Allbirds, Inc.
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
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.
Sep 30, 2025 · Filed Nov 7, 2025
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 2025-06-30; filed 2025-08-08.
0001653909-25-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001628280-25-050327
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 127 previous paragraphs and 136 current paragraphs.
75 unchanged; 42 reworded; 18 added; 8 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 previous and 20 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 (18)
Current report
For the three and nine months ended September 30, 2025 and 2024:
Current report
•Our gross margin was 43.2% and 42.7% for the three and nine months ended September 30, 2025, respectively, as compared to 44.4% and 47.5% for the same periods in 2024.
Current report
Interest (Expense) Income
Current report
Our gross margin decreased to 43.2% for the three months ended September 30, 2025 from 44.4% in the same period in 2024, primarily reflects a higher mix of digital and international distributor sales, as well as increased duties in our U.S. business, which offset higher average selling price.
Current report
NM = Not meaningful
Current report
Marketing expense increased by $1.9 million, or 18.9%, for the three months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily driven by increased digital advertising costs in support of new product launches.
Current report
Impairment Expense
Current report
Impairment expense increased by $0.7 million for the three months ended September 30, 2025 as compared to $0.0 million the same period in 2024. The increase was driven by impairments of an internal-use software asset and the impairment of an equity investment in the current period, compared to no impairment in the prior period.
Current report
Interest (Expense) Income
Current report
Interest (expense) income changed by $1.1 million, or 149.7%, from income to expense, for the three months ended September 30, 2025 as compared to the same period in 2024. The change was primarily driven by increased interest expense relating to our Credit Agreement, partially offset by interest income.
Current report
Comparison of the Nine Months Ended September 30, 2025 and 2024
Current report
Our gross margin declined to 42.7% for the nine months ended September 30, 2025 from 47.5% for the same period in 2024, primarily due to mix, with a lower percentage of sales coming from our retail business and a higher percentage coming from our digital and distributor channels, as well as increased promotional activities and higher inventory adjustments.
Current report
NM = Not meaningful
Current report
Impairment Expense
Current report
Impairment expense increased by $0.7 million for the nine months ended September 30, 2025 as compared to $0.0 million in the same period in 2024. The increase was driven by impairments of an internal-use software asset and the impairment of an equity investment in the current period, compared to no impairment in the prior period.
Current report
Interest Income
Current report
As of September 30, 2025, we had cash and cash equivalents of $23.7 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 facility. However, we expect to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. In order to have sufficient liquidity to support our operations during the next twelve months, we will need to continue to deliver on our business plan, strategically use our existing debt and equity facilities, reduce costs, including reducing our retail store footprint, and continue to work with our advisers to explore supplemental debt and equity financing opportunities and evaluate strategic transactions to advance the Allbirds business. See
Current report
In June 2025, we entered into an “at-the-market offering” (“ATM”) program with TD Securities (USA) LLC (“TD Cowen”), pursuant to which we may offer and sell, from time to time, through TD Cowen or its affiliates, acting as sales agents, shares of our common stock having an aggregate offering price of up to $50 million. Under the ATM, the sales agents may sell shares by any method deemed to be an “at-the-market offering.” During the three months ended September 30, 2025, there was no activity pursuant to the ATM.
Removed paragraphs (8)
Previous report
For the three and six months ended June 30, 2025 and 2024:
Previous report
•Our gross margin was 40.7% and 42.6% for the three and six months ended June 30, 2025, respectively, as compared to 50.5% and 49.0% for the same periods in 2024.
Previous report
Our gross margin decreased to 40.7% for the three months ended June 30, 2025 from 50.5% in the same period in 2024, primarily due to increased promotional activity, inventory adjustments primarily associated with the transition of the European market to a distributor, a higher mix of business from international distributors and a lower mix from retail stores, and increased per unit freight and duty costs in our direct business.
Previous report
Marketing expense decreased by $3.2 million, or 27.4%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by reduced digital advertising costs.
Previous report
Comparison of the Six Months Ended June 30, 2025 and 2024
Previous report
Our gross margin declined to 42.6% for the six months ended June 30, 2025 from 49.0% for the same period in 2024, primarily due to increased promotional activity, a higher mix of business from international distributors and a lower mix from retail stores, increased inventory adjustments, and increased per unit freight and duty costs in our direct business. These factors were partially offset by gift card breakage.
Previous report
As of June 30, 2025, we had cash and cash equivalents of $33.1 million. Our operations have been funded primarily through cash flows from the sale of our products and net proceeds from sales of equity securities, including our IPO in 2021.
Previous report
We believe our existing cash and cash equivalent balances, cash flow from operations, and amounts available for borrowing under our Credit Agreement, will be sufficient to meet our cash requirements over the next 12 months. Our longer-term expected future cash requirements and obligations will necessitate continuing availability of funding from equity securities and debt offerings, and ultimately achieving positive results from operations.
Reworded paragraphs (42)
Previous wording
We generate 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 and our physical footprint of 24 stores as of June 30, 2025. 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.
Current wording
We generate 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 and our physical footprint of 23 stores as of September 30, 2025. 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 wording
•We generated net revenue of $39.7 million and $71.8 million for the three and six months ended June 30, 2025, respectively, as compared to $51.6 million and $90.9 million for the same periods in 2024.
Current wording
•We generated net revenue of $33.0 million and $104.8 million for the three and nine months ended September 30, 2025, respectively, as compared to $43.0 million and $133.9 million for the same periods in 2024.
Previous wording
•We generated net loss of $15.5 million and $37.4 million for the three and six months ended June 30, 2025, respectively, as compared to a net loss of $19.1 million and $46.5 million for the same periods in 2024.
Current wording
•We generated net loss of $20.3 million and $57.7 million for the three and nine months ended September 30, 2025, respectively, as compared to a net loss of $21.2 million and $67.6 million for the same periods in 2024.
Previous wording
•We generated adjusted EBITDA loss of $12.6 million and $31.2 million for the three and six months ended June 30, 2025, respectively, as compared to adjusted EBITDA loss of $13.7 million and $34.6 million for the same periods in 2024.
Current wording
•We generated adjusted EBITDA loss of $15.7 million and $46.9 million for the three and nine months ended September 30, 2025, respectively, as compared to adjusted EBITDA loss of $16.2 million and $50.9 million for the same periods in 2024.
Previous wording
As we continue to scale and build our global brand awareness, our goal is to acquire new customers in a cost-effective way. We will continue to evaluate our go-to-market strategy, both in the U.S. and internationally, and invest in customer acquisition while the underlying customer unit economics indicate the return on investment is strong. The continued execution of our customer acquisition strategy is key to acquiring more customers and driving growth and profitability for our business. Our ability to acquire more customers depends significantly on a number of factors, including the level and pattern of consumer spending in the product categories in which we operate and our ability to expand our brand awareness. We also partner with select third-party retailers and distributors to sell our products in our effort to reach more consumers and build brand awareness.
Current wording
Our goal is to acquire new customers in a cost-effective way. We will continue to evaluate our go-to-market strategy, both in the U.S. and internationally, and invest in customer acquisition while the underlying customer unit economics indicate the return on investment is strong. The continued execution of our customer acquisition strategy is key to acquiring more customers and driving growth and profitability for our business. Our ability to acquire more customers depends significantly on a number of factors, including the level and pattern of consumer spending in the product categories in which we operate and our ability to expand our brand awareness. We also partner with select third-party retailers and distributors to sell our products in our effort to reach more consumers and build brand awareness.
Previous wording
Our long-term growth strategy relies on our ability to grow across our digital and retail channels, while still maintaining our goal of long-term profitability. We believe an omni-channel buying experience is important to meeting the needs of our customer base. Although we continue to view retail stores as key to reaching new customers and increasing penetration of omni-channel customers, we plan to try to optimize our store fleet and focus on ensuring that our retail stores are efficiently driving customer acquisition. In 2024, we closed 15 stores in the United States and 3 stores in Europe. In the first half of 2025 we closed 9 stores in the United States. In 2023, 2024, and 2025 we transitioned the operations of our international businesses, including international stores, to distributor partners in South Korea, Canada, Australasia, Japan, China, and Europe. As of December 31, 2024, we do not operate any stores in those geographies. Our remaining stores are located in the United States and the United Kingdom.
Current wording
We believe an omni-channel buying experience is important to meeting the needs of our customer base. Although we continue to view retail stores as key to reaching new customers and increasing penetration of omni-channel customers, we plan to try to optimize our store fleet and focus on ensuring that our retail stores are efficiently driving customer acquisition, while also selectively partnering with third-party retailers. In 2024, we closed 15 stores in the United States and 3 stores in Europe. In the first three quarters of 2025 we closed 9 stores in the United States and 1 store in the United Kingdom. In 2023, 2024, and 2025 we transitioned the operations of our international businesses, including international stores, to distributor partners in South Korea, Canada, Australasia, Japan, China, and Europe. As of December 31, 2024, we do not operate any stores in those geographies. Our remaining stores are located in the United States and the United Kingdom.
Previous wording
2 In the third quarter of 2023, we transitioned the operations of three international stores to distributors. In the second quarter of 2024, we transitioned the operations of two stores in Japan and one store in New Zealand to unrelated third-party distributors and closed one store in Europe. In the third quarter of 2024, we transitioned the operations of six stores in China to an unrelated third-party distributor and closed two stores in Europe.
Current wording
2 In the third quarter of 2023, we transitioned the operations of three international stores to distributors. In the second quarter of 2024, we transitioned the operations of two stores in Japan and one store in New Zealand to unrelated third-party distributors and closed one store in Europe. In the third quarter of 2024, we transitioned the operations of six stores in China to an unrelated third-party distributor and closed two stores in Europe. In the third quarter of 2025, we closed the operations of one store in the U.K.
Previous wording
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, our discontinued mobile app, and marketplace platforms), our leased retail stores, and third-party retailers and distributors. As of June 30, 2025, 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. We expect overall sales in 2025 to decrease from 2024, primarily driven by the impacts of our international distributor transitions, retail store closures, and sales trends in our direct business in the first three quarters of the year, partially offset by demand for new products in the fourth quarter of the year.
Current wording
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, our discontinued mobile app, and marketplace platforms), our leased retail stores, and third-party retailers and distributors. As of September 30, 2025, 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 wording
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. We expect gross margin improvement for fiscal year 2025 as compared to fiscal year 2024.
Current wording
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 wording
Marketing expense consists of advertising costs incurred to acquire new customers, retain existing customers, and build our brand awareness. We expect marketing expense to increase in 2025 as we are prioritizing our marketing spend to align with our product strategy.
Current wording
Marketing expense consists of advertising costs incurred to acquire new customers, retain existing customers, and build our brand awareness.
Previous wording
Interest income primarily consists of interest income generated from our cash and cash equivalents, offset by interest expense associated with our credit agreements, including with Second Avenue Capital Partners as of June 30, 2025 and with JPMorgan Chase Bank, N.A for all prior periods. We expect interest income and expense to fluctuate based on our future bank balances, credit line utilization, and the interest rate environment.
Current wording
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 wording
Net loss From Sales of Businesses
Current wording
Net loss from sales of businesses consists of gains or losses associated with the sale of certain net assets used in connection with the operation of our businesses in Japan and Australasia in the second quarter of 2024, and China in the third quarter of 2024, based on the difference between the net book value of assets and liabilities sold against the consideration received.
Previous wording
(1)Includes stock-based compensation expense of $2.0 million and $4.3 million for the three and six months ended June 30, 2025, respectively and $2.9 million and $6.3 million for the same periods in 2024.
Current wording
(1)Includes stock-based compensation expense of $1.5 million and $5.9 million for the three and nine months ended September 30, 2025, respectively and $2.6 million and $8.9 million for the same periods in 2024.
Previous wording
(2)Includes depreciation and amortization expense of $1.9 million and $3.8 million for the three and six months ended June 30, 2025, respectively, and $2.6 million and $7.4 million for the for the same periods in 2024.
Current wording
(2)Includes depreciation and amortization expense of $1.9 million and $5.7 million for the three and nine months ended September 30, 2025, respectively, and $2.9 million and $10.2 million for the for the same periods in 2024.
Previous wording
Net revenue decreased by $19.1 million, or 21.0%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our direct business of $12.7 million, primarily driven by declines in our retail business, primarily due to store closures. Net revenue was also impacted by our transition to third-party distributors in our international business by approximately $5.2 million. These decreases were partially offset by gift card breakage revenue of $2.0 million, resulting from a change in accounting estimate.
Current wording
Net revenue decreased by $10.0 million, or 23.3%, for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our U.S. direct business of $6.3 million, primarily driven by declines in our e-commerce and retail businesses, primarily due to store closures. Net revenue also declined in our international business by $3.5 million, primarily due to our transition to third-party distributors and timing of distributor net revenue.
Previous wording
Cost of revenue decreased by $5.2 million, or 11.1%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily attributable to decreases in product costs of approximately $7.6 million driven by fewer unit sales in our direct business, as well decreased distribution center costs of approximately $0.8 million, partially offset by increased inventory write-downs and adjustments of $3.7 million.
Current wording
Cost of revenue decreased by $5.2 million, or 21.6%, for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily attributable to decreases in product costs of approximately $4.3 million and freight costs of approximately $0.6 million, driven by fewer unit sales in our U.S. direct business, partially resulting from the U.S. retail store closures.
Previous wording
Gross profit decreased by $9.9 million, or 38.0%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease in gross profit was driven by the decreases in net revenue and cost of revenue.
Current wording
Gross profit decreased by $4.8 million, or 25.3%, for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease in gross profit was driven by the decreases in net revenue and cost of revenue.
Previous wording
Selling, general, and administrative expense decreased by $9.4 million, or 28.0%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreases in personnel and related expenses of $3.8 million, occupancy costs of $3.1 million, stock-based compensation expense of $0.9 million, and depreciation and amortization expense of $0.7 million.
Current wording
Selling, general, and administrative expense decreased by $9.3 million, or 30.0%, for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreases in personnel and related expenses of $4.0 million, occupancy costs of $2.4 million, stock-based compensation expense of $1.1 million, and depreciation and amortization expense of $1.0 million.
Previous wording
Restructuring expense decreased by $1.0 million, or 100.0%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was driven by completion of the strategic transformation plan in 2024.
Current wording
Restructuring expense decreased by $35 thousand, or 100.0%, for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was driven by completion of the strategic transformation plan in 2024.
Previous wording
Net loss from sales of businesses decreased by $0.2 million, or 100.0%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was driven by the sales of our Japanese and Australasian businesses to unrelated third-party distributors in the second quarter of 2024.
Current wording
Net loss from sales of businesses decreased by $0.2 million, or 100.0%, for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was driven by the sale of our Chinese business to an unrelated third-party distributor in the third quarter of 2024.
Previous wording
Other income increased by $0.4 million, or 77.6%, for the three months ended June 30, 2025, primarily due to higher gains on the termination and modification of certain operating leases.
Current wording
Other income decreased by $0.2 million, or 98.4%, for the three months ended September 30, 2025, primarily due to lower gains on the termination and modification of certain operating leases.
Previous wording
Income tax provision decreased by $0.5 million, or 85.3%, for the three months ended June 30, 2025 as compared to the same period in 2024, 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 $14 thousand, or 16.3%, for the three months ended September 30, 2025 as compared to the same period in 2024, 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
Net revenue decreased by $11.9 million, or 23.1%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our direct business of $9.1 million, primarily driven by declines in our retail business, primarily due to store closures. Net revenue was also impacted by our transition to third-party distributors in our international business by approximately $2.4 million.
Current wording
Net revenue decreased by $29.1 million, or 21.7%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our U.S. direct business of $16.6 million, primarily driven by declines in our retail business, primarily due to store closures. Net revenue also declined in our international business by $15.5 million, primarily due to our transition to third-party distributors, partially offset by increased distributor net revenue of $4.3 million.
Previous wording
Cost of revenue decreased by $2.0 million, or 7.8%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily attributable to decreases in product costs of approximately $4.4 million, driven by fewer unit sales in our direct business, partially resulting from the U.S. retail store closures, as well decreased distribution center costs of approximately $0.7 million related to fewer units sales and less on-hand inventory during the period. These decreases were partially offset by increased inventory write-downs and adjustments of $2.4 million, primarily driven by our transition to a distributor in Europe at the end of the second quarter.
Current wording
Cost of revenue decreased by $10.3 million, or 14.7%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily attributable to decreases in product costs of approximately $10.0 million, primarily driven by fewer unit sales in our U.S. direct business. partially due to U.S. retail store closures.
Previous wording
Gross profit decreased by $14.0 million, or 31.4%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease in gross profit was driven by the decreases in net revenue and cost of revenue.
Current wording
Gross profit decreased by $18.8 million, or 29.6%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease in gross profit was driven by the decreases in net revenue and cost of revenue.
Previous wording
Selling, general, and administrative expense decreased by $23.9 million, or 32.6%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreases in personnel and related expenses of $8.4 million, occupancy costs of $5.8 million, depreciation and amortization expense of $3.5 million, and stock-based compensation expense of $1.9 million.
Current wording
Selling, general, and administrative expense decreased by $33.2 million, or 31.8%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreases in personnel and related expenses of $12.3 million, occupancy costs of $8.2 million, depreciation and amortization expense of $4.5 million, and stock-based compensation expense of $3.0 million.
Previous wording
Marketing expense increased by $1.0 million, or 5.4%, for the six months ended June 30, 2025 as compared to the same period in 2024. The increase was primarily driven by an investment in upper funnel marketing initiatives, partially offset by reduced digital advertising costs.
Current wording
Marketing expense increased by $2.9 million, or 9.9%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily driven by an investment in upper funnel marketing initiatives.
Previous wording
Restructuring expense decreased by $1.8 million, or 100.0%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was driven by completion of the strategic transformation plan in 2024.
Current wording
Restructuring expense decreased by $1.8 million, or 100.0%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was driven by completion of the strategic transformation plan in 2024.
Previous wording
Net loss from sales of businesses decreased by $0.2 million, or 100.0%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was driven by the sales of our Japanese and Australasian businesses to unrelated third-party distributors in the second quarter of 2024.
Current wording
Net loss from sales of businesses decreased by $0.4 million, or 100.0%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was driven by the sales of our Japanese, Australasian, and Chinese businesses to unrelated third-party distributors in the same period of 2024.
Previous wording
Interest income decreased by $1.1 million, or 93.0%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our short-term investments in money market funds and interest expense related to our Prior Credit Agreement.
Current wording
Interest income decreased by $3.0 million, or 99.7%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our short-term investments in money market funds and increased interest expense related to our Credit Agreement.
Previous wording
Other income decreased by $0.5 million, or (23.1)%, for the six months ended June 30, 2025 as compared to the same period in 2024. This decrease was primarily due lower gains on the termination and modification of certain operating leases.
Current wording
Other income decreased by $0.7 million, or 28.7%, for the nine months ended September 30, 2025 as compared to the same period in 2024. This decrease was primarily due lower gains on the termination and modification of certain operating leases.
Previous wording
Income tax provision decreased by $0.6 million, or 81.4%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was 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 $0.7 million, or 75.0%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was 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
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 March 2023 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 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.
Previous wording
Adjusted EBITDA loss decreased by $1.2 million and $3.4 million for the three and six months ended June 30, 2025, respectively, as compared to the same period in 2024. The decreases were primarily driven by decreased net loss in each period, which was driven primarily by the reduction in operating expenses during each period.
Current wording
Adjusted EBITDA loss decreased by $0.5 million and $3.9 million for the three and nine months ended September 30, 2025, respectively, as compared to the same period in 2024. The decreases were primarily driven by decreased net loss in each period, which was driven primarily by the reduction in operating expenses during each period.
Previous wording
Adjusted EBITDA margin declined from (26.6)% to (31.7)% for the three months ended June 30, 2025 as compared to the same period in 2024 and declined from (38.1)% to (43.5)% for the six months ended June 30, 2025 as compared to the same period in 2024. These changes were primarily driven by lower net sales, partially offset by the same factors as noted in the adjusted EBITDA discussion above.
Current wording
Adjusted EBITDA margin declined from (37.8)% to (47.7)% for the three months ended September 30, 2025 as compared to the same period in 2024 and declined from (38.0)% to (44.8)% for the nine months ended September 30, 2025 as compared to the same period in 2024. These changes were primarily driven by lower net sales, partially offset by the same factors as noted in the adjusted EBITDA discussion above.
Previous wording
On June 30, 2025, we entered into a secured $50.0 million revolving credit agreement with Second Avenue Capital Partners LLC (the “Credit Agreement”). The borrowing capacity is subject to a borrowing base formula, and under the revolving credit facility may be increased up to an additional $25.0 million, subject to obtaining additional lender commitments and satisfying certain conditions.
Current wording
On June 30, 2025, we entered into a secured $50.0 million revolving credit agreement with Second Avenue Capital Partners LLC (the “Credit Agreement”). The borrowing capacity is subject to a borrowing base formula relating to the value of our eligible assets, and under the revolving credit facility may be increased up to an additional $25.0 million, subject to obtaining additional lender commitments and satisfying certain conditions.
Previous wording
During thesix months ended June 30, 2025, net cash used in operating activities was $36.6 million, which consisted of a net loss of$37.4 million, in part driven by a net change of $(7.4) million in our operating assets and liabilities and partially offset by non-cash charges of $8.2 million. The change in operating assets and liabilities was primarily due to a decrease of $3.9 million in accounts payable and accrued expenses due to timing of payments made and a decrease of $4.7 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures, a decrease of $2.7 million in prepaid expenses and other current assets due to the amortization of prepaid expenses and a reduction in other receivables, an increase of $1.6 million in accounts receivable due to timing of cash received, and a decrease of $0.4 million in inventory as a result of lower on-hand inventory.
Current wording
During thenine months ended September 30, 2025, net cash used in operating activities was $51.8 million, which consisted of a net loss of$57.7 million, in part driven by a net change of $(7.2) million in our operating assets and liabilities and partially offset by non-cash charges of $13.1 million. The change in operating assets and liabilities was primarily due to a decrease of $6.3 million in accounts payable and accrued expenses due to timing of payments made and a decrease of $5.6 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures, a decrease of $4.8 million in prepaid expenses and other current assets due to timing of prepaid expenses, a decrease of $1.3 million in accounts receivable due to timing of cash received, and a decrease of $1.0 million in inventory as a result of lower on-hand inventory.
Previous wording
During thesix months ended June 30, 2024, net cash used in operating activities was$(41.8) million, which consisted of a net loss of $46.5 million, offset by a net change of $(11.2) million in our operating assets and liabilities and non-cash charges of $15.9 million. The change in operating assets and liabilities was primarily due to a decrease of $8.9 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures.
Current wording
During the nine months ended September 30, 2024, net cash used in operating activities was $53.0 million, which consisted of a net loss of $67.6 million, offset by a net change of $(6.9) million in our operating assets and liabilities and non-cash charges of $21.5 million. The change in operating assets and liabilities was primarily due to a decrease of $10.6 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures and an increase of $4.5 million in inventory as a result of higher on-hand inventory, partially offset by an increase of $3.2 million in accounts payable due to timing of payments made and an increase of $2.2 million in accounts receivable due to timing of cash received.
Previous wording
During the six months ended June 30, 2025, net cash used in investing activities was $0.9 million, and consisted primarily of $0.4 million of proceeds from the sale of our businesses and a decrease of $0.1 million in security deposits related to our closed retail stores, partially offset by $1.4 million cash outflows for the purchases of property and equipment to support the ongoing operations of our corporate development and retail stores.
Current wording
During the nine months ended September 30, 2025, net cash used in investing activities was $1.4 million, and consisted primarily of $2.3 million cash outflows for the purchases of property and equipment to support the ongoing operations of our corporate development and retail stores, partially offset by a decrease of $0.5 million in security deposits related to our closed retail stores and $0.4 million of proceeds from the sale of our businesses.
Previous wording
During thesix months ended June 30, 2024, net cash provided by investing activities was $0.1 million, and consisted primarily of $1.3 million of proceeds from the sale of our businesses and a decrease of $1.2 million in security deposits related to our closed retail stores, partially offset by cash outflows for the purchases of property and equipment to support the ongoing operations of our retail stores and corporate development
Current wording
During the nine months ended September 30, 2024, net cash provided by investing activities was $1.5 million, and consisted primarily of $2.5 million of proceeds from the sale of our businesses and a decrease of $2.2 million in security deposits related to our closed retail stores, partially offset by $3.1 million cash outflows for the purchases of property and equipment to support the ongoing operations of our corporate development and retail stores.
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Current report — wording carried from elsewhere
Note 2 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net loss From Sales of Businesses
Previous report — wording carried elsewhere
Interest income decreased by $1.9 million, or 83.1%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our short-term investments in money market funds and interest expense related to our prior Credit Agreement.