Allbirds(BIRD) - 2025 Q2 - Quarterly Results

Allbirds Second Quarter 2025 Financial Performance Second Quarter 2025 Overview The company met Q2 guidance despite declining revenue and prepares for growth with new financing and lower inventory - The company expects to return to top-line growth in the fourth quarter of 2025, fueled by a continuous flow of new modern lifestyle footwear[3] - Completed a comprehensive financing package, including a new three-year $75 million revolving credit facility, enhancing financial flexibility[8] Q2 2025 Key Financial Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Revenue | $39.7 million | -23.1% | | Gross Margin | 40.7% | -980 bps | | Net Loss | $15.5 million | N/A | | Adjusted EBITDA Loss | $12.6 million | Improved from $13.7M loss | | Inventory | $42.2 million | -21.3% | Second Quarter Operating Results Q2 revenue and gross margin declined due to strategic shifts, but reduced operating expenses improved the adjusted EBITDA loss - The year-over-year decrease in net revenue is primarily attributed to planned retail store closures and international distributor transitions[4] - Gross margin declined mainly due to increased promotional activity, inventory adjustments related to the European market transition, a higher mix of international distributor business, and increased freight costs[5] Q2 2025 vs Q2 2024 Operating Results (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $39.7 | $51.6 | -23.1% | | Gross Profit | $16.2 | $26.1 | -38.0% | | SG&A Expense | $24.2 | $33.6 | -28.0% | | Marketing Expense | $8.5 | $11.7 | -27.3% | | Net Loss | $15.5 | $19.1 | Improved | | Adjusted EBITDA Loss | $12.6 | $13.7 | Improved | Six Month Operating Results First-half revenue and gross margin fell, though net loss and adjusted EBITDA loss showed year-over-year improvement - Marketing expenses increased to 28.6% of net revenue in H1 2025 from 21.4% in H1 2024, driven by investments in a new brand marketing campaign during the first quarter[13] First Half 2025 vs First Half 2024 Operating Results (in millions) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $71.8 | $90.9 | -21.0% | | Gross Profit | $30.6 | $44.5 | -31.2% | | Gross Margin | 42.6% | 49.0% | -640 bps | | Net Loss | $37.4 | $46.5 | Improved | | Adjusted EBITDA Loss | $31.2 | $34.6 | Improved | Balance Sheet Highlights The balance sheet shows cash of $33.1 million, new borrowings of $5.0 million, and a 21.3% year-over-year inventory reduction - Inventory levels decreased by 21.3% compared to the same period last year, indicating successful inventory management[14] Balance Sheet Key Items (as of June 30, 2025) | Item | Value | | :--- | :--- | | Cash and cash equivalents | $33.1 million | | Outstanding borrowings | $5.0 million | | Inventories | $42.2 million | 2025 Financial Guidance Full Year 2025 Guidance The company lowered its full-year revenue guidance but reiterated its adjusted EBITDA loss forecast - The guidance includes an estimated $20 million to $25 million negative revenue impact from the transition to a distributor model in certain international markets and U.S. store closures, an increase from the prior estimate of $18 million to $23 million[15] Full Year 2025 Financial Guidance | Metric | New Guidance | Previous Guidance | | :--- | :--- | :--- | | Net Revenue | $165M - $180M | $175M - $195M | | Adjusted EBITDA Loss | $65M - $55M | $65M - $55M (Reiterated) | Third Quarter 2025 Guidance The company projects Q3 net revenue between $33 million and $38 million and an adjusted EBITDA loss of $16 million to $20 million Third Quarter 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Net Revenue | $33M - $38M | | - U.S. Net Revenue | $27M - $31M | | - International Net Revenue | $6M - $7M | | Adjusted EBITDA Loss | $20M - $16M | Appendix: Financial Statements & Reconciliations Condensed Consolidated Statements of Operations The Q2 statement of operations shows lower revenue but an improved net loss due to reduced operating expenses Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net revenue | $39,685 | $51,582 | | Gross profit | $16,154 | $26,055 | | Total operating expense | $32,681 | $46,245 | | Loss from operations | $(16,527) | $(20,190) | | Net loss | $(15,501) | $(19,133) | Condensed Consolidated Balance Sheets The balance sheet reflects reduced total assets and liabilities, driven by lower cash and lease obligations Balance Sheet Comparison (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $33,144 | $66,732 | | Inventory | $42,243 | $44,121 | | Total current assets | $94,284 | $130,558 | | Total assets | $136,818 | $188,879 | | Total liabilities | $65,457 | $87,194 | | Total stockholders' equity | $71,361 | $101,685 | Condensed Consolidated Statements of Cash Flows Cash used in operations improved in H1 2025, with financing activities providing a net cash inflow Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(36,575) | $(41,791) | | Net cash used in investing activities | $(894) | $95 | | Net cash provided by financing activities | $2,152 | $183 | | Net decrease in cash | $(33,583) | $(42,605) | Reconciliation of GAAP to Non-GAAP Financial Measures This section reconciles the Q2 GAAP net loss of $15.5 million to a non-GAAP adjusted EBITDA loss of $12.6 million Q2 2025 Net Loss to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net loss (GAAP) | $(15,501) | | Stock-based compensation | $2,048 | | Depreciation and amortization | $1,907 | | Other adjustments | $(1,021) | | Adjusted EBITDA (Non-GAAP) | $(12,572) | Net Revenue and Store Count by Primary Geographical Market Revenue declined across all geographic markets, accompanied by a significant reduction in the global store count - The reduction in store count is a result of deliberate closures in the U.S. and transitioning international stores to third-party distributors[43] Net Revenue by Geography (in thousands) | Region | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | United States | $28,649 | $36,627 | | International | $11,036 | $14,955 | | Total | $39,685 | $51,582 | Store Count Trend | Region | June 30, 2023 | June 30, 2024 | June 30, 2025 | | :--- | :--- | :--- | :--- | | United States | 44 | 32 | 21 | | International | 18 | 11 | 3 | | Total | 62 | 43 | 24 |