BARK, Inc. Class A

Thank you for standing by. My name is Karen, and I will be your conference separator today. At this time, I would like to welcome everyone to the BARC First Quarter Fiscal Year 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star followed by the number one. To redraw your question, you may press star followed by the number one again. I will now turn the call over to Mike Mujets, VP of IR. Please go ahead.

Good morning, everyone. And welcome to BARC's First Quarter Fiscal Year 2026 earnings call. Joining me today are Matt Meeker, co-founder and chief executive officer, and Zahir Ibrahim, chief financial officer. Today's conference call is being webcast in its entirety on our website, and a replay of the webcast will be made available shortly after the call. Additionally, a press release covering the company's financial results was issued this morning and can be found at our investor relations website. Before I pass it over to Matt, I wanna remind you of the following information regarding forward-looking statements. The statements made on today's call are based on management's current expectations and are subject to risks and uncertainties that could cause actual future results and outcomes to differ. Please refer to our SEC filings for more information on some of the factors that could affect our future results and outcomes. We will also discuss certain non-GAAP financial measures on today's call. Reconciliation of our non-GAAP financial measures is also contained in this morning's press release. And with that, let me now pass it over to Matt.

Thanks, Mike, and good morning, everyone. On our last earnings call, following our first full year of positive adjusted EBITDA, I laid out two key priorities for fiscal 2026, remain adjusted EBITDA positive despite macro uncertainty and accelerate diversification beyond subscription boxes. On both fronts, we're off to a strong start. We delivered $103 million of revenue well above our guidance with over $16 million coming from non D to C sources, which is nearly double from last year. And we've delivered positive adjusted EBITDA for the quarter improving by nearly $2 million from last year. In D to C, we delivered $89.2 million in revenue, 2.3 million of that came from Bark Air, a 300% improvement from last year and our first quarter breaking the $2 million mark. More importantly, we maintained a 99% five-star rating, our clear signal that we're solving a real problem for dog parents around the world. This is still an early stage business, but the demand is real. The experience is resonating and the team is performing well. The bulk of the D to C business was driven by our subscription business, which saw a strong new subscriber acquisition and lower marketing spend and better than expected retention. One of the most notable shifts this quarter was in product mix. Last year, about two thirds of new customers chose BarkBox over SuperTure. This quarter, that ratio flipped with SuperTure accounting for roughly two thirds of new subscribers. The higher price associated with that product was also a tail end of both average order value and D to C gross margin, which came in at 67%, up 250 basis points year over year and our strongest D to C margin quarter ever. That's one way we can grow AOV and margin in D to C, but the far bigger opportunity is in cross selling our customers. Now that we're fully on the Shopify platform with our new line of consumables coming in a few weeks, cross sell revenue should be an important driver of revenue, AOV and margin growth going forward for years to come. I'm also excited to announce that we introduced a new brand platform last month. Bark is now co-owned by dogs. This isn't just a one-off campaign. It's a long-term initiative to grow awareness, deepen the emotional connection we have with our customers and reinforce our position as the world's most dog-centric company. It launched with updated company visuals, added subscriber perks and even our first ever chair dog, a real dog in a real leadership role representing the voice of dogs everywhere. We kicked it off last month across social and blog channels, and there's more coming as we approach National Dog Day in August. Speaking of National Dog Day, we'll also debut our new consumables line, Bark in the Belly. This initiative is important for two reasons. First, it unifies the look and feel of our entire consumables line, which is especially important as we expand in retail and continue building brand recognition across Isles domestically and internationally. And second, it gives us a powerful mission-driven hook. All profits from our Kibble line will go to feeding dogs in need. The idea is simple. If you can buy healthy and affordable food for your dog and help feed other dogs at the same time, we believe that's a compelling reason to choose Bark. And just to clarify, the donations will apply to only our Kibble line, not treats, dental, toys, or other consumables. We're excited about what Bark in the Belly can become, not just as a product line, but as another way we live out our mission to make all dogs happy. This line will go live in a few weeks and will be available on bark.co, as well as Chewy and Amazon. We also anticipate a mix of these products to begin making their way onto brick and mortar shelves in the spring of next year when most of our retail partners do their shelf resets. On that note, our commerce or retail business remains a big growth driver for us this quarter. Revenue came in at approximately $14 million, up almost 50% year over year as we continue to expand our retail footprint, both in-store and online across partners like Walmart, Costco, Target, TJX, Chewy, and Amazon. This is a strong start to the year. As we move through fiscal 2026 and beyond, our long-term strategy is becoming more tangible and more scalable. Whether it's in the box, in the air, or in the Belly, we're building Bark to show up in new ways, across new channels, and for more dog parents than ever before. Each of these businesses reinforces the others. They deepen our brand, expand our reach, and unlock new ways to deliver on our mission to make all dogs happy. Finally, delivering another quarter of positive, adjusted EBITDA, even in a challenging environment, shows that the structural improvements we've made over the past few years are holding. Our supply chain team responded to the unpredictable tariff environment, and we've come away with better costs and more diversification to handle further changes. We should see those results showing up in the back half of the year in a meaningful way. This all gives us confidence we'll build on our revenue from this quarter going forward, and we're on track to be adjusted EBITDA positive for the full year and beyond. And with that, I'll hand it over to Zaheer.