Smartbird, Inc.
For the period ended Jun 30, 2026. Filed Aug 19, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 19, 2026
BIRD$1.31+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001628280-26-035302
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-19.
0001437749-26-028446
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 102 current paragraphs.
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Tables are not compared: 11 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (68)
Current report
Smartbird, Inc. ("Smartbird" or the "Company") delivers dedicated AI infrastructure, giving organizations the performance, control, and security of a private AI cluster without requiring them to build, operate, or maintain the underlying infrastructure (the "AI Infrastructure Business"). Smartbird manages the entire lifecycle, from procurement and deployment to operations and hardware refreshes, so customers can focus on AI workloads, not AI infrastructure. The Company addresses the needs of a growing segment of customers looking for more control over their own AI infrastructure, including enterprises in healthcare, pharma, financial services and public-sector agencies.
Current report
The Company, doing business as Allbirds, Inc., historically operated a lifestyle footwear and apparel brand (the "historical footwear business"). During the second quarter, the Company sold certain assets and liabilities used to operate the historical footwear business (the "Asset Sale") to a third party, and as of June 30, 2026, the Company no longer operated the historical footwear business. Current period and historical operating results related to the historical footwear business are presented as discontinued operations.
Current report
During the six months ended June 30, 2026, our revenue was generated through the lease of AI Infrastructure. Revenue, under our current sales-type lease, is recognized when we satisfy our performance obligation by transferring control of the assets to the customer.
Current report
In future periods, we expect net revenue to be primarily generated from selling and leasing access to our AI infrastructure platforms, by providing infrastructure services and managed services.
Current report
Our business model focuses on delivering high-performance, dedicated AI infrastructure platforms tailored to the specific technical and compliance requirements of customers that require high performance and reliable infrastructure to run specialized AI workloads securely, including enterprises in sectors such as healthcare, pharma, and defense.
Current report
Our infrastructure platforms are designed as comprehensive environments that integrate compute, storage, and networking to support the full AI lifecycle, from training and fine-tuning to production-scale inference. Customers have the flexibility to customize their deployed environments to maximize performance, cost, and efficiency. In addition to the infrastructure services, managed services and software services are available to customers to help them manage and monitor their infrastructure environments.
Current report
Unlike cloud providers that build ahead of demand, our strategy is demand-led; infrastructure deployments are tied to customer orders, which minimizes capital expenditure risk and eliminates speculative infrastructure build-out.
Current report
We do not intend to offer on-demand "pay-as-you-go" pricing. Instead, customers rent or lease the entire dedicated cluster, providing them with predictable economics, and control over their AI workloads. We expect our customers to purchase our services primarily through committed contracts, ranging from several months to 5 years, where the customer is provided with reserved capacity access over the contract term at a fixed price regardless of utilization. Revenue will be recognized as services are provided under these dedicated capacity contracts.
Current report
Operating costs and expenses
Current report
Costs of Net Revenue
Current report
As of June 30, 2026, costs of net revenue consisted of the cost of AI Infrastructure leased in the period. In future periods, we expect costs of net revenue to primarily consist of expenses associated with building dedicated AI Infrastructure platforms and providing related services. These costs include the procurement and hosting of high-performance computing, networking, and storage hardware and the leasing of specialized data center footprint necessary to host our infrastructure platforms. Additionally, cost of net revenues will include personnel-related expenses for our engineering and operations teams who are responsible for the build out and ongoing management, security, and optimization of these environments for our customers.
Current report
As of June 30, 2026, interest income is generated based on a customer lease of AI Infrastructure.
Current report
Interest expense consists of contractual interest costs associated with our outstanding Convertible Notes.
Current report
Loss on fair market value of debt consists of the fair valuation adjustment associated with our outstanding Convertible Notes.
Current report
Other expense, net, primarily consists of costs related to the debt discounts and issuance costs associated with our outstanding Convertible Notes.
Current report
Loss from Discontinued Operations
Current report
Loss from discontinued operations consists of the net financial results associated with the historical footwear business, which was sold and ceased operations during the quarter ended June 30, 2026 and represented a strategic shift that had a material impact on operating results. Prior period amounts have been adjusted from those reported to reflect discontinued operations.
Current report
Operating Costs and Expenses
Current report
Costs of net revenue
Current report
Costs of net revenue increased by $2.8 million for the three months ended June 30, 2026 as compared to the same period in 2025, as the Company did not operate the AI Infrastructure Business in the prior period.
Current report
Selling, general, and administrative expense increased by $5.6 million, or 111%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily driven by increased legal and other corporate outside services, increases in stock-based compensation expense, and increases in other operating expenses associated with the AI Infrastructure Business, our ongoing operations, which the Company did not operate in the prior period.
Current report
Interest income increased by $0.4 million for the three months ended June 30, 2026 as compared to the same period in 2025, as the Company did not operate the AI Infrastructure Business, our ongoing operations, in the prior period.
Current report
Interest expense increased by $1.5 million for the three months ended June 30, 2026 as compared to the same period in 2025. The change was due to interest expense recorded on the Convertible Notes issued during the current period.
Current report
Loss on fair market value of debt increased by $0.2 million for the three months ended June 30, 2026 as compared to the same period in 2025. The change was due to the fair market value adjustment on our Convertible Notes.
Current report
Other expense increased by $0.5 million for the three months ended June 30, 2026 as compared to the same period in 2025. The change was due to the issuance costs associated with our Convertible Notes.
Current report
Discontinued Operations
Current report
Loss from discontinued operations before gain from disposal, net of tax increased by $14.7 million, or 142.7%, for the three months ended June 30, 2026 as compared to the same period in 2025, related to the operation of the historical footwear business during the quarter, primarily due to lower gross profit, driven by fewer days of sales and a reduction in marketing and promotional activities, and a loss on debt extinguishment.
Current report
Gain from disposal of discontinued operations increased by $21.6 million for the three months ended June 30, 2026 as compared to the same period in 2025, related to the gain on the Asset Sale completed during the quarter.
Current report
Comparison of the Six Months Ended June 30, 2026 and 2025
Current report
Net revenue increased by $2.8 million for the six months ended June 30, 2026 as compared to the same period in 2025, as the Company did not operate the AI Infrastructure Business, our ongoing operations, in the prior period.
Current report
Operating Costs and Expenses
Current report
Costs of net revenue
Current report
Costs of net revenue increased by $2.8 million for the six months ended June 30, 2026 as compared to the same period in 2025, as the Company did not operate the AI Infrastructure Business, our ongoing operations, in the prior period.
Current report
Selling, general, and administrative expense increased by $4.2 million, or 34.1%, for the six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily driven by increased legal and other corporate outside services, increases in stock-based compensation expense, and increases in other operating expenses associated with the AI Infrastructure Business, our ongoing operations, which the Company did not operate in the prior period.
Current report
Interest income increased by $0.1 million for the six months ended June 30, 2026 as compared to the same period in 2025, as the Company did not operate the AI Infrastructure Business, our ongoing operations, in the prior period.
Current report
Interest expense increased by $1.5 million for the six months ended June 30, 2026 as compared to the same period in 2025. The change was due to interest expense recorded on our Convertible Notes issued during the current period.
Current report
Loss on fair market value of debt increased by $0.2 million for the six months ended June 30, 2026 as compared to the same period in 2025. The change was due to the fair market value adjustment on our Convertible Notes.
Current report
Other expense increased by $0.5 million for the six months ended June 30, 2026 as compared to the same period in 2025. The change was due to the issuance costs associated with our Convertible Notes.
Current report
Discontinued Operations
Current report
Loss from discontinued operations before gain from disposal, net of tax increased by $15.0 million, or 60.6%, for the six months ended June 30, 2026 as compared to the same period in 2025, related to the operation of the historical footwear business during the quarter, primarily due to lower gross profit, driven by fewer days of sales and a reduction in marketing and promotional activities, and a loss on debt extinguishment.
Showing the first 40 of 68 passages. Open the source sections for the rest.
Removed paragraphs (91)
Previous report
Allbirds has historically been a lifestyle footwear and apparel brand. As of March 31, 2026, we generated our revenue via sales of footwear and apparel products, primarily through our direct business, a digitally-led vertical retail distribution strategy. We generally market directly to consumers via our localized digital platform. During the quarter ended March 31, 2026, we closed our remaining full-price retail stores in the United States, and as of March 31, 2026, continued to operate two outlet stores in the United States and two full-price stores in London. In addition to our direct business, we selectively partner with third parties, including distributors and retailers, to sell our products through their channels, which helps us reach more consumers and increase brand awareness.
Previous report
Financial Highlights
Previous report
•We generated net revenue of $22.3 million and $32.1 million for the three months ended March 31, 2026 and 2025, respectively.
Previous report
•Our gross margin was 27.8% and 44.8% for the three months ended March 31, 2026 and 2025, respectively.
Previous report
•We generated net loss of $20.7 million and $21.9 million for the three months ended March 31, 2026 and 2025, respectively.
Previous report
•We generated adjusted EBITDA loss of $17.2 million and $18.6 million for the three months ended March 31, 2026 and 2025, respectively.
Previous report
Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles in the United States, or GAAP. See the section titled “Non-GAAP Financial Measures” below for the definition of adjusted EBITDA, as well as a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
Previous report
Recent Developments
Previous report
Our performance in the fourth quarter of 2025 did not meet our net revenue expectations. We have been operating the footwear and apparel business at a material loss and do not believe that continuing to operate this business is sustainable or beneficial to our stockholders. In the first quarter of 2026, we closed our remaining full-price stores in the United States, which also resulted in a reduction in force. As of March 31, 2026, we operated two factory outlet stores in the United States and two stores in the United Kingdom.
Previous report
On March 29, 2026, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Allbirds IP LLC, an affiliate of American Exchange Group (the “Buyer” and the transactions contemplated by the Asset Purchase Agreement, the “Asset Sale”), pursuant to which the Buyer will acquire substantially all of the Company’s assets related to its existing footwear business (the “Purchased Assets”). The Purchased Assets represent a all revenue generating assets of the Company. We have been operating these footwear assets at a material loss and do not believe that continuing to operate these footwear assets is sustainable or beneficial to our stockholders. Following the closing of the Asset Sale, the Buyer in the Asset Sale will own the “Allbirds” tradename and all related intellectual property, and the brand and footwear business will continue under the stewardship of the Purchaser.
Previous report
We intend to continue operating Allbirds, Inc. after the Asset Sale. In continuing to operate after the Asset Sale, we intend to rename Allbirds, Inc., and operate under a new corporate name. Our Board of Directors has not yet made a final decision on a new name for the company. With respect to the renamed corporate entity, we are investigating potential opportunities in the computing infrastructure market, including (either directly or through its subsidiaries) the acquisition and monetization of graphics processing units, related high-performance computing infrastructure capable of supporting high workloads (whether from artificial intelligence and machine learning or other needs of potential future customers) and other related assets (which we refer to collectively, as “Electronics Assets,” and such anticipated business, the “Electronics Infrastructure Business”). In support of such business, we have entered into an agreement to sell up to $50 million in senior secured convertible notes (the “Convertible Notes,” and the facility governing such notes, the “Facility”), the proceeds of which would permit the Company to purchase Electronics Assets and develop and expand the anticipated Electronics Infrastructure Business. Using proceeds from the initial tranche of the Convertible Notes, the Company, through its wholly owned subsidiary (the “Lessor”), has purchased server equipment utilizing current-generation NVIDIA Blackwell GPUs (the “Purchased GPU Assets”). Simultaneously, the Lessor entered into an approximately $2.75 million, three-year lease agreement with a subsidiary of QumulusAI, Inc. (the “Lessee”) for the Purchased GPU Assets, with an end-of-term purchase option provided to the Lessee.
Previous report
See Note 1, Description of Business and Note 13, Subsequent Events, of our condensed consolidated financial statements included in Part I, Item 1, for more information.
Previous report
Key Factors Affecting Our Performance
Previous report
Our financial and operating conditions have been, and will continue to be, affected by a number of factors, including the following:
Previous report
Recent financial performance, including a net loss of $20.7 million and net cash used in operating activities of $12.1 million in the three months ended March 31, 2026, has raised substantial doubt about the Company’s ability to continue as a going concern. Refer to the section titled Liquidity and Capital Resources and Note 2 to the condensed consolidated financial statements included in Part I, Item 1, for additional information.
Previous report
Net Revenue
Previous report
We generate net revenue primarily from sales of our footwear and apparel products. We sell products directly through our own digital channels (including our websites and marketplace platforms), our leased retail stores, and third-party retailers and distributors. As of March 31, 2026, the majority of our sales are through our direct channels. Revenue is recognized when we satisfy our performance obligation by transferring control of the promised goods to the customer, net of allowances for returns, discounts, and any taxes collected from customers. This occurs either upon shipment or upon receipt, depending on the terms of sale.
Previous report
Cost of Revenue
Previous report
Cost of revenue consists primarily of the cost of purchased inventory, inbound and outbound shipping costs, import duties, distribution center and related equipment costs, and inventory write-downs or write-offs. Shipping costs to receive products from our suppliers are included in the cost of inventory and recognized as cost of revenue upon the sale of products to our customers. We generally expect our cost of revenue to decrease or increase in absolute dollars in line with net revenue fluctuations.
Previous report
Gross Profit and Gross Margin
Previous report
Gross profit represents net revenue less the cost of revenue. Gross margin is gross profit expressed as a percentage of net revenue. Our gross margin may fluctuate from period to period based on a number of factors, including business outcomes, the mix of products we sell in different geographies and channels, price changes, promotional activities, the innovation initiatives we undertake in each product category, cost drivers (including commodity prices, transportation rates, manufacturing costs), and inventory write-downs or write-offs, among other factors.
Previous report
Operating Expense
Previous report
Selling, General, and Administrative Expense
Previous report
Marketing Expense
Previous report
Marketing expense consists of advertising costs incurred to acquire new customers, retain existing customers, and build our brand awareness.
Previous report
Impairment Expense
Previous report
Impairment expense consists of charges when the carrying value of our assets exceed their fair market value, primarily related to right of use assets and fixed assets.
Previous report
Restructuring Expense
Previous report
Restructuring expense consists of professional service fees, severance and other employee-related benefits, and other miscellaneous costs associated with exit and disposal activities.
Previous report
Interest (Expense) Income
Previous report
Interest (expense) income primarily consists of interest expense associated with our credit agreements, including with Second Avenue Capital Partners as of and after June 30, 2025 and with JPMorgan Chase Bank, N.A for all prior periods, partially offset by interest income generated from our cash and cash equivalents. We expect interest income and expense to fluctuate based on our credit line utilization, future bank balances, and the interest rate environment.
Previous report
Other Income
Previous report
Other income consists of gains or losses on lease terminations and modifications, gains or losses on foreign currency, gains or losses on sales of property and equipment, and changes in the fair value of our equity investments.
Previous report
Income Tax Provision
Previous report
(1)Includes stock-based compensation expense of $1.2 million and $2.3 million for the three months ended March 31, 2026 and 2025, respectively.
Previous report
(2)Includes depreciation and amortization expense of $1.4 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.
Previous report
Net Revenue
Previous report
Net revenue decreased by $9.8 million, or 30.5%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily driven by a decrease in our U.S. direct business of $7.6 million, primarily driven by declines in our e-commerce and retail channels, due to lower unit sales at lower average selling prices, and retail store closures. Net revenue also declined in our international business by $2.3 million, primarily due to lower distributor net revenue and international distributor transitions.
Previous report
Cost of revenue decreased by $1.6 million, or 9.0%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily attributable to fewer unit sales in our U.S. direct business, partially offset by the net impact of inventory adjustments and higher duty costs.
Previous report
Gross profit decreased by $8.2 million, or 56.9%, for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in gross profit was driven by the decreases in net revenue and cost of revenue.
Showing the first 40 of 91 passages. Open the source sections for the rest.
Reworded paragraphs (9)
Previous wording
Selling, general, and administrative expense (“SG&A expense”) consists of personnel and related costs including salaries, benefits, bonuses, and stock-based compensation for our corporate and retail employees, third-party professional fees, information technology, payment processing fees, fixed and variable lease costs for corporate offices and retail stores, depreciation and amortization, software costs, legal fees, and other administrative costs associated with operating the business.
Current wording
Selling, general, and administrative expense ("SG&A expense") consists of personnel and related costs including salaries, benefits, bonuses, and stock-based compensation, third-party professional fees, information technology, advertising and marketing expenses, software costs, legal fees, and other administrative costs associated with operating the business.
Previous wording
Our provision for income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We record deferred tax assets and liabilities based on differences between the book and tax bases of assets and liabilities. The deferred tax assets and liabilities are calculated by applying enacted tax rates and laws to taxable years in which such differences are expected to reverse. Because we have a recent history of pre-tax book losses and are expected to be in a pre-tax book loss position in the near term, a valuation allowance was maintained against the deferred tax assets in all jurisdictions other than in the United Kingdom as of March 31, 2026.
Current wording
Our provision for income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we previously conducted business. We record deferred tax assets and liabilities based on differences between the book and tax bases of assets and liabilities. The deferred tax assets and liabilities are calculated by applying enacted tax rates and laws to taxable years in which such differences are expected to reverse. Because we have a recent history of pre-tax book losses and are expected to be in a pre-tax book loss position in the near term, a valuation allowance was maintained against the deferred tax assets in all jurisdictions other than in the United Kingdom as of June 30, 2026.
Previous wording
For the three months ended March 31, 2026 and 2025:
Current wording
Net revenue increased by $2.8 million for the three months ended June 30, 2026 as compared to the same period in 2025, as the Company did not operate the AI Infrastructure Business, our ongoing operations, in the prior period.
Previous wording
Income tax provision increased by $13 thousand, or 19.7%, for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to a change in the mix of taxable income in foreign jurisdictions that resulted in differences in the effective tax rates for the comparative period.
Current wording
Income tax provision decreased by $0.1 million, or 65.3%, for the six months ended June 30, 2026 as compared to the same period in 2025, primarily due to a change in the mix of taxable income in foreign jurisdictions that resulted in differences in the effective tax rates for the comparative period.
Previous wording
This Quarterly Report on Form 10-Q and accompanying financial tables include references to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under GAAP, are useful to investors as they are widely used measures of performance, and the adjustments we make to these non-GAAP financial measures provide investors further insight into our profitability and additional perspectives in comparing our performance to other companies and in comparing our performance over time on a consistent basis. These non-GAAP financial measures should not be considered as alternatives to net loss or net loss margin as calculated and presented in accordance with GAAP.
Current wording
This Quarterly Report on Form 10-Q and accompanying financial tables includes references to adjusted EBITDA, which is a non-GAAP financial measure. We believe that this non-GAAP financial measure, when reviewed in conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under GAAP, is useful to investors as it is a widely used measure of performance, and the adjustments we make to this non-GAAP financial measure provides investors further insight into our profitability and additional perspectives in comparing our performance to other companies and in comparing our performance over time on a consistent basis. This non-GAAP financial measure should not be considered as alternatives to net income or loss as calculated and presented in accordance with GAAP.
Previous wording
Adjusted EBITDA is defined as net loss before stock-based compensation expense, depreciation and amortization expense, impairment expense, restructuring expense (consisting of professional fees, personnel and related expenses, and other related charges resulting from our strategic initiatives), non-cash gains or losses on the sales of businesses relating to our strategic initiatives, other income or expense (consisting of consisting of non-cash gains or losses on foreign currency, non-cash gains or losses on sales of property and equipment, and non-cash gains or losses on modifications or terminations of leases), interest income or expense, and income tax provision or benefit.
Current wording
Adjusted EBITDA is defined as net income or loss before stock-based compensation expense, depreciation and amortization expense, net income or loss from discontinued operations, interest income or expense, and income tax provision or benefit.
Previous wording
Further, other companies, including companies in our industry, may calculate these non-GAAP financial measures differently, which reduces their usefulness as comparative measures. Because of these limitations, we consider, and investors should consider, these non-GAAP financial measures together with other operating and financial performance measures presented in accordance with GAAP.
Current wording
Further, other companies, including companies in our industry, may calculate this non-GAAP financial measure differently, which reduces its usefulness as a comparative measure. Because of these limitations, we consider, and investors should consider, this non-GAAP financial measure together with other operating and financial performance measures presented in accordance with GAAP.
Previous wording
As of March 31, 2026, we had cash and cash equivalents of $14.4 million. Following our IPO in 2021, we have funded our operations primarily from the sale of our products and recently through borrowings under our Credit Agreement. Management’s evaluation of the Company’s ability to continue as a going concern for the twelve-month period following the date on which the financial statements are available for issuance indicated certain negative conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern, including a net loss of $20.7 million and net cash used in operating activities of $12.1 million in the three months ended March 31, 2026. As of March 31, 2026, the Company had $14.4 million in cash and cash equivalents and $17.4 million outstanding on its Credit Agreement. The Company expects to continue to incur net losses and negative cash flows from operating activities following the Asset Sale as defined in the Recent Developments section above. Additionally, the cash flows for the Company’s Asset Infrastructure Business are uncertain. If the
Current wording
As of June 30, 2026, we had cash and cash equivalents of $37.4 million.
Previous wording
As of March 31, 2026, there have been no changes to our critical accounting estimates as discussed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the Form 10-K.
Current wording
Aside from those referenced in the preceding paragraph, as of June 30, 2026, there have been no changes to our critical accounting estimates as discussed under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates" in the Form 10-K.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Income tax provision changed to a benefit of $28 thousand from an expense of $81 thousand for the three months ended June 30, 2026 as compared to the same period in 2025, primarily due to a change in the mix of taxable income in foreign jurisdictions that resulted in differences in the effective tax rates for the comparative period.