Bark Inc closed the second quarter of fiscal 2026 in a markedly different posture than the one investors encountered a year earlier. The direct-to-consumer pet products company that built its identity around a brightly colored monthly subscription box now derives a smaller share of revenue from that box than at any point since the 2020 holiday cycle, and the cost structure that once made Wall Street skeptical of the entire subscription-box category has compressed meaningfully as the company leaned harder into its higher-margin consumables and dental businesses. The June quarter delivered revenue of $117.6 million, an adjusted EBITDA profit of $3.1 million, and a net loss of $5.7 million, with the topline down roughly 4% from the prior-year period but the bottom-line metrics running well ahead of consensus. The juxtaposition of a contracting revenue line and expanding profitability sits at the heart of the equity story and explains why shares reacted favorably in the session following the August 6 filing.
The subscription business itself, anchored by the flagship BarkBox and increasingly complemented by Bark Bright dental products and the Super Chewer line, generated $66.1 million in revenue during the quarter, representing a year-over-year decline of approximately 6.7%. New subscription activations fell to 92,000, down from 110,000 a year ago, reflecting both deliberate tightening of marketing spend and a softer environment for discretionary consumer subscription products. The company ended the period with 437,000 total active subscriptions, a sequential decline of roughly 6% and a year-over-year decline in the high-single-digit range. Average revenue per subscription held essentially flat in the low-$30s range, suggesting that customer retention and pricing discipline have stabilized even as the gross subscriber count erodes. Management framed the subscriber softness as a feature rather than a bug, noting that the prior strategy of pursuing growth at any cost had produced a customer base with a less favorable lifetime value profile than the cohort acquired under the current discipline.
The commerce segment, which includes the BarkShop e-commerce platform and direct-to-consumer sales of toys, treats, dental products, and apparel, generated $50.7 million in revenue, an increase of approximately 3% over the prior-year period. The growth here, modest in absolute terms, carried significance because commerce revenue carries materially higher contribution margins than subscription revenue, and the segment's mix shift provided the leverage that allowed the consolidated business to expand adjusted EBITDA despite the topline decline. The Bark Bright dental line, which the company has positioned as a structural growth engine rather than a single-product story, continued to gain traction, with management citing double-digit growth in the dental SKUs and expansion into new retail partners during the quarter. The retail expansion of Bark Bright is a quiet but important development, because it diversifies the revenue base beyond the company's owned e-commerce properties and creates a lower-cost-of-acquisition channel for incremental customers.
Gross margin expanded by approximately 360 basis points year over year to 59.4%, the highest second-quarter gross margin in the company's history as a public entity. The drivers were several and reinforcing. The mix shift toward commerce and consumables played a role, as those categories carry meaningfully higher contribution margins than the subscription box. Procurement initiatives, including the consolidation of toy sourcing with fewer vendors and the renegotiation of key supplier contracts, contributed roughly 80 basis points of the expansion. Lower freight costs, both ocean and domestic, added another 90 basis points. And reduced inventory provisions, reflecting both cleaner stock positions and a less promotional environment, contributed the remainder. The combination produced a gross profit figure that, while lower in absolute dollars than a year ago due to the revenue decline, was structurally healthier on a per-unit basis.
Operating expenses declined by approximately 7% year over year, with marketing spend down roughly 13% as the company rebalanced its acquisition budget toward higher-LTV channels. Selling, general, and administrative expenses were essentially flat in absolute terms, declining modestly as a percentage of revenue. The net effect of the gross margin expansion and the operating expense discipline was a 480-basis-point improvement in operating margin relative to the prior-year period. The company reported an operating loss of $5.0 million for the quarter, narrowed from an operating loss of $11.4 million a year ago, and an adjusted EBITDA profit of $3.1 million, a swing of more than $7 million in year-over-year terms. The adjusted EBITDA result marked the fourth consecutive quarter of positive adjusted EBITDA, a milestone that management emphasized in its prepared remarks and that several buy-side analysts cited as evidence that the path to sustained profitability is now visible.
Liquidity remains comfortable. The company exited the quarter with $129.1 million in cash and cash equivalents, no outstanding borrowings under its revolving credit facility, and a working capital position that has steadily improved over the past four quarters. The balance sheet carries no long-term debt of substance, and the company generated $4.6 million of cash from operations during the six months ended June 30, 2026, a meaningful improvement from the cash usage in the prior-year period. The combination of a clean balance sheet, a positive adjusted EBITDA trajectory, and disciplined working capital management provides the company with operational flexibility heading into the seasonally important second half, which includes the back-to-school period and the early ramp to the holiday quarter.