Allbirds, Inc.

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 28 stores as of March 31, 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 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.

Previous wording

For the three months ended March 31, 2025 and 2024:

Current wording

For the three and six months ended June 30, 2025 and 2024:

Previous wording

•We generated net revenue of $32.1 million for the three months ended March 31, 2025, as compared to $39.3 million for the same period in 2024.

Current 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.

Previous wording

•We generated net loss of $21.9 million for the three months ended March 31, 2025, as compared to $27.3 million for the same period in 2024.

Current 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.

Previous wording

•We generated adjusted EBITDA loss of $18.6 million for the three months ended March 31, 2025, as compared to $20.9 million for the same period in 2024.

Current 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.

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, and in the first quarter of 2025 we closed 5 stores in the United States. In 2023 and 2024, we transitioned the operations of international stores to distributor partners in South Korea, Canada, Australasia, Japan, and China. 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

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.

Previous wording

1 In the first quarter of 2024, we closed the operations of three stores in the U.S. In the second quarter of 2024, we closed the operations of ten stores in the U.S. In the third quarter of 2024, we closed the operations of one store in the U.S. In the fourth quarter of 2024, we closed the operations of one store in the U.S. In the first quarter of 2025, we closed the operations of five stores in the U.S.

Current wording

1 In the first quarter of 2024, we closed the operations of three stores in the U.S. In the second quarter of 2024, we closed the operations of ten stores in the U.S. In the third quarter of 2024, we closed the operations of one store in the U.S. In the fourth quarter of 2024, we closed the operations of one store in the U.S. In the first quarter of 2025, we closed the operations of five stores in the U.S. In the second quarter of 2025, we closed the operations of four stores in the U.S.

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 March 31, 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 be in line with 2024, primarily driven by demand for new products in the fourth quarter of the year, offset 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.

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 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.

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 increases, 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 in 2025.

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. We expect gross margin improvement for fiscal year 2025 as compared to fiscal year 2024.

Previous wording

Interest income primarily consists of interest income generated from our cash and cash equivalents, offset by interest expense associated with our credit agreement with JPMorgan Chase Bank, N.A, which we refer to as our Credit Agreement. 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 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.

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 the United States, China, Hong Kong, Canada, New Zealand, Germany, Japan and South Korea as of March 31, 2025.

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 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 the United States, China, Hong Kong, Canada, New Zealand, Germany, and South Korea as of June 30, 2025.

Previous wording

(1)Includes stock-based compensation expense of $2.3 million for the three months ended March 31, 2025, and $3.3 million for the three months ended March 31, 2024.

Current 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.

Previous wording

(2)Includes depreciation and amortization expense of $1.9 million for the three months ended March 31, 2025, and $4.8 million for the three months ended March 31, 2024.

Current 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.

Previous wording

Gross profit decreased by $4.1 million, or 22.0%, for the three months ended March 31, 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 $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.

Previous wording

Selling, general, and administrative expense decreased by $14.5 million, or 36.5%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreases in personnel and related expenses of $4.6 million, depreciation and amortization expense of $2.9 million, occupancy costs of $2.7 million, professional services fees of $1.1 million, and stock-based compensation expense of $1.1 million.

Current 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.

Previous wording

Restructuring expense decreased by $0.8 million, or 100.0%, for the three months ended March 31, 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 $1.0 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.

Previous wording

Interest income decreased by $0.7 million, or 71.3%, for the three months ended March 31, 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 Credit Agreement.

Current 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.

Previous wording

Other income decreased by $1.0 million, or 57.1%, for the three months ended March 31, 2025, primarily due to lower gains on the termination and modification of certain operating leases.

Current 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.

Previous wording

Income tax provision decreased by $0.2 million, or 72.4%, for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to our transition to third-party distributors in certain international markets and the mix of taxable income in foreign jurisdictions that resulted in differences in the effective tax rates.

Current 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.

Previous wording

Net revenue decreased by $7.2 million, or 18.3%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our direct business of $6.9 million, driven by approximately $4.1 million 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 $2.8 million. These decreases were partially offset by gift card breakage revenue of $1.9 million, resulting from a change in accounting estimate.

Current 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.

Previous wording

Cost of revenue decreased by $3.2 million, or 15.1%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily attributable to decreases in product costs of approximately $2.6 million and distribution center expenses of approximately $0.5 million, driven by fewer unit sales as a result of the US retail store closures and international distributor transitions.

Current 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.

Previous wording

Our gross margin decreased to 44.8% for the three months ended March 31, 2025 from 46.9% in the same period in 2024, primarily due to lower average selling prices, driven by the shift to international distributors, lower average selling prices in our direct business, and higher per unit freight costs in our direct business. These declines were partially offset by gift card breakage.

Current wording

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 wording

Marketing expense increased by $4.3 million, or 54.9%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily driven by an investment in upper funnel marketing initiatives.

Current 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.

Previous wording

•adjusted EBITDA and adjusted EBITDA margin do not reflect impairment expense for long-lived assets and, although these are a non-cashexpense, the assets being impaired may never recover their fair value, increasing our cash requirements;

Current wording

•adjusted EBITDA and adjusted EBITDA margin do not reflect impairment expense for long-lived assets and, although these are a non-cash expense, the assets being impaired may never recover their fair value, increasing our cash requirements;

Previous wording

Adjusted EBITDA loss decreased by $2.3 million, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreased net loss, which was driven primarily by the reduction in operating expenses during the period.

Current 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.

Previous wording

Adjusted EBITDA margin declined from (53.1)% to (58.1)% for the three months ended March 31, 2025 as compared to the same period in 2024. The change was primarily driven by the same factors as noted in the adjusted EBITDA discussion above.

Current 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.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $39.1 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.

Current wording

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 wording

We believe our existing cash and cash equivalent balances, cash flow from operations, and amounts available for borrowing under our Credit Agreement (including the extension, amendment, or replacement of the Credit Agreement before it matures on April 17, 2026), 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.

Current wording

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.

Previous wording

Agreement. The Credit Agreement, as amended, is an asset-based loan with a revolving line of credit of up to $50.0 million, subject to a borrowing base formula, and an optional accordion of up to $50.0 million. Interest on borrowings under the Credit Agreement accrue at a variable rate equal to (i) the Term Secured Overnight Financing Rate (“SOFR”), plus (ii) 0.10%, plus (iii) a specified spread of 1.75% or 2.00% dependent on the average quarterly revolver availability, calculated on the last day of each fiscal quarter being greater than 20% of the total revolver commitments or less than or equal to 20% of the total revolver commitments, respectively. The commitment fee under the Credit Agreement is 0.20% per annum on the average daily unused portion of each lender’s commitment. In addition, we are required to pay a fronting fee of 0.125% per annum on the average daily aggregate face amount of issued and outstanding letters of credit. Interest, commitment fees and fronting fees are payable monthly, in arrears.

Current wording

Interest on borrowings under the revolving credit facility accrues at a variable rate equal to (i) the sum of the Term Secured Overnight Financing Rate (“SOFR”), plus (ii) 0.15%, plus (ii) a margin of 5.75% per annum. The commitment fee under the Credit Agreement is 0.45% per annum on the average daily unused portion of each lender’s commitment.

Previous wording

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to us and our subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, dividends and other distributions and a financial covenant that requires us to maintain a specified minimum fixed charge coverage ratio. In addition, the Credit Agreement contains certain customary events of default including, but not limited to, failure to pay interest, principal and fees or other amounts when due, material misrepresentations or misstatements in any representation or warranty, covenant defaults, certain cross defaults to other material indebtedness, certain judgment defaults and events of bankruptcy.

Current wording

The Credit Agreement contains customary representations and warranties, and affirmative covenants and negative covenants applicable to the Company and certain of its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions of assets, dividends and other distributions, minimum unrestricted cash, and minimum consolidated EBITDA. In addition, the Credit Agreement contains certain customary events of default including, but not limited to, failure to pay interest, principal and fees or other amounts when due, material misrepresentations or misstatements in any representation or warranty, covenant defaults, certain cross defaults to other material indebtedness, certain judgment defaults and events of bankruptcy or insolvency.

Previous wording

Our largest sources of operating cash are cash payments received from customers for sales of our products. Our primary uses of cash from operating activities are for personnel and related expenses, selling and marketing expenses, and third-party professional fees. We have generated negative operating cash flows and have supplemented working capital through net proceeds from the sale of equity securities, including proceeds from our IPO in November 2021.

Current wording

Our largest sources of operating cash are cash payments received from customers for sales of our products. Our primary uses of cash from operating activities are for inventory, personnel and related expenses, selling and marketing expenses, and third-party professional fees.

Previous wording

$2.8 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures, partially offset by 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, a decrease of$1.1 million in accounts receivable due to timing of cash received, and a decrease of$0.8 million in inventory as a result of lower on-hand inventory.

Current 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.

Previous wording

During thethree months ended March 31, 2024, net cash used in operating activities was $26.2 million, which consisted of a net loss of$27.3 million, offset by a net change of $(9.2) million in our operating assets and liabilities and non-cash charges of $10.3 million. The change in operating assets and liabilities was primarily due to a decrease of$5.8 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures and$4.0 million in inventory as a result of higher on-hand inventory.

Current 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.

Previous wording

During thethree months ended March 31, 2024, net cash used in investing activities was $0.8 million, and consisted primarily of cash outflows for the purchases of property and equipment to support the ongoing operations of our retail stores, offset by $0.3 millionof proceeds from the sale of our Korean subsidiary in the third quarter of 2023.

Current 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.

Previous wording

During thethree months ended March 31, 2025, net cash provided by investing activities was $0.2 million, and consisted primarily of $0.4 millionof proceeds from the sale of our businesses and a decrease of $44.0 thousand in security deposits related to our closed retail stores, partially offset by $0.6 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 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

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 and 2024 was$3 thousand and$33 thousand, respectively, primarily due to proceeds from the exercise of stock options, offset by taxes withheld related to employee stock awards.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $0.2 million, primarily due to proceeds from the exercise of stock options and proceeds from the issuance of common stock under our employee stock purchase plan, offset by taxes withheld related to employee stock awards.