Ladies and gentlemen, thank you for standing by. My name is Abby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the BARK Third Quarter Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Mike Mougias, Vice President of Investor Relations and FP&A. You may begin.

Good afternoon, everyone, and welcome to BARK's Third Quarter Fiscal Year 2026 Earnings Call. Joining me today are Matt Meeker, Co-Founder and Chief Executive Officer; and Zahir Ibrahim, Chief Financial Officer. Today's conference call is being webcast in 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 I pass it over to Matt, I want 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. We will also discuss certain non-GAAP financial measures on today's call. Reconciliation of our non-GAAP financial measures is contained in this afternoon's press release. And with that, let me now pass it over to Matt.

Thanks, Mike, and good afternoon, everyone. Before we dive into the quarter, I want to briefly acknowledge the recent headlines regarding potential strategic proposals you may have seen. Given the nature of those proposals, we are unable to comment on them during today's call. Today's discussion will center on our third quarter results and how we're continuing to drive our business results. With that said, let's jump in. Our priorities throughout fiscal '26 have remained consistent, strengthening the business by improving profitability and operating with discipline in a volatile macro environment. Entering the second half of the year debt-free with a leaner cost structure and greater financial flexibility has helped us navigate tariffs and broader market uncertainty while continuing to invest thoughtfully in the areas that matter most. Turning to the quarter. Adjusted EBITDA was negative $1.6 million, within our guidance range and consistent with last year. We also generated $1.6 million of positive free cash flow, driven in part by inventory normalizing following a buildup in the first half as tariff rates came down. We plan to continue to optimize inventory levels to further support cash conversion in the near to midterm. Total revenue of $98.4 million came in below our guidance range, driven in part by a deliberate pullback in marketing spend. Marketing expense was approximately $11 million lower than the third quarter last year, reflecting our continued emphasis on bottom line durability and disciplined capital deployment. Nonetheless, we delivered a healthy 62.5% consolidated gross margin with both our direct-to-consumer and commerce segments showing year-over-year and sequential improvement. We've been deliberate about where we invest and where we don't, focusing investments on areas with clear returns rather than chasing short-term growth. One of the areas we've consistently emphasized this year is diversification, and we continue to see progress…

Thanks, Matt, and good afternoon, everyone. Let me provide some additional color on our third quarter results. Starting at the top. Total revenue for the quarter was $98.4 million. As Matt discussed, revenue came in below expectations, driven primarily by a measured pullback in marketing spend as we prioritize profitability and cash generation during the quarter. That said, we are seeing promising trends in our DTC business around the quality of customers we're acquiring. This includes higher AOV and improved efficiency across acquisition channels. Additionally, retention remains stable and the customers we're bringing in today are of a higher value than those acquired through more promotionally driven strategies of the past. This is encouraging given the challenging macro backdrop. Commerce delivered $18.8 million of revenue in the quarter, roughly $1.5 million below last year, partially driven by timing shifts. Overall, our Commerce segment remains a key part of the business from both a growth and a margin perspective, and we expect it to remain an important contributor to our overall revenue mix as we add new partners, introduce additional SKUs and expand distribution within existing retailers. Turning to gross margin. Consolidated gross margin was 62.5% for the quarter. From a segment standpoint, D2C gross margin, which includes Air, was 66.4%, 10 basis points above last year. Commerce gross margin was 46.3%, up 240 basis points year-over-year. The margin improvements we saw across the business last quarter not only reflect the quality of revenue, but also the important work the team has done mitigating tariff impacts through a variety of tactics, including alternative sourcing, packaging and in Commerce instituting a price increase. Turning to operating expenses. Total marketing spend was $16.1 million, down $11.3 million versus last year as we continue to prioritize premium customers CAC efficiency and profit performance. Shipping…

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.