Bark(US:BARK)2025-08-07 13:30Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $102.9 million, exceeding guidance of $99 million to $101 million, driven by strong performance in both B2C and Commerce segments [15][23] - Adjusted EBITDA was positive at $100,000, a modest improvement despite external headwinds [20][23] - D2C gross margin reached a record 69.3%, up over 400 basis points year over year [18] Business Line Data and Key Metrics Changes - D2C revenue was $89.2 million, with Bark Air contributing $2.3 million, a 300% increase from last year [5][18] - The Commerce segment generated $13.7 million, a 50% increase year over year, supported by expanded distribution with partners like Amazon and Chewy [17][12] - The product mix shifted, with SuperTure accounting for roughly two-thirds of new subscribers, positively impacting average order value and gross margin [6][16] Market Data and Key Metrics Changes - The retail business saw revenue increase to approximately $14 million, up almost 50% year over year, as the company expanded its retail footprint [12][17] - The company anticipates that Commerce will represent 25% to 30% of revenue in Q2 2026 [22] Company Strategy and Development Direction - The company aims to remain adjusted EBITDA positive while diversifying beyond subscription boxes [4][23] - A new brand platform, Spark, was introduced to deepen emotional connections with customers and enhance brand awareness [8] - The upcoming Bark in the Belly consumables line is expected to unify product offerings and support the company's mission to help dogs in need [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and execution despite ongoing macroeconomic uncertainties and tariff volatility [21][23] - The company is focused on profitable diversified growth and expects to build on Q1 revenue in the coming quarters [13][23] Other Important Information - The company ended the quarter with $85 million in cash, down $9 million from Q4, reflecting inventory build and share repurchases [20] - Marketing expenses were reduced by 25% year over year, allowing for a focus on higher quality customer acquisition [19] Q&A Session Summary Question: What factors influence the EBITDA guidance range for Q2? - Management indicated that timing related to tariffs and operating expenses could affect overall profit performance, leading to a wide guidance range [25][26] Question: What drove stronger subscriber trends in Q1 with low advertising spend? - Management attributed the growth to ongoing experimentation with ad formats and a focus on acquiring higher quality customers, resulting in a shift towards premium offerings [32][33] Question: How should revenue contribution from diversification initiatives be viewed for the back half of the year? - Management expects the Commerce business to represent over 30% of overall revenue within a couple of years, with Bark Air's contribution anticipated to increase to 2-3% of total revenue [34][36]