Ladies and gentlemen, thank you for standing by. And welcome to the BARK First Quarter Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Also, please be advised, that today’s conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Mr. Mike Mougias, Vice President of Investor Relations. Thank you, please go ahead.

Good afternoon, everyone and welcome to BARK’s first quarter fiscal 2022 earnings call. Joining me today are Manish Joneja, CEO, and John Toth, CFO. Today's conference call is being webcast and its entirety on our website, and a replay of the webcast will be made available shortly after the call. Additionally, a press release covering the company's financial results was issued this afternoon, and can be found on our Investor Relations website. Before we begin, I would like to remind you of the following information regarding forward-looking statements. The statements made on today's call are based on management's current expectations and are subject to risks and uncertainties that could cause actual future results and outcomes to differ. Please refer to our SEC filings for more information on some of the factors that could affect our future results and outcomes. Also, during today's call, we will discuss certain non-GAAP financial measures. Reconciliation to or non-GAAP financial measures are also contained in this afternoon's press release. Lastly, I would like to remind everyone that our fiscal year ended March 31. We are currently in fiscal 2022, which will consist of the last three calendar quarters of 2021 and the first calendar quarter of 2022. With that, let me now turn the call over to Manish.

Thanks, Mike. And good afternoon, everyone. Thank you for joining our first earnings call trading under the BARK ticker. I would also like to thank our employees, customers and partners for contributions and continued support. Given this is a first earnings call, I will take the opportunity to reiterate BARK’s mission, highlight the durable secular tailwinds that we are benefitting from and ultimately share why we believe BARK is uniquely positioned to capture market share and deliver long-term shareholder value. I will then turn the call over to John Toth, BARK’s CFO to walk you through our recent financial performance in more detail. First let's begin with some key highlights from our strong first quarter. Fiscal 2022 is off to a great start. We saw robust growth in subscription shipments, but in total revenue to the top-end of our guidance range. Our top-line was a gain by strong margins and healthy customer acquisition costs. In fact, our customer acquisition costs were lower last quarter during the quarter is going back to fiscal 2019, despite doubling our subscription base over that time period. Looking at the business in more detail. Revenue in our core direct-to-consumer segment came in at $105 million, an impressive 55% increase year-over-year. We added 280,000 new subscriptions last quarter, bringing total active subscriptions to over 1.9 million. We delivered a record 3.6 million subscriptions shipments in the quarter, a 52% increase compared to the same period last year. Our add-to-box feature which reflects our cross selling capabilities also drove significant growth, accounting for over $7 million in revenue in the quarter, a 174% increase compared to last year. Average order value was also up $0.87 cents to $29.21 versus last year. Turning to our commerce business, which includes sales of BARK products to retailers such as Target,…

Thanks, Manish. And thank you everyone for joining us today. There have been a lot of new beginnings at BARK, but today is a really significant one. This past Friday, we filed with the SEC our S-8, which registers employee options. The S-8 is the last filing associated with our transaction. And with the filing of our 10-Q tomorrow, we truly begin our life as a public company. As Manish mentioned, we hit the ground running in the first quarter of fiscal 2022, the quarter ended June 30, 2021. As for many companies this quarter’s year-over-year comparisons are dominated by the outbreak of COVID in the U.S. during this quarter last year. With that said, our growth this quarter is all the more significant given the relatively difficult year-over-year comparisons we faced given the surge in subscriptions this time last year. Nonetheless, we continued to see strong results as we profitably acquired new customers, while simultaneously retaining our existing customer base. We were also able to maintain healthy unit economics in spite of media rates rising to pre-COVID levels. The quick summary is our revenue margins CAC and other key performance metrics that best illustrate the health of the business are all on track or better than we expected. We are affirming our full year guidance, notwithstanding the freight and shipping headwinds that we and others are experiencing. Starting at the top of the P&L, total revenue for the quarter was $117.6 million, a 57% increase year-over-year. Our direct-to-consumer segment which represented 90% of our revenue last quarter, was $105 million, up roughly 57% compared to last year. This growth was primarily driven by a 52% increase in subscription shipments. Additionally, average order value AOV was up $0.87 to $29.21 year-over-year. These results largely reflect the continued performance of our…

[Operator Instructions] Your first question comes from the line of Steph Wissink from Jeffries. Your line is open.

Thank you. Good afternoon, everyone. And John, thank you for going through that detail on churn. And I think it's really important to just be compartmentalize the way you're reporting it versus some of your peers. Thank you for that. So my first question actually relates to CAC. I'm just curious if you can talk a little bit about the benefits you're seeing in some of your initiatives to acquire customers. And how we should be thinking about CAC going forward through the balance of this fiscal year.

Thanks Steph. Good to hear from you. We're very fortunate that our CAC, this quarter over the prior quarter was actually down 6%. So we have a really good team that's very nimble at managing across channels. We continue to pursue our operating goal of breaking even in 4 months. And for the past 4 quarters, we've been breaking even in 3 and even 2. So we're sort of on track for CAC don't expect it to move up terribly much in our fiscal Q3 calendar Q4, which is the gift giving season. You always see it go up a little bit, but average for the year, we feel like we're in a good place right now.

Okay, great. That's very helpful. And then the second thing I wanted to just unpack was the Eats -- the Eats business. Can you talk a little bit about some of the early learnings and apologize my dog Betty wanted to make her self-known on your conference call. So I want to just talk about a little bit about Eats, if you could.

Hey, Steph. It’s Manish. It’s still premature for us to share any breakdown for Eats right now. What we can share is not July was very strong month, turning out to be even stronger. And all this is basically with all almost your CAC. You're doing it through word of mouth, we're scaling faster. Our plan is to launch nationwide by the end of the fiscal year. So we are able to do that right now. We can ship nationwide, we are not actively marketing nationwide. And that's part of our plan for rest of fiscal year.

Okay, great. Last really quick one John, is one for you as well just on the G&A. If you can help us think through any changes to your assumptions for the balance of the year? You kind of use the first quarter run-rate as a good and reasonable run-rate?

We will be following up with some more detail in the Q on adjustments related to the transaction. So speaking operationally, because we have some lingering transaction costs --running through the P&L. But from an operational perspective, we're affirming our guidance for EBITDA, adjusted EBITDA of the balance of the year. This is an investment year for us. We're growing the teams for Bright and Eats, we're growing the technology for machine learning. So this quarter is in line with where we want it to be. And this quarter’s in line with where we want it to be. And we think we're going to end up where guidance had suggested.

Okay, John. Just for clarification, the shipping costs that you're calling out is inflationary. That would be in your SG&A, is that correct?

That's right. Shipping and fulfillment is in SG&A. But I wouldn't characterize it as inflation. The real reason it's up is volume. We just ship more packages. So we are seeing rate increases as everybody in the U.S. is on shipping and fulfillment, but the driver for the increase in SG&A was we grew shipments over 50% over this quarter last year. So that just moves the number opposite ship more packages. It's revenue related. Does that make sense?

Okay, very clear. Thank you very much.

Your next question comes from the line of Maria Ripps from Canaccord. Your line is open.

Great, and congrats on your first quarter as a public company and great results. I just wanted to follow up on Eats. Can you maybe share with us where you are in the logistics investment cycle there? And can you talk about sort of what kind of cross sell uptake you've seen today in markets where Eats is available? And sort of when do you think would be sort of a good point to start supporting the food rollout with marketing?

Hey, Maria. This is Manish. So for Eats, as mentioned, still early days. But given our success in the play category and the data and relationships we can never assume that. We are optimistic about Eats being successful has a much larger time competitive play. From a nationwide perspective, we do ship from the East Coast right now. Our unit economics allow us to be able to serve the country. Although we are still working basically across East and West helps to serve the country. We have made it available, so if you discover Eats, we will serve you but we are not actively marketing into the entire 48 states. That's obviously the first question. And the second about in terms of investment. In terms of breaking apart Eats, we don't really do that right now. We believe we'll be doing it next year.

Got it. That's very helpful. And maybe just a quick follow up. Can you talk about sort of your retail partnerships? How important are those in your sort of brand building effort? And have you seen any sort of -- or have you done any studies that would suggest sort of stronger brand recognition in regions where you have sort of broader retail presence?

So from retail or commerce segment perspective, I think we always rollback our mission of making all those happy, which means that we will serve you even if you're not a direct-to-consumer customer. It's a profitable business. It helps us raise awareness. We and multiple partners, we announced the partnership with Lowes, there's more coming. In all those partners, we work backwards from that partners’ customer to design the product and serve them. So we don't -- I don't have the data right now to break down in terms of conversion. I think your question is basically what percent would convert over into direct-to-consumer subscription? So we don't have a breakdown, but we've seen that the brand awareness raised across the partnerships of different cohorts around the country where we do not serve to that scale yet.

Got it. That's very helpful. Thank you very much.

Our final question comes from the line of Nick Jones from Citi. Your line is open.

Great, thanks for taking the questions. Maybe a follow up on the commerce segment. If you maybe frame what there many opportunities in terms of retailers you can partner with? And then maybe once you do partner, what is the ramp look like to start seeing material sales. And then I have a second question. Thanks.

Hey, Nick, good to hear from you. It’s John. We see a lot of room to run in retail, but we always see it as a baseline about 15% of our total revenue. We want to make sure that retail is as profitable as the DTC business. And we're just in the early days of rolling out to all the locations and some of the big names we have like PetSmart, Petco, Target et cetera Lowes. So a lot of room to run. The problem is it has to keep up with a fast growing DPC business. So we expect it to be -- always be at about that 15% of total revenue range. Is that helpful?

Yep, that's helpful. And maybe --

Let me add one more thing to that, Nick. So another advantage of aside from awareness and profitable businesses, retail were viewed as allows us for asset life expansion and serving international consumers that can inform our strategy for national down the road when we are ready. So that's something that we think about is in terms of retail partnerships, like Costco and other partners, how can we actually expand on the asset like fashion.

Got it. And then maybe taking a step back, your categories are really unique. I think some of the other e-commerce players are really lapping tough comps, because people are kind of stepping out of the house, spending less time on the screen, maybe it's going back with delta variant but in a dog category, a lot of people can bring their dogs outside of the home. So I guess any thoughts on the current COVID landscape and how you guys are looking at the back half is kind of uncertainty builds? Do you see any pullback on people bringing dogs into the home or are things kind of still chugging along as they were before? Thanks.

So there are a few points on that line. One is that there are 63 million households with dogs right now, we're in less than 2 million. And of those less than 2 million, our primary injection point had been placed. Now, if you think about injecting into different categories about home, food and health, which has highest TAM and higher AOV, cross sell, up sell opportunities, those are very critical. So we've seen industry being agnostic of these cycles that are hitting us. Now the results that you're seeing -- that we shared today is that we are actually out of CAC that’s lower than 2019. We are basically LTV CAC of 5. We are acquiring customers that are more valuable throughout the box essentially. So those are the good tailwinds that we've seen. And because of that last COVID was actually one of our really strong quarter, last quarter as well. So we’re pretty bullish on how this is kind of unraveling and as or not on all these dogs in our lives, you can look at the net addition of dogs in our lives, that's actually much positive. And it's not just a COVID tailwinds it's been happening for years, COVID get isolated to a large extent.

Great. Thanks for taking the questions.

This concludes today's conference call. Thank you for your participation. You may now disconnect.