BARK prioritizes profitability over subscriber growth

BARK reported a 25% year-over-year (YoY) decline in revenue to $86.6 million (€73.6M) for the fourth quarter (Q4) of the fiscal year (FY) 2026, ended 31 March 2026.

According to the company, the drop reflects a $4.7 million (€4M) reduction in marketing investment as it prioritized profitability and financial resilience over near-term subscriber growth, amid macroeconomic uncertainty. 

“We made a conscious decision to stop spending on subscribers we couldn’t retain profitably. The subscriber base we enter fiscal 2027 with is smaller but meaningfully stronger,” CEO Matt Meeker says. 

“As we reinvest in marketing this year, we expect to see direct-to-consumer (DTC) revenue return to growth in the second half of the fiscal year,” he adds. 

Segment declines

The strategy also weighed on performance across its business segments during the quarter. Revenue in the DTC segment, which includes the company’s airline business, BARK Air, fell 26% YoY to $74 million (€62.9M). BARK Air contributed $3.1 million (€2.6M) in revenue during the period.

Meanwhile, sales in the commerce segment dropped 18.3% YoY to $12.5 million (€10.6M), which BARK attributes primarily to timing differences in retail shipments. 

The company notes, however, that commerce increased as a share of total revenue, supporting its diversification strategy.

Profitability

Gross profit also declined 26% YoY to $54.3 million (€46.2M), while gross margin slipped to 62.7% from 63.6% a year earlier.

According to BARK, the lower gross margin was primarily driven by higher tariffs and the growing contribution of the lower-margin commerce segment. Net loss more than doubled YoY from $6.1 million (€5.2M) to $12.7 million (€10.8M).

Full-year performance

For the full fiscal year, BARK posted revenue of $394.8 million (€335.6M), down 18.5% YoY. Net loss widened to $39 million (€33.2M) from $32.9 million (€28M) in the previous fiscal year.

“We also made the decision to exit our kibble and toppers lines, a category where scale economics favor players far larger than us, so we can concentrate fully on the toys, treats and experiences that we believe represent BARK’s genuine competitive advantage,” the CEO says. 

The DTC segment recorded $324.9 million (€276.2M) in revenue. Meanwhile, commerce revenue increased 2.3% YoY to $69.9 million (€59.4M). Commerce and BARK Air collectively accounted for 21% of total revenue, up from 15% a year earlier.

The CEO notes that the commerce segment was marked by caution among its retail partners as tariff uncertainty weighed on the market. Meanwhile, BARK Air’s revenue more than doubled this year to over $12 million (€10.4M).

Tariffs

Interim CFO Brian Dostie notes that BARK expects to receive an additional $12.1 million (€10.3M) in refunds related to tariffs imposed under the International Emergency Economic Powers Act (IEEPA). 

Of this amount, $7.1 million (€6.0M) is tied to FY2026 cost of revenue, while the remaining $5 million (€4.3M) relates to current inventory or cost of revenue expected to be recognized in FY2027.

Guidance

For the first quarter of FY2027, BARK expects revenue to range between $77 million (€65.5M) and $79 million (€67.2M), compared with $102.9 million (€87.5M) in the prior-year period. The projected decline reflects a smaller DTC subscriber base following the reduced marketing spend.

The company expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to range from break-even to $1 million (€0.9M), compared with $0.1 million (€0.1M) in Q1 FY2026.

For the full fiscal year, BARK forecasts revenue of $325 million (€276.3M) to $340 million (€289M), down from $394.8 million (€335.6M) in FY2026.

Meanwhile, the company expects commerce and BARK Air to generate more than $100 million (€85M) in combined revenue, with commerce representing a larger share of total sales as it expands across wholesale and marketplace channels.

Adjusted EBITDA is projected to range between $7 million (€6M) and $10 million (€8.5M) in the year, a significant improvement from $0.2 million (€0.2M) reported in FY2026.