Bark, Inc.

Previous wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto for the year ended March 31, 2025 contained in the Annual Report on Form 10-K filed with the SEC on June 4, 2025. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, “the Company” and “BARK” are intended to mean the business and operations of BARK, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements for the three months ended June 30, 2025 and 2024, respectively, present the financial position and results of operations of BARK, Inc. and its wholly-owned subsidiaries.

Current wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto for the year ended March 31, 2025 contained in the Annual Report on Form 10-K filed with the SEC on June 4, 2025. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, “the Company” and “BARK” are intended to mean the business and operations of BARK, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements for the three and six months ended September 30, 2025 and 2024, respectively, present the financial position and results of operations of BARK, Inc. and its wholly-owned subsidiaries.

Previous wording

In the past, we have experienced increases in inbound freight costs due to the challenges in the import market, as transpacific ships and trade lanes continue to be overburdened with volume and experience a significant shortage of equipment and capacity due to macroeconomic challenges affecting the global supply chain, including, for example, the COVID-19 pandemic. Increases in cost of goods, freight costs and supply chain disruptions may continue and could impact our business, in particular as a result of the imposition of tariffs and other trade barriers, the uncertainty surrounding such tariffs and and trade barriers, and other global conditions. Other market factors or international events, such as increased inflation, war, rising tensions between the U.S. and China, and continued changes to trade policy, including the imposition of tariffs under alternative authority available to the executive branch of the US government.

Current wording

Market factors or international events, such as increased inflation, war, rising tensions between the U.S. and China, and continued changes to trade policy, including the imposition of tariffs or changes in tariff rates, create uncertainty and could impact our results of operations.

Previous wording

Macroeconomic conditions and the related effects on levels of consumer spending impact our business as purchases of discretionary items tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty. Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on market declines and uncertainty, home prices, credit availability and consumer debt levels, political instability due to war or other geopolitical factors and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have led to recession fears and created a challenging environment.

Current wording

Macroeconomic Conditions. Macroeconomic conditions and the related effects on levels of consumer spending impact our business as purchases of discretionary items tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty. Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on market declines and uncertainty, home prices, credit availability and consumer debt levels, political instability due to war or other geopolitical factors and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have led to recession fears and created a challenging environment.

Previous wording

Direct to Consumer revenue decreasedby $17.9 million, or 16.7%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily driven by a 18.1%, or 0.6 million decrease in Total Orders, and a $0.14 or 0.5% decrease in AOV, partially offset by revenue from BARK Air of $2.3 million or 2.7% of Direct to Consumer revenue.

Current wording

Direct to Consumer revenue decreasedby $20.5 million, or 19.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily driven by a 22.2%, or 0.7 million decrease in Total Orders, and a $0.04 or 0.1% decrease in AOV. The decrease was partially offset by an increase in revenue from BARK Air of $2.1 million. Total BARK Air revenue was $3.6 million or 4.4% of Direct to Consumer revenue.

Previous wording

Commerce revenue increased by$4.5 million, or 49.5% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily driven by sales volume from existing and new customers.

Current wording

Commerce revenue increased by$1.3 million, or 5.6% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily driven by sales volume from existing and new customers.

Previous wording

Direct to Consumer gross profit decreased by$9.3 million while Commerce gross profit increased by $0.1 millionfor the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The increase in Commerce gross profit is primarily attributable to an increase in revenue.

Current wording

Direct to Consumer and Commerce gross profit decreased by$13.5 million and $0.6 million, respectivelyfor the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit is partly attributable to higher tariffs and increased inbound shipping costs in the quarter.

Previous wording

Gross profit as a percentage of revenue decreased 0.8% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Direct to Consumer gross margin was 67.0%, 250 basis points higher than the same period last year. Excluding the impact of BARK Air, Direct to Consumer gross margin was 69.3%, 420 basis points higher than the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements. Commerce gross margin was 31.7%, 1,490 basis points lower than the same period last year. The decrease in Commerce gross margin is partly attributable to opportunistic sell-through of surplus inventory and from higher tariffs in the quarter.

Current wording

Gross profit as a percentage of revenue decreased 2.5% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Direct to Consumer gross margin was 63.3%, 60 basis points lower than the same period last year. Excluding the impact of BARK Air, Direct to Consumer gross margin was 65.6%, 80 basis points higher than the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes. Commerce gross margin was 40.2%, 480 basis points lower than the same period last year. The decrease in Commerce gross margin is primarily attributable to changes in customer mix and, to a lesser extent, the timing of the implementation of our tariff mitigation strategies.

Previous wording

Total general and administrative expense decreased by $6.2 million, or 9.7%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $2.6 million attributable to lower Direct to Consumer volumes, decreased compensation expense of $3.0 million, as well as decreased professional fees of $0.5 million.

Current wording

Total general and administrative expense decreased by $5.9 million, or 9.4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $2.6 million attributable to lower Direct to Consumer volumes, decreased compensation expense of $2.7 million, as well as decreased professional fees of $0.5 million.

Previous wording

Advertising and marketing expense decreased by $5.3 million, or 25.7%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease is primarily attributable to decreased marketing spend.

Current wording

Advertising and marketing expense decreased by $3.3 million, or 17.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease is primarily attributable to decreased Direct to Consumer marketing spend.

Previous wording

Interest income decreased by $0.7 million, or 45.3%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease in interest income is due to an overall decrease in cash in interest-bearing deposit accounts.

Current wording

Interest income decreased by $0.7 million, or 49.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in interest income is due to an overall decrease in cash in interest-bearing deposit accounts.

Previous wording

Interest expense was flat for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Interest expense for each period is derived from the Company’s 2025 Convertible Notes, as defined below.

Current wording

Interest expense was flat for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Interest expense for each period is derived from the Company’s 2025 Convertible Notes.

Previous wording

Other income, net increased by $1.4 millionfor the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily due to in the change of the fair value of our warrant liabilities of $1.2 million.

Current wording

Other income, net increased by $0.3 millionfor the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to the change of the fair value of our warrant liabilities.

Previous wording

The Non-GAAP Measures are presented for supplemental informational purposes only, have limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of the Non-GAAP Measures include that (1) the measures do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) Adjusted EBITDA and Adjusted EBITDA Margin do not consider the impact of stock-based compensation expense, which is an ongoing expense for our company, (4) Adjusted EBITDA and Adjusted EBITDA Margin do not reflect other non-operating expenses, including interest expense and (5) Free cash flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitements. In addition, our use of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies because they may not calculate the Non-GAAP Measures in the same manner, limiting their usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider the Non-GAAP Measures alongside other financial measures, including our net loss and other results stated in accordance with U.S. GAAP.

Current wording

The Non-GAAP Measures are presented for supplemental informational purposes only, have limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of the Non-GAAP Measures include that (1) the measures do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) Adjusted EBITDA and Adjusted EBITDA Margin do not consider the impact of stock-based compensation expense, which is an ongoing expense for our company, (4) Adjusted EBITDA and Adjusted EBITDA Margin do not reflect other non-operating expenses, including interest expense and (5) Free cash flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments. In addition, our use of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies because they may not calculate the Non-GAAP Measures in the same manner, limiting their usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider the Non-GAAP Measures alongside other financial measures, including our net loss and other results stated in accordance with U.S. GAAP.

Previous wording

(4) For the three months ended June 30, 2025, other items is comprised of costs associated with the share repurchase program of less than $0.1 million. For the three months ended June 30, 2024, other items is primarily comprised of the expense related to non-recurring retention payments to management of $0.2 million, executive transition costs including recruiting costs of $0.4 million, costs associated with the share repurchase program of $0.2 million, and duplicate headquarters rent of less than $0.1 million.

Current wording

(4) For the three months ended September 30, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million. For the three months ended September 30, 2024, other items is comprised of executive transition costs including recruiting costs of less than $0.1 million, costs associated with the share repurchase program of less than $0.1 million, and duplicate headquarters rent of less than $0.1 million. For the six months ended September 30, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million and costs associated with the share repurchase program of less than $0.1 million. For the six months ended September 30, 2024, other items is comprised of executive transition costs including recruiting costs of $0.4 million, non-recurring retention payments to management of $0.2 million, costs associated with the share repurchase program of $0.2 million, and duplicate headquarters rent of less than $0.1 million.

Previous wording

Since inception, we have funded our operations with proceeds from sales of our capital stock and proceeds from borrowings in addition to cash generated by our operations. As of June 30, 2025, we had cash and cash equivalents of approximately $84.7 million. We expect that our cash and cash equivalents, together with cash provided by our operating activities and proceeds from borrowings (as defined below), will be sufficient to fund our operations for at least the next 12 months. We are required to comply with certain financial and non-financial covenants related to our borrowing agreements, which we expect to be in compliance with during the next 12 months. Our future capital requirements will depend on many factors, including our pace of new and existing customer growth and our investments in partnerships and unexplored channels. We may be required to seek additional equity or debt financing.

Current wording

Since inception, we have funded our operations with proceeds from sales of our capital stock and proceeds from borrowings in addition to cash generated by our operations. As of September 30, 2025, we had cash and cash equivalents of approximately $63.4 million. We expect that our cash and cash equivalents, together with cash provided by our operating activities and proceeds from borrowings (as defined below), will be sufficient to fund our operations for at least the next 12 months. We are required to comply with certain financial and non-financial covenants related to our borrowing agreements, which we expect to be in compliance with during the next 12 months. Our future capital requirements will depend on many factors, including our pace of new and existing customer growth and our investments in partnerships and unexplored channels. We may be required to seek additional equity or debt financing.

Previous wording

On November 27, 2020, the Company issued $75.0 million aggregate principal amount of 2025 Convertible Notes (the “2025 Convertible Notes”) to Magnetar Capital, LLC (“Magnetar”) under an indenture, dated as of November 27, 2020, between Legacy BARK and U.S. Bank National Association, as trustee and collateral agent (the “Indenture”). The Company received net proceeds of approximately $74.7 million from the sale of the 2025 Convertible Notes, after deducting fees and expenses of approximately $0.3 million. The Company recorded the expenses associated with the issuance of the 2025 Convertible Notes as a discount to the note and will amortize the expenses over the term of the note. The 2025 Convertible Notes will mature on December 1, 2025, unless earlier converted, redeemed or repurchased.

Current wording

On November 27, 2020, the Company issued $75.0 million aggregate principal amount of 2025 Convertible Notes (the “2025 Convertible Notes”) to Magnetar Capital, LLC (“Magnetar”) under an indenture, dated as of November 27, 2020, between Legacy BARK and U.S. Bank National Association, as trustee and collateral agent (the “Indenture”). The Company received net proceeds of approximately $74.7 million from the sale of the 2025 Convertible Notes, after deducting fees and expenses of approximately $0.3 million. The Company recorded the expenses associated with the issuance of the 2025 Convertible Notes as a discount to the note and will amortize the expenses over the term of the note.

Previous wording

On November 2, 2023, the Company repurchased $45.0 million of the $83.5 million of outstanding aggregate principal amount of 5.50% Convertible Secured Notes due 2025 (the “2025 Convertible Notes”) from entities affiliated with Magnetar Financial, LLC (collectively, the “Holders”), pursuant to the terms and conditions of a negotiated notes purchase agreement (the “Agreement”) among the Company and the Holders.

Current wording

On November 2, 2023, the Company repurchased $45.0 million of the $83.5 million of outstanding aggregate principal amount of 5.50% Convertible Secured Notes due 2025 (the “2025 Convertible Notes”) from entities affiliated with Magnetar Financial, LLC (collectively, the “Holders”), pursuant to the terms and conditions of a negotiated notes purchase agreement (the “2023 Agreement”) among the Company and the Holders.

Previous wording

Pursuant to the Agreement, the Company repurchased $45.0 million in aggregate principal amount of the 2025 Convertible Notes plus $2.2 million of accrued and unpaid interest thereon to, but excluding the repurchase date, from the Holders for a total cash purchase price of $44.4 million. In addition, $1.0 million of unamortized deferred financing fees were derecognized from the Company’s balance sheet on the date of extinguishment. The accelerated deferred financing fees were recognized as a component of gain on extinguishment of debt. The Company recognized a gain on debt extinguishment of $1.8 million in connection with the repurchase. If a Change of Control (as defined in the Indenture) of the Company occurs at any time after the date of the Agreement and prior to the December 1, 2025 maturity date of the Notes, the Holders are also entitled to receive an additional cash “true-up” payment from the Company, totaling, in the aggregate for all Holders, either (i) $11.3 million in the case that the Company elects to redeem all of the Notes outstanding at the time of such Change of Control or (ii) $4.5 million in the case that the Holders elect to require the Company to repurchase all of the 2025 Convertible Notes outstanding at the time of such Change of Control, in each case, in accordance with the terms and conditions specified in the Agreement.

Current wording

Pursuant to the 2023 Agreement, the Company repurchased $45.0 million in aggregate principal amount of the 2025 Convertible Notes plus $2.2 million of accrued and unpaid interest thereon to, but excluding the repurchase date, from the Holders for a total cash purchase price of $44.4 million. In addition, $1.0 million of unamortized deferred financing fees were derecognized from the Company’s balance sheet on the date of extinguishment. The accelerated deferred financing fees were recognized as a component of gain on extinguishment of debt. The Company recognized a gain on debt extinguishment of $1.8 million in connection with the repurchase. In the unlikely event that a Change of Control (as defined in the Indenture) of the Company occurs at any time after the date of the 2023 Agreement and prior to the December 1, 2025 maturity date of the Notes, the Holders are also entitled to receive an additional cash “true-up” payment from the Company, totaling, in the aggregate for all Holders, either (i) $11.3 million in the event that the Company elects to redeem all of the Notes outstanding at the time of such Change of Control or (ii) $4.5 million in the event that the Holders elect to require the Company to repurchase all of the 2025 Convertible Notes outstanding at the time of such Change of Control, in each event, in accordance with the terms and conditions specified in the Agreement.

Previous wording

In October 2017, the Company entered into a loan and security agreement with and issued a warrant to purchase preferred stock (“Initial Western Alliance Warrant”) to Western Alliance Bank (“Western Alliance”), which provide for a revolving line of credit (as amended, the “Credit Facility”) in an aggregate principal amount of up to $35.0 million, subject to borrowing base limitations derived from advance rates derived from the Company’s eligible subscription revenues and eligible accounts receivable. The Credit Facility has been amended several times, most recently in January 2025. After giving effect to this most recent amendment, the maturity date of the Credit Facility is September 2, 2025. Certain of the Company’s obligations to Western Alliance and under the Credit Facility are guaranteed by certain of its subsidiaries and secured by substantially all of their assets. The Company is evaluating alternative options or further renewal of the Credit Facility.

Current wording

In October 2017, the Company entered into a loan and security agreement with and issued a warrant to purchase preferred stock (“Initial Western Alliance Warrant”) to Western Alliance Bank (“Western Alliance”), which provide for a revolving line of credit (as amended, the “Credit Facility”) in an aggregate principal amount of up to $35.0 million, subject to borrowing base limitations derived from advance rates derived from the Company’s eligible subscription revenues and eligible accounts receivable. The Credit Facility has been amended several times, most recently in November 2025. After giving effect to this most recent amendment, the maturity date of the Credit Facility is January 2, 2026. Certain of the Company’s obligations to Western Alliance and under the Credit Facility are guaranteed by certain of its subsidiaries and secured by substantially all of their assets. The Company intends to enter in to a longer term renewal of the Credit Facility.

Previous wording

The interest rate for borrowings under the Credit Facility is equal to (a) the great of (i) the prime rate that is published in the Money Rates section of The Wall Street Journal from time to time and (ii) five and one quarter percent (5.25%) per annum, plus (b) half of one percent (0.50%), per annum.

Current wording

The interest rate for borrowings under the Credit Facility is equal to (a) the greater of (i) the prime rate that is published in the Money Rates section of The Wall Street Journal from time to time and (ii) five and one quarter percent (5.25%) per annum, plus (b) half of one percent (0.50%), per annum.

Previous wording

The following table summarizes our cash flows for the three months ended June 30, 2025 and 2024:

Current wording

The following table summarizes our cash flows for the six months ended September 30, 2025 and 2024:

Previous wording

For the three months ended June 30, 2025, net cash used in operating activities was $5.4 million. The $5.4 million of net cash used in operating activities consisted of net loss of $7.0 million adjusted for non-cash charges totaling$6.8 million and a net increase of $5.2 million in our net operating assets and liabilities. The non-cash charges primarily consisted of$3.6 million for stock based compensation, and depreciation and amortization of $2.5 million. The increase in our net operating assets and liabilities was primarily driven by an increase in inventory $10.3 million, offset by a increase in accounts payable and accrued expenses of $5.8 million.

Current wording

For the six months ended September 30, 2025, net cash used in operating activities was $23.5 million. The $23.5 million of net cash used in operating activities consisted of net loss of $17.7 million adjusted for non-cash charges totaling$15.8 million and a net increase of $21.6 million in our net operating assets and liabilities. The non-cash charges primarily consisted of$7.3 million for stock based compensation, and depreciation and amortization of $5.1 million. The increase in our net operating assets and liabilities was primarily driven by an increase in inventory of $13.8 million and an increase in accounts receivable of $7.5 million.

Previous wording

For the three months ended June 30, 2024, net cash provided by operating activities was $1.8 million. The $1.8 million of net cash provided by operating activities consisted of net loss of $10.0 million adjusted for non-cash charges totaling $9.3 million and a net increase of $2.5 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.4 million for changes in fair value of warrants, $2.9 million for stock based compensation, impairment of $0.8 million, and depreciation and amortization of $2.9 million, and increase in inventory reserves of $1.2 million. The increase in our net operating assets and liabilities was primarily driven by higher accounts payable and accrued expenses of $2.4 million and a reduction in inventory of $2.5 million, offset by a reduction in other liabilities of $1.6 million.

Current wording

For the six months ended September 30, 2024, net cash provided by operating activities was $4.6 million. The $4.6 million of net cash provided by operating activities consisted of net loss of $15.3 million adjusted for non-cash charges totaling $18.7 million and a net increase of $1.2 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.9 million for changes in fair value of warrants, $5.9 million for stock based compensation, impairment of $2.1 million, depreciation and amortization of $5.7 million, and increase in the provision for inventory obsolescence of $1.4 million. The increase in our net operating assets and liabilities was primarily driven by higher accounts payable and accrued expenses of $22.9 million, offset by and an increase in inventory of $5.6 million and an increase in accounts receivable of $9.2 million.

Previous wording

For the three months ended June 30, 2025 and 2024, net cash used in investing activities was $0.7 million and $2.0 million, respectively, primarily due to software development costs and capital expenditures.

Current wording

For the six months ended September 30, 2025 and 2024, net cash used in investing activities was $2.6 million and $3.9 million, respectively, primarily due to software development costs and capital expenditures.

Previous wording

For the three months ended June 30, 2025 and 2024, net cash used in financing activities was $2.1 million and $4.3 million, respectively, primarily due to payments to repurchase common stock.

Current wording

For the six months ended September 30, 2025 and 2024, net cash used in financing activities was $2.8 million and $6.5 million, respectively, primarily due to payments and corresponding excise tax related to the repurchase of common stock.