BARK Q3 Deep Dive: Debt-Free Milestone, Revenue Diversification, and Margin Pressures

Pet products provider Bark (NYSE:BARK) reported Q3 CY2025 results exceeding the market’s revenue expectations, but sales fell by 15.2% year on year to $107 million. On the other hand, next quarter’s revenue guidance of $102.5 million was less impressive, coming in 4% below analysts’ estimates. Its non-GAAP loss of $0.03 per share was $0.02 below analysts’ consensus estimates.

Is now the time to buy BARK? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Bark’s third quarter saw a significant negative reaction from the market, driven by ongoing revenue declines and weaker-than-expected profitability. Management cited continued progress in diversifying revenue streams, particularly through growth in the Commerce segment and the BARK Air business. CEO Matt Meeker highlighted that the company’s strategy of shifting marketing spend to more efficient channels and focusing on higher-value subscribers contributed to improved customer acquisition costs and retention. Despite these operational improvements, external pressures such as tariffs and changes at the U.S. Postal Service weighed on gross margins, prompting Bark to maintain a cautious stance on near-term growth.

Looking ahead, Bark’s guidance reflects management’s focus on balancing growth with profitability amid continued macro uncertainty. CFO Zahir Ibrahim emphasized that further cost discipline, ongoing improvements in gross margins, and strategic investments in product diversification are expected to drive performance. Management remains cautious given the volatility in tariffs and consumer sentiment, but Meeker stated, “our aim is still to be EBITDA breakeven for the year,” pointing to revenue diversification and operational efficiency as key priorities for the coming quarters.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to revenue diversification, improved customer acquisition efficiency, and strategic cost management, while also acknowledging ongoing margin headwinds from tariffs and delivery changes.

• Commerce segment momentum: The Commerce business achieved a record 24% of total revenue, fueled by expanded partnerships with retailers such as Walmart, Amazon, Chewy, and Costco. Management cited strong demand for new product launches, including the Bark in the Belly kibble line, and highlighted the early sell-out of seasonal offerings.

• BARK Air’s rapid expansion: BARK Air revenue more than doubled year over year, with management reporting a 93% seat fill rate and consistently high customer satisfaction. CEO Matt Meeker views the segment’s performance as validation of strong demand for dog-centric travel and a potential long-term growth engine.

• Marketing efficiency gains: Bark achieved its lowest customer acquisition cost since early 2023 by shifting spend toward organic and direct channels, such as email and SMS, and away from paid social platforms. Meeker noted that this led to a more sustainable subscriber mix and higher retention rates.

• Operational cost savings: The transition of last-mile delivery to Amazon’s logistics network helped reduce shipping costs and improve delivery speed by approximately one day. Management expects this partnership to further enhance margins and the customer experience.

• Tariff and cost headwinds: Bark faced higher product tariffs and shipping costs, which reduced gross margins despite productivity improvements and vendor price negotiations. CFO Zahir Ibrahim indicated that product sourcing changes and selective price increases are planned to offset these pressures in future quarters.

Drivers of Future Performance

Bark’s outlook is shaped by efforts to drive profitability through cost efficiencies, product diversification, and risk management in a challenging macro environment.

• Revenue mix evolution: Management expects continued growth in commerce and travel segments, with new retail partnerships and product launches supporting top-line performance. However, a smaller starting subscriber base and cautious marketing spend may limit near-term growth.

• Margin recovery initiatives: Bark plans to address margin pressures by sourcing more products from outside China, implementing price increases in the Commerce segment, and leveraging operational partnerships like Amazon for last-mile delivery. These actions are intended to improve both gross and operating margins through the year.

• External risks persist: The company remains wary of ongoing tariff volatility and shifting consumer sentiment. Management acknowledged these factors could impact both costs and demand, leading to a conservative approach in deploying capital and setting guidance for future quarters.

Catalysts in Upcoming Quarters

Looking ahead, StockStory analysts will be watching (1) whether gross margin improvements from product sourcing changes and price increases begin to materialize, (2) sustained growth in the Commerce and BARK Air segments as new products and retail partnerships ramp up, and (3) continued reductions in customer acquisition costs and subscriber churn as platform enhancements and organic channels take hold. Execution on these initiatives will be critical for Bark’s path to profitability.

Bark currently trades at $0.81, up from $0.80 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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