BARK, Inc. (NYSE:BARK) Q2 2023 Earnings Conference Call November 9, 2022 4:30 PM ET Company Participants Mike Mougias - Vice President of Investor Relations Matt Meeker - Co-Founder and Chief Executive Officer Howard Yeaton - Interim Chief Financial Officer Conference Call Participants Corey Grady - Jefferies Maria Ripps - Canaccord Operator Good evening. Thank you for attending today's BARK's Second Quarter Fiscal Year 2023 Earnings Call. My name is Megan, and I'll be your moderator for today's call. All l ...

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) This section provides unaudited financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) This section presents BARK, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, and cash flows, with detailed notes on accounting policies and financial items [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | March 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $166,310 | $199,397 | | Inventory | $160,634 | $153,115 | | Total current assets | $356,604 | $368,142 | | **Total Assets** | **$444,854** | **$434,061** | | **Liabilities & Equity** | | | | Accounts payable | $45,275 | $36,834 | | Total current liabilities | $111,325 | $108,611 | | Long-term debt | $76,517 | $76,190 | | **Total Liabilities** | **$244,747** | **$217,000** | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net income or loss Statement of Operations Summary (in thousands) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$143,814** | **$120,162** | **$274,964** | **$237,768** | | Gross Profit | $80,341 | $69,886 | $156,155 | $139,677 | | Loss from Operations | ($9,146) | ($15,424) | ($29,284) | ($32,282) | | **Net Income (Loss)** | **($10,639)** | **$6,455** | **($26,047)** | **($18,349)** | | Net income (loss) per share—basic | ($0.06) | $0.04 | ($0.15) | ($0.13) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity over time, including net income, stock-based compensation, and share transactions - Total stockholders' equity **decreased from $217.1 million to $200.1 million** as of September 30, 2022, primarily due to a **net loss of $26.0 million**, partially offset by **$8.2 million** in stock-based compensation[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Cash Flow Summary for Six Months Ended September 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($19,563) | ($108,019) | | Net cash used in investing activities | ($14,108) | ($11,003) | | Net cash provided by financing activities | $586 | $354,168 | | **Net (Decrease) Increase in Cash** | **($33,083)** | **$235,146** | - The significant decrease in cash provided by financing activities in 2022 compared to 2021 is attributed to the prior year's inclusion of **$227.1 million** from the Merger and **$200.0 million** from the PIPE Issuance[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes offer detailed explanations of the company's accounting policies and financial statement line items, covering revenue recognition, long-term debt, stock-based compensation, leases, legal contingencies, and segment reporting Disaggregated Revenue by Segment (in thousands) | Segment | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Direct to Consumer | $117,547 | $106,817 | $235,944 | $212,193 | | Commerce | $26,267 | $13,345 | $39,020 | $25,575 | | **Total Revenue** | **$143,814** | **$120,162** | **$274,964** | **$237,768** | - As of September 30, 2022, the company reported **$76.5 million** in total long-term debt, primarily from the 2025 Convertible Notes[57](index=57&type=chunk)[58](index=58&type=chunk) - The company is involved in a class-action lawsuit filed on September 1, 2022, alleging violations of California's Automatic Renewal Law, for which a Motion to Dismiss and Compel Arbitration was filed[85](index=85&type=chunk) Segment Gross Profit (in thousands) | Segment | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Direct to Consumer | $71,611 | $64,318 | $142,860 | $128,874 | | Commerce | $8,730 | $5,568 | $13,295 | $10,803 | | **Total Gross Profit** | **$80,341** | **$69,886** | **$156,155** | **$139,677** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue growth, key performance indicators, liquidity, and non-GAAP measures, despite reporting a net loss [Key Performance Indicators](index=25&type=section&id=Key%20Performance%20Indicators) This section outlines key metrics such as Subscription Shipments, Active Subscriptions, Customer Acquisition Cost, and Average Order Value used to evaluate business performance Key Performance Indicators Comparison | Metric (in thousands, except CAC, LTV:CAC, AOV) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Subscription Shipments | 3,653 | 3,593 | 7,464 | 7,201 | | Active Subscriptions | 2,241 | 2,089 | 2,241 | 2,089 | | New Subscriptions | 218 | 271 | 477 | 551 | | CAC | $53.19 | $51.71 | $51.89 | $50.01 | | Average Order Value | $32.18 | $29.73 | $31.61 | $29.47 | [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section details the company's operational results, including revenue growth across segments, changes in gross profit and margin, and the narrowing of loss from operations - For the three months ended September 30, 2022, Direct to Consumer revenue increased **10.0%** year-over-year, driven by a **1.7%** rise in Subscription Shipments and an **8.2%** increase in average order value[131](index=131&type=chunk) - Commerce revenue for the three months ended September 30, 2022, surged **96.8%** year-over-year, primarily due to increased volume and accelerated seasonal product orders from retail partners[131](index=131&type=chunk) - Gross margin for the three months ended September 30, 2022, decreased to **55.9%** from **58.2%** year-over-year, primarily due to the higher proportion of lower-margin Commerce business revenue, with Direct to Consumer gross margin at **60.9%** and Commerce at **33.2%**[132](index=132&type=chunk)[133](index=133&type=chunk) - Advertising and marketing expense decreased by **10.2%** year-over-year for the quarter, reflecting reduced media spend due to fewer new subscriber acquisitions[135](index=135&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) This section presents non-GAAP measures like Adjusted Net Loss and Adjusted EBITDA, which show improved performance despite continued losses Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | ($10,639) | $6,455 | ($26,047) | ($18,349) | | **Adjusted EBITDA** | **($2,010)** | **($8,779)** | **($15,042)** | **($16,385)** | | Adjusted EBITDA margin | (1.40)% | (7.31)% | (5.47)% | (6.89)% | Reconciliation of Net Income (Loss) to Adjusted Net Loss (in thousands) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | ($10,639) | $6,455 | ($26,047) | ($18,349) | | **Adjusted net loss** | **($5,350)** | **($11,032)** | **($21,787)** | **($21,043)** | | Adjusted net loss per share | ($0.03) | ($0.07) | ($0.12) | ($0.15) | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash position, operating cash flows, and available credit facilities, which are expected to fund operations for the next 12 months - The company concluded the quarter with **$166.3 million** in cash and cash equivalents[161](index=161&type=chunk) - Net cash used in operating activities for the six months ended September 30, 2022, was **$19.6 million**, a significant improvement from **$108.0 million** used in the prior year period[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - The company holds a **$35.0 million** secured revolving line of credit with Western Alliance Bank, maturing May 31, 2023, with no outstanding borrowings as of September 30, 2022[170](index=170&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company assesses its exposure to market risks, concluding no material impact from interest rates, inflation, or foreign exchange fluctuations - The company does not believe it has material exposure to interest rate risk, inflation risk, or foreign exchange risk[183](index=183&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2022, due to identified material weaknesses in internal control over financial reporting, for which remediation efforts are underway - Management concluded that disclosure controls and procedures were not effective as of September 30, 2022, due to identified material weaknesses[188](index=188&type=chunk) - Material weaknesses were identified in four key areas: insufficient review of account reconciliations, lack of formalized inventory management controls, improper accounting review for complex transactions, and ineffective IT general controls[191](index=191&type=chunk) - The company is implementing remediation efforts, including improving IT controls, hiring additional personnel, enhancing the inventory management system, and formalizing accounting review processes[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [PART II. Other Information](index=44&type=section&id=PART%20II.%20Other%20Information) This section provides additional disclosures, including legal proceedings, risk factors, and other required information not covered in the financial statements [Item 1. Legal Proceedings](index=44&type=section&id=ITEM%201.%20Legal%20Proceedings) This section discloses a class-action complaint filed against BarkBox, Inc., alleging violations of California's Automatic Renewal Law, which the company intends to vigorously defend - A class-action complaint was filed against BarkBox, Inc. on September 1, 2022, alleging inadequate disclosure of automatic subscription renewals in violation of California law[197](index=197&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=ITEM%201A.%20Risk%20Factors) This section details various risks, including customer acquisition challenges, macroeconomic sensitivity, supply chain dependencies, competition, and internal control weaknesses, that could adversely affect the company's business - Strategic risks encompass challenges in cost-effective customer acquisition, brand reputation protection, and successful new product introductions like BARK Food[200](index=200&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) - The business faces macroeconomic risks due to its reliance on consumer discretionary spending, susceptible to inflation, economic downturns, and COVID-19 impacts[210](index=210&type=chunk)[211](index=211&type=chunk) - Operational risks arise from critical reliance on a limited number of suppliers, manufacturers, and logistics partners, primarily in Asia, leading to potential supply chain disruptions[212](index=212&type=chunk) - The company has identified material weaknesses in internal controls over financial reporting, which could result in material misstatements if not remediated[244](index=244&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is marked as 'Not applicable' in the report [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The report indicates 'None' for this item [Item 4. Mine Safety Disclosures](index=59&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is marked as 'Not applicable' in the report [Item 5. Other Information](index=59&type=section&id=ITEM%205.%20Other%20Information) The report indicates 'None' for this item [Item 6. Exhibits](index=59&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and XBRL data files

BARK, Inc. (NYSE:BARK) Q1 2023 Earnings Conference Call August 9, 2022 4:30 PM ET Company Participants Mike Mougias – Vice President of Investor Relations Matt Meeker – Co-Founder and Chief Executive Officer Howard Yeaton – Interim Chief Financial Officer Conference Call Participants Maria Ripps – Canaccord Corey Grady – Jefferies Operator Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the BARK’s First Quarter Fiscal 2023 Ear ...

Financial Performance - Revenue for the three months ended June 30, 2022, was $131,150,000, representing a 11.6% increase from $117,606,000 for the same period in 2021[12] - Gross profit for the same period was $75,814,000, compared to $69,791,000 in the prior year, indicating a gross margin improvement[12] - The net loss for the three months ended June 30, 2022, was $15,408,000, a decrease from a net loss of $24,804,000 in the same period of 2021[12] - The company reported a net loss per share of $0.09 for the quarter, compared to a net loss per share of $0.23 in the prior year[12] - The net loss for the three months ended June 30, 2022, was $15.4 million, an improvement from a net loss of $24.8 million for the same period in 2021, representing a 38.5% reduction[19] - Cash used in operating activities decreased to $17.4 million in Q2 2022 from $61.9 million in Q2 2021, indicating a 71.9% improvement[19] - The company’s other income (expense)—net for the three months ended June 30, 2022 was $6.119 million, compared to $(6.385) million for the same period in 2021, indicating a significant improvement[84] Assets and Liabilities - Total current assets decreased to $356,913,000 as of June 30, 2022, from $368,142,000 as of March 31, 2022[10] - Total liabilities increased to $233,441,000 as of June 30, 2022, compared to $217,000,000 as of March 31, 2022[10] - Cash and cash equivalents decreased to $177,242,000 from $199,397,000 during the same period[10] - The company reported long-term debt of $76.35 million as of June 30, 2022, slightly up from $76.19 million as of March 31, 2022[55] - The Company has a Credit Facility of $35.0 million, with no outstanding borrowings as of June 30, 2022, providing liquidity for future needs[63] Inventory and Capital Expenditures - The company’s inventory increased to $158,016,000 as of June 30, 2022, up from $153,115,000 as of March 31, 2022[10] - Capital expenditures for the three months ended June 30, 2022, were $4.7 million, compared to $8.3 million in the prior year, reflecting a 43.5% decrease[19] Customer and Supplier Concentration - The Company had three significant customers accounting for 51% of gross accounts receivable as of June 30, 2022, indicating reliance on a few key clients[39] - The Company had two suppliers that accounted for 29% of total finished goods purchased during the three months ended June 30, 2022, highlighting supplier concentration risk[40] Stock-Based Compensation and Equity - The company reported a stock-based compensation expense of $4.3 million for Q2 2022, up from $3.1 million in Q2 2021, which is a 40.2% increase[19] - The total stock-based compensation expense for the three months ended June 30, 2022 was $4.343 million, compared to $3.098 million for the same period in 2021, representing an increase of approximately 40%[73] - As of June 30, 2022, the company granted equity awards to purchase an aggregate of 1,039,544 shares of common stock with a weighted average exercise price of $3.45[69] - The company has reserved 3,385,901 shares of common stock for future issuance under the 2021 Employee Stock Purchase Plan, which became effective in June 2021[68] Future Outlook and Strategic Plans - The company plans to continue expanding its product offerings and market presence, although specific future projections were not detailed in the report[6] - The company expects its cash and cash equivalents to be sufficient to fund operations for at least the next twelve months despite recurring losses since inception[26] Segment Performance - The Direct to Consumer segment revenue was $118.40 million, up from $105.38 million in the prior year, driven by a 10.9% increase in subscription box sales[50] - Direct to Consumer revenue increased to $118.4 million in 2022 from $105.4 million in 2021, representing a growth of 12.4%[92] - Consolidated revenue reached $131.2 million in 2022, up from $117.6 million in 2021, marking a year-over-year increase of 11.5%[92] - Gross profit for Direct to Consumer was $71.2 million in 2022, compared to $64.6 million in 2021, reflecting a growth of 10.5%[92] - The cost of revenue for Direct to Consumer rose to $47.1 million in 2022 from $40.8 million in 2021, an increase of 15.9%[92] Risk Management - The company maintains reserves for potential credit losses on customer accounts, reflecting a proactive approach to managing credit risk[38] - The company does not anticipate material risks from interest rate changes, as a hypothetical 10% increase would not significantly impact financial statements[166] - Inflation has not materially affected the company's operations, but potential inflationary pressures could impact cost management[168] - The company primarily operates in the U.S. and executes transactions in U.S. dollars, limiting foreign exchange risk exposure[169]

BARK, Inc. (NYSE:BARK) Q4 2022 Earnings Conference Call May 31, 2022 4:30 PM ET Corporate Participants Mike Mougias - Vice President, Investor Relations Matt Meeker - Co-Founder and Chief Executive Officer Howard Yeaton - Interim Chief Financial Officer Conference Call Participants Maria Ripps - Canaccord Steph Wissink - Jefferies Operator Good afternoon. Thank you attending today’s BARK’s Fiscal Fourth Quarter and Full Year 2022 Earnings Call. My name is Hannah, and I will be your moderator for today’s cal ...

BARK, Inc. (NYSE:BARK) Q3 2022 Earnings Conference Call February 10, 2022 4:30 PM ET Company Participants Mike Mougias - Vice President, Investor Relations Matt Meeker - Co-Founder & Chief Executive Officer Howard Yeaton - Interim Chief Financial Officer Conference Call Participants Maria Ripps - Canaccord Steph Wissink - Jeffries Operator Hello, and welcome to BARK’s Third Quarter Fiscal 2022 Earnings Conference Call. My name is Alex, and I will be coordinating the call today. [Operator Instructions] I wo ...

Financial Data and Key Metrics Changes - Total revenue for the quarter was $120.2 million, representing a 39% increase year-over-year [27] - Gross profit was $69.9 million, resulting in a gross margin of 58% [29] - Customer acquisition cost (CAC) was $51.71, up only 7% compared to the previous quarter, with a lifetime value to CAC (LTV to CAC) ratio of approximately 5 times [30][31] Business Line Data and Key Metrics Changes - Active subscriptions increased by 271,000, totaling 2.1 million, a 39% increase year-over-year [7] - Subscription shipments reached 3.6 million, a 34% increase year-over-year [7] - Average order value (AOV) was $29.73, a $1.55 increase compared to the same period last year [8] Market Data and Key Metrics Changes - Direct-to-consumer revenue was $106.8 million, up 42% year-over-year, driven by subscription growth [27] - Revenue from the Commerce segment was $13.3 million, up 21% year-over-year, slightly lower than expected due to shipping delays [28] Company Strategy and Development Direction - The company is focused on expanding its Play business and launching new categories like Food and Health, with significant growth potential in these areas [12][18] - The "One BARK" initiative aims to create a unified customer experience across various product categories, enhancing customer retention and cross-selling opportunities [20][21] - Investments in technology and data analytics are expected to drive further growth and improve customer relationships [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about meeting customer demand during the holiday season, despite challenges from rising shipping costs and supply chain issues [11][23] - The company anticipates continued growth in subscriptions and AOV, which are seen as key indicators of long-term business health [11][23] - Guidance for total revenue in the third quarter is projected to be between $137 million and $139 million, with adjusted EBITDA losses expected to be between $38 million and $40 million for the full fiscal year [38][39] Other Important Information - The company ended the quarter with $273 million in cash and $130 million in inventory, a 68% year-over-year increase, to mitigate potential holiday season freight congestion [36] - The CFO search is ongoing, with Howard Yeaton appointed as Interim CFO [24][26] Q&A Session Summary Question: What are the assumptions for CAC costs going forward? - Management targets an LTV to CAC ratio between 4 times and 5 times, with a potential seasonal increase in CAC expected [44] Question: Can you provide data on the add-to-box business? - The add-to-box feature has driven higher gross margins and contributed to an increase in AOV, with a focus on upselling and cross-selling [46] Question: How does the company plan to handle rising costs? - The company is exploring various strategies to offset rising costs, including improving AOV through cross-selling rather than simply raising prices [49][51] Question: What is the path to profitability for the new Food segment? - The Food segment is expected to achieve profitability faster due to its structure and the ability to cross-sell to existing customers [53]