Adapted from a press release:
BARK, Inc., the brand behind BarkBox dog food and product subscription service, released their financial results for its third quarter of fiscal year 2022, which ended December 31, 2021. BARK’s BarkEats dog foods are customizable and delivered to pet owners’ homes. The company’s products are also available through online and brick-and-mortar retail outlets, including Target, Walmart and Amazon.
"Our customer base continues to grow, our average revenue per order continues to grow, and I am eager to leverage this continued success to meaningfully expand BARK's presence in exciting categories like food and health; two areas that I believe will become significant contributors to our business,” Matt Meeker, co-founder and chief executive officer of BARK, said in a press release.
In Q3 FY22, BARK:
- Delivered fiscal third quarter 2022 revenue of US$140.8 million, a 33.9% increase year-over-year.
- Added approximately 371,000 active subscriptions, bringing total to 2.3 million as of quarter-end.
- Achieved a LTV-to-CAC of 4.5x in the quarter and 4.7x through the first nine months of fiscal 2022.
- Achieved record Average Order Value of US$31.10, an increase of US$2.12 compared to the same period last year.
- Cross-sell and Upsell efforts including Add-to-Box contributed a record US$10.3 million of DTC revenue, a 55% increase compared to last year.
- BARK announced a new partnership with Walmart; BARK products are now available in nearly 2,800 stores across the U.S. and at Walmart.com.
BARK’s financial performance reflects the company’s position as a digitally native dog brand, Meeker said. He believes BARK’s growing dataset, products and positive customer relationships will facilitate further growth.
Total revenue increased 33.9% to US$140.8 million in the third quarter of fiscal year 2022 as compared to US$105.2 million in the third quarter of fiscal year 2021.
- Direct to Consumer (“DTC”) revenue came in at US$118.1 million in the third quarter of fiscal year 2022, a 31.0% increase as compared to the same period last year. The growth in DTC revenue was driven by an increase in Subscription Shipments, Average Order Value (“AOV”), and cross-sell and up-sell revenue in the quarter. Through the first nine months of fiscal 2022, cross-sell and up-sell revenue of US$23.3 million is up 84% compared to last year.
- Commerce revenue came in at US$22.7 million in the third quarter of fiscal year 2022, a 51.5% increase as compared to the same period last year. This growth reflects increases in the number of retailers we partnered with, as well as volume increases and a growing number of available SKUs amongst existing retailer partners.
More BARK financial data
Gross profit was US$78.4 million in the third quarter of fiscal year 2022 up from US$59.5 million in the third quarter of fiscal year 2021. Gross margin was 55.7% in the third quarter of fiscal year 2022 compared to 56.6% in the same period last year. The slight decrease in gross margin was largely the result of increased container costs associated with macro supply chain congestion.
General and administrative expenses were US$78.6 million in the third quarter of fiscal year 2022, versus US$52.6 million in the third quarter of fiscal year 2021. The year-over-year increase was driven by greater shipment volume associated with a 22.0% increase in total Subscription Shipments, higher outbound shipping and fulfillment rates associated with industry wide shipping congestion, as well as additional expenses in connection with the build out and staffing of our BARK Eats and BARK Bright businesses. The Company also incurred incremental expenses associated with being a newly public company.
Advertising and marketing expenses came in at US$26.8 million in the third quarter of fiscal year 2022, which is 19.1% of revenue. This compares favorably to US$26.3 million in the third quarter of fiscal year 2021, which was 25.0% of total revenue. Customer Acquisition Costs (“CAC”) were US$64.42 in the most recent fiscal quarter, compared to US$60.50 in the same period last year. Our Lifetime Value to CAC ratio was a healthy 4.5x in the third quarter of fiscal year 2022. The Company manages its marketing budget on an LTV-to-CAC basis, targeting an annual ratio of 4x or greater. Through the first nine months of fiscal 2022, the company's LTV-to-CAC was 4.7x. Net Loss was US$(13.2) million, resulting in Net Loss margin of (9.4)% in the third quarter of fiscal 2022, as compared to Net Loss of US$(25.0) million and Net Loss margin of (23.7)%, in the same period last year. The year-over-year improvement was largely driven by a US$14.5 million of other income related to the change in the fair value of our warrant liabilities, a non-cash item. Adjusted EBITDA was US$(18.3) million, with Adjusted EBITDA margin of (13.0)%, in the third quarter of fiscal year 2022, as compared to Adjusted EBITDA of US$(14.1) million and Adjusted EBITDA margin of (13.4)%, in the third quarter of fiscal year 2021. The Company’s cash and cash equivalents balance as of December 31, 2021 was US$228.7 million. As of December 31, 2021, the Company had total debt outstanding of US$76.0 million, related to its outstanding convertible notes.