.

What was BARK's free cash flow for Fiscal Year 2024?

BARK reported a free cash flow of $(2.8) million for Fiscal Year 2024.