On the heels of its announcement that the company had been acquired by American Exchange Group in a $39 million deal, Allbirds, Inc. reported in its 10-K annual report filing with the Securities & Exchange Commission that the company’s net revenue decreased 19.7 percent for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
The company reported that the year-over-year (y/y) decrease in 2025 was primarily due to a $23.1 million decline in its U.S. Direct business, driven by declines in both Retail and E-commerce business resulting from store closures.
As of December 31, 2025, Allbirds’ physical retail channel consisted of 23 company-operated stores in the United States and the United Kingdom, with the majority in the U.S. The company closed 10 retail stores in 2025 (nine in the U.S. and one in the UK) and 15 retail stores in the U.S. in 2024. During the first quarter of 2026, the company closed the remaining full-price stores in the U.S. market.
The company said 2025 net revenue also declined by $11.9 million in its international business, primarily due to our transition to third-party distributors.
Profitability & Expenses
Gross profit decreased 22.8 percent year/y in full-year 2025. The decrease in gross profit was said to be primarily driven by the decreases in net revenue and cost of revenue.
Gross margin declined to 41.0 percent of net revenue in 2025 from 42.7 percent in the year ended December 31, 2024, said to be primarily due to a higher mix of digital and international distributor sales, as well as increased duties and lower average selling prices in the U.S. business.
Selling, general, and administrative (SG&A) expense decreased by $40.9 million, or 30.7 percent, for 2025 as compared to the year ended December 31, 2024. The decrease was said to be primarily driven by a $18.3 million decrease in personnel and related expenses, a $10.0 million decrease in rent and utilities, a $4.4 million decrease in depreciation and amortization, and a $3.7 million decrease in stock-based compensation, as well as reductions in other types of operating expenses.
Marketing expense increased by $3.6 million, or 8.6 percent, in 2025 compared with the year ended December 31, 2024. The increase was said to be primarily driven by an investment in “upper funnel marketing initiatives” in the first quarter of the year.
Impairment expense increased by $2.4 million for 2025 as compared to the year ended December 31, 2024, reportedly due primarily as a result of a non-cash impairment of property and equipment and operating lease right-of-use assets associated with certain of owned retail stores of $3.5 million, partially offset by the prior year impairment of an equity investment of $1.8 million.
Restructuring expense decreased by $1.2 million in 2025 compared to the year ended December 31, 2024, primarily due to lower costs incurred as part of the company’s strategic initiatives. In 2025, restructuring expenses related to severance and other employee-related benefits were reportedly incurred as a result of strategic actions taken in the fourth quarter.
In the prior year, restructuring expenses related to severance and other employee-related benefits, and professional service fees.
Interest (expense) income changed by $4.6 million, from income to expense, for the year ended December 31, 2025, as compared to full-year 2024. The change was attributed to a decrease in interest income of approximately $3.5 million from money market funds and an increase in interest expense under the company’s Credit Agreement.
Other income increased by $1.1 million y/y in 2025 as compared to the expenses in 2024. The increase was primarily due to greater gains on the termination and modification of certain operating leases of approximately $0.4 million and to fluctuations in foreign currency of approximately $0.3 million in the current period.
Income tax provision decreased by $1.5 million, or 79.0 percent, for 2025 compared to 2024, said to be primarily due to the mix of taxable income in foreign jurisdictions that resulted in differences in the effective tax rates and a change in the valuation allowance.
The company’s net loss narrowed to $77.3 million in 2025, compared to a reported net loss of $93.3 million in 2024.
Adjusted EBITDA reportedly improved by $10.6 million for full-year 2025 as compared to full-year 2024which was attributed primarily to lower operating expenses, partially offset by lower gross profit.
Adjusted EBITDA margin declined from negative 36.9 percent in 2024 to negative 39.0 percent for full-year 2025. The change was said to be primarily driven by the year-over-year decline in revenue, partially offset by the same factors outlined.
The bottom line for the sale of the once high-flying public company was that there was and is “substantial doubt” about its ability to “continue as a going concern” when the company prepared its 10-K filing.
As a public benefit corporation (B Corp.), Allbirds is subject to increased derivative litigation concerning its duty to balance stockholder and public benefit interests, the occurrence of which the company said in its 10-K may have an adverse impact on its financial condition and results of operations.
Editor: It’s bad enough for a nascent company to have Wall Street looking over its shoulder as a public company but to also have the responsibilities of B-Corp status and a sustainability-first deliverable is not good to hanging over a CEO’s head when product should be the No. 1, No. 2 and No. 3 items on their priority list.
Image courtesy Allbirds, Inc.
