Bark(US:BARK)2021-11-11 02:04Financial 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]