Allbirds, Inc. reported its operating loss on an adjusted basis year over year in the third quarter as sales slumped 23.3 percent. Earnings were slightly above guidance while sales were in line with guidance. The eco-friendly footwear brands reduced its sales guidance for the year while narrowing its earnings outlook.

Third Quarter 2025 Overview

  • Third quarter net revenue of $33.0 million, within the company’s guidance range of $33 million to $38 million, a decrease of 23.3 percent versus a year ago.
  • Third quarter gross margin declined 120 basis points to 43.2 percent versus a year ago.
  • Third quarter net loss of $20.3 million, or $2.49 per basic and diluted share.
  • Third quarter adjusted EBITDA loss of $15.7 million, slightly above the company’s guidance range calling for a loss in the range of $20 million to $16 million.
  • Inventory at quarter end of $43.1 million, representing a decrease of 25.0 percent versus a year ago, in line with expectations.
  • As of September 30, 2025, the company had $23.7 million of cash and cash equivalents and $12.3 million of outstanding borrowings under its asset-backed $50.0 million revolving credit facility.

“We’re pleased to deliver third quarter results in line with our expectations, highlighted by a robust flow of new product introductions – many of which met with strong customer response,” said Joe Vernachio, CEO. “Entering the final months of the year, we will continue to support our product engine with compelling marketing content to capture consumer mindshare and reignite growth. Throughout the holiday season, we will be spotlighting gifting ideas and emphasizing Allbirds’ core principles of Comfort, Style and Sustainability.”

“Our teams are focused on accelerating progress under our turnaround in the quarters ahead,” added Vernachio. “At the same time, we are taking definitive steps to further reduce costs, enhance liquidity, and pursue value-creating opportunities.”

Third Quarter Operating Results
In the third quarter of 2025, net revenue decreased 23.3 percent to $33.0 million compared to $43.0 million in the third quarter of 2024. The year-over-year decrease is primarily attributable to structural changes, including impacts from international distributor transitions and planned retail store closures.

Gross profit totaled $14.2 million compared to $19.1 million in the third quarter of 2024, and gross margin declined 120 basis points to 43.2 percent compared to 44.4 percent in the third quarter of 2024. The decline in gross margin primarily reflects a higher mix of digital and international distributor sales, as well as increased duties in our U.S. business, which offset higher average selling price.

Selling, general, and administrative expense (SG&A) was $21.7 million, or 65.7 percent of net revenue, compared to $31.0 million, or 72.0 percent of net revenue in the third quarter of 2024. The decrease is primarily attributable to lower personnel expenses, occupancy costs, stock-based compensation expenses, and depreciation and amortization expenses.

Marketing expense totaled $11.7 million, or 35.5 percent of net revenue, compared to $9.9 million, or 22.9 percent of net revenue in the third quarter of 2024. The year-over-year increase was primarily driven by increased digital advertising spend in support of new product launches.

Net loss for the third quarter of 2025 was $20.3 million compared to $21.2 million for the third quarter of 2024, and net loss margin was 61.6 percent compared to 49.3 percent in the third quarter of 2024.

Adjusted EBITDA loss for the third quarter of 2025 improved to $15.7 million compared to a loss of $16.2 million in the third quarter of 2024, and adjusted EBITDA margin declined to (47.7) percent compared to (37.8) percent in the third quarter of 2024.

Nine Month Operating Results
Net revenue in the first nine months of 2025 decreased 21.7 percent to $104.8 million compared to $133.9 million in the first nine months of 2024. The year-over-year decrease is primarily attributable to structural changes, including impacts from planned retail store closures and international distributor transitions.

Gross profit in the first nine months of 2025 totaled $44.8 million compared to $63.6 million in the first nine months of 2025, while gross margin declined to 42.7 percent in the first nine months of 2025 versus 47.5 percent in the same period a year ago. The decline in gross margin is primarily due to channel mix, with a lower percentage of sales coming from our retail business and a higher percentage coming from our digital and distributor channels, as well as increased promotional activity and higher inventory adjustments.

SG&A in the first nine months of 2025 was $71.0 million, or 67.8 percent of net revenue, compared to $104.2 million, or 77.8 percent of net revenue in the first nine months of 2024. The decline is primarily attributable to decreases in personnel expenses, occupancy costs, depreciation and amortization, and stock-based compensation.

Marketing expense in the first nine months of 2025 totaled $32.3 million, or 30.8 percent of net revenue, compared to $29.4 million, or 21.9 percent of net revenue, in the first nine months of 2024, with the increase primarily driven by planned investments in the company’s new brand marketing campaign in the first quarter.

Net loss in the first nine months of 2025 was $57.7 million compared to $67.6 million in the first nine months of 2024, and net loss margin was 55.1 percent compared to 50.5 percent in the first nine months of 2024.

Adjusted EBITDA loss in the first nine months of 2025 was $46.9 million compared to a loss of $50.9 million in the first nine months of 2024, and adjusted EBITDA margin declined to (44.8) percent compared to (38.0) percent for the first nine months of 2024.

Balance Sheet Highlights
As of September 30, 2025, Allbirds had $23.7 million of cash and cash equivalents and $12.3 million of outstanding borrowings under its $50.0 million asset-backed revolving credit facility. Inventories totaled $43.1 million, a decrease of 25.0 percent versus a year ago, which is in line with expectations.

2025 Financial Guidance
Allbirds is providing the following financial guidance for 2025, which includes approximately $23 million to $25 million of impact to revenue associated with the transition from a direct selling model to a distributor model in certain international markets and the closure of certain Allbirds stores in the U.S.

Full Year 2025

  • Net revenue of $161 million to $166 million compared to previous guidance of $165 million to $180 million
  • U.S. net revenue of $127 million to $131 million
  • International net revenue of $34 million to $35 million
  • Adjusted EBITDA loss of $63 million to $57 million, compared to prior guidance of $65 million to $55 million

Fourth Quarter 2025

  • Net revenue of $56 million to $61 million
  • U.S. net revenue of $47 million to $51 million
  • International net revenue of $9 million to $10 million
  • Adjusted EBITDA loss of $16 million to $10 million

Image courtesy Allbirds