[Management View]
BARK reported total revenue of $107 million, exceeding the high end of its guidance range, driven by strong Direct to Consumer (DTC) results and a modest commerce timing benefit. Adjusted EBITDA was negative $1.4 million, reflecting a $1 million incremental investment in growth opportunities. The company achieved a debt-free status by fully repaying its $45 million convertible note and extending its $35 million credit facility with Western Alliance Bank.

[Outlook]
BARK projects total revenue of $101 million to $104 million and adjusted EBITDA between negative $5 million and negative $1 million for the third quarter. The company plans to improve gross margins through product sourcing shifts and price increases. Participation in the Girl Scouts’ annual cookie program is expected to boost brand awareness.

[Financial Performance]
- Total revenue: $107 million (exceeded guidance)
- Adjusted EBITDA: Negative $1.4 million (within guidance)
- Commerce segment revenue: $24.8 million (up 6% YoY)
- BARK Air revenue: $3.6 million (up 138% YoY)
- DTC revenue excluding BARK Air: $78.5 million (declined YoY)
- Gross margin: 57.9% (down 250 basis points YoY)
- Operating expenses: Marketing expense down 18% YoY, shipping and fulfillment costs down 8%, G&A expense down over 11%
- Cash and liquidity: $63 million in cash, down $22 million sequentially

[Q&A Highlights]
Question 1: What kind of flexibility does being debt-free provide BARK? Can you invest more in the business and drive more subscriber growth?
Answer: Ending the quarter with $63 million in cash and paying off $45 million in debt without diluting shareholders or refinancing reflects our long-term confidence. We plan to continue executing our strategy, focusing on strengthening the bottom line and reinvesting in growth while being cautious due to external volatility.

Question 2: What is your level of confidence in achieving full-year profitability on an adjusted EBITDA basis?
Answer: Our goal remains to be EBITDA positive by the end of the year, despite external volatility and uncertainties, particularly regarding tariffs and consumer sentiment.

Question 3: Can you unpack the growth within the commerce business? Is it due to increased demand, more products, or more stores?
Answer: Growth is driven by expanded toy distribution across existing and new customers, increased footprint within Walmart, and growth on Amazon and Chewy. The quarter also benefited from timing shifts of orders.

Question 4: What is driving the acquisition of new subscribers at an efficient cost and improved retention?
Answer: A favorable mix of organic channels, brand activities, and shifting dollars away from meta channels. Improved retention is due to platform enhancements, returning value to customers, and acquiring higher-value loyal customers.

Question 5: Are there areas of investment or buybacks planned now that the balance sheet is in a different place?
Answer: We aim to be EBITDA breakeven for the year while investing in diversification. We will discuss long-term investments and plans for capital with our board.

Question 6: What is driving the reduction in churn and improved retention?
Answer: Platform improvements, returning value to customers, and acquiring higher-value customers through organic channels contribute to better retention.

[Sentiment Analysis]
Analysts and management maintained a cautious but optimistic tone, focusing on executing the plan and achieving profitability despite external challenges.

[Quarterly Comparison]
| Metric | Q2 2026 | Q2 2025 |
|----------------------------|---------------|---------------|
| Total Revenue | $107 million | N/A |
| Adjusted EBITDA | -$1.4 million | N/A |
| Commerce Segment Revenue | $24.8 million | N/A |
| BARK Air Revenue | $3.6 million | N/A |
| DTC Revenue (excl. BARK Air)| $78.5 million | N/A |
| Gross Margin | 57.9% | N/A |
| Marketing Expense | $15.4 million | N/A |
| Shipping and Fulfillment | $31.5 million | N/A |
| G&A Expense | $25.7 million | N/A |
| Cash and Liquidity | $63 million | N/A |

[Risks and Concerns]
- External volatility, particularly tariffs and supplier transitions
- Macroeconomic uncertainty impacting consumer sentiment
- Elevated tariff-related costs affecting gross margins

[Final Takeaway]
BARK's strategic focus on diversification and cost discipline has positioned the company for growth despite external challenges. Achieving a debt-free status and extending its credit facility enhances financial flexibility. The company remains cautiously optimistic about achieving profitability and improving gross margins through strategic initiatives and partnerships.