BARK, Inc. (BARK) Earnings Call Transcript & Summary

Good morning, everyone. I'm Michael Lasser, Hardline & Broadline and Food Retail Analyst from UBS. And we could not be more excited to have the team from BARK with us this morning. It is a super interesting story, and it's not every day that we get to hear from a founder of a business and walk through the story of how a business started from nothing to a really impressive operation today. So with us is Matt Meeker, who is the founder and CEO, Zahir Ibrahim is recently the CFO within 6 months. And Mike Mougias is the company's Head of Investor Relations.

What I do want to start is because it's not every day that we get to hear from a founder of a business. We want to hear about the story of how BARK was established. Where did you see the market opportunity? You had 2 cofounders, walk us through from inception to -- and we'll get into some of the more recent events, but just give us a sense for what the story is.

Sure. The story is it came from my dog who…

In 2011.

In 2011, that's right. So I had...

In your serial entrepreneurish.

I am. So prior to that time, way back in 2002... Let's go back…

You were 4. Go ahead.

4.5 -- let's go back even further. 2000, I started the company and ran that for about 18 months. We made every mistake that you can make on starting the company. So it's an 18-month lesson of what not to do and wrap that up at the end of 2001, roll into 2002, started meetup.com and tried to do everything in the opposite way of the previous venture. That turned out much better. We grew quite quickly. And I worked on that for about 7 or 8 years, at which point I moved into a venture capital rule and was working -- I was running an incubator here in New York. And so hosting about 20 different 1- to 3-person companies trying to make them successful as founders. Which was very fun. And in that time, I brought this little great an into my life. Whose name is Hugo Yes. And I became assessed with Hugo. And believe it or not, New York City pet stores don't, they don't stock the shelves for great teams because not many [indiscernible]. So I thought I want to spoil this guy, I want to make them really happy and I'm not finding it at the local pet stores here. So what could I do? And from that came BarkBox. And the idea of we will serve your dog based on their size, small, medium or large, we'll find them size appropriate toys or treat than the 2-year once a month. I thought it was a fun little side project, and it took off, dragged us in. And here we are, as you said, now 12 years later, 11.5 years later. And it's a completely different company, but still that foundation of every dog is special and unique, and we're able to our technology and our data to serve them in a very individual way.

And your journey has been interesting. You, like many founders had taken a step back from the business from the day-to-day, I should say, of the business. And in the last couple of years, you've come back into the CEO role. Give us 2 things. Walk us through what that has been like. And 2, what are your observations around now that you've retired yourself in more the day-to-day operations of the business?

It's a different business for sure. Yes, I stepped away as we were heading to becoming a public company.

And you didn't want to deal with knuckleheads like me.

That’s exactly. Like none of the knuckleheads. And...

That's a technical term.

Okay. And so he stepped out. And I got dragged back in. That happened about 14 months ago, and I'm really thrilled that it did. Sadly, Hugo passed about 15 months ago. And so the thing that really brought me back was this responsibility to him his legacy, if it's got a live -- its's got to outlive me. The brand does because it's for him. So a responsibility to make that happen. And the public market part of it is just who we are. It's a new environment than a private one but I'll learn a lot, and it's actually really fun talking to knucklehead like I really enjoy it.

Now with that being said, as Hugo as its inspiration for this business, it turns out you chose a good category, one that in the midst of BarkBox’s growth, we saw the emergence of how relevant online can be in this category. So how are you thinking about the growth in online pet even after there's been a pretty substantial increase in penetration? And is the addressable market maturing from here?

It doesn't appear to be. This trend of the humanization of pets has been going on since probably the early '90s, if you look at the spend and how it's picked up and how the audience has evolved in terms of who has pets in their home and how they treat them. And that's U.S. based. The rest of the world might be a generation behind us and sort of accelerating. But in the U.S., you've got that humanization trend and it seems to continue and accelerate. So this isn't -- certainly there was a surge in the pandemic, but you have 3 decades of very steady growth through any recession through any downturn keeps going and going and going and certainly depends on the source you look at. But what I've seen is over the next 5 to 10 years, we expect 8% compounded annual growth to continue just year-over-year-over-year. So the category itself, there's a lot of passion for and a lot of potential. And then you look at that, I believe last year, it was $124 billion of spending on our pets in the U.S. we had just over $0.5 billion of that. So that means there's $123 billion available for us. There's a big, big opportunity. We've scratched the surface in 1 or 2 categories. We've grown a lot in the toy category, and we've captured a lot of that market. We've grown a lot in the tree category, but it's a big one, and we have great products, great permission to play, and we've grown so far without selling one thing on a retail shelf. So big opportunity there. And then you get into the behemoths of health care and food. And again, those are early days for us. So huge growth potential for us across all that.

And for those who are a little newer to the BarkBox story, what is the typical profile of a consumer who at least has been the legacy of the business? And how has that changed over time?

Yes. Well, they've always had 4 legs, usually a tale. No, it's very much a BARK thing of we think of the dog as the customer. That's who we're trying to serve. And if we could arm them all with a credit card, we'd love that and get the people out of the way. But no, the consumer for BarkBox found us. We didn't go in search of a demographic. So initially, you found a younger millennial or Gen Z audience more coastal, more urban, heavily skewed to female. So about 80%, and -- but over time, as our product line has evolved, we've had more diversity there as well. And so -- and then certainly, the distribution through 40,000 retail channels has brought us into new markets and brought new people into the fold. But it is one of those categories where the demographic data like that, is, I'd say, a little less relevant because at the core, who we're serving is someone who loves their dog and wants to make their dog happy. And maybe a subscription toy and treat box isn't right for you, but we all feed our dogs. We all care about their health, and we want to take care of their teeth. We want them to be happy and healthy. So as we continue to expand our product line and our ways of distributing those, we can meet just about any customer who loves their dog.

And this is probably a good opportunity to just share a little bit about how the business has evolved originally as a traditional subscription model. And while that still represents a good portion of the total, what BarkBox has really developed is this engine of product development. And now you've been able to leverage that product development engine in a way that you're distributing to your point through 40,000 doors. And while there is still the core of the financial performance comes from the subscription business; this evolution has occurred over the last several years. Is that...

That's very well said. That's very accurate. So if you go back again to 2011 or '12 when we first started, our BarkBox was assembled with third-party products, toys and treats that we went out and curated and put together. And at some point, we started to know our customer very, very well. We send it out and we'd asked them what they thought of it. And they tell us, I love this toy for this reason, but this one didn't make the cut for whatever reason. And then we started -- we collected enough information to find out it's not as simple as this toy good, this one bad. But this one is good for these types of dogs. This one is not a great fit for that type of dog. And we found that we could take that -- all that information, put it into product development and serve those dogs more individually and faster and better and more efficiently than outsourcing it. So BARK started as a subscription company in 2011. We started our product development in about 2015. And today, I'll put our product development team up against anyone -- it's the best product development you've ever seen, certainly in the toy side on the treat side and newer we're into dental and food. But BARK has evolved from a subscription company to a product company. And so now it's just where are we selling that? And what's our advantage in making better products than everyone else. It's 2 million-plus relationships where they tell us what they think every single day. And we take that right over to our designers, and we say, here's what we're learning, make better stuff with that information.

And the degree to which Matt can tell you about some of the complexities of these products is amazing. For example, a lot of dogs will chew on bones that help -- that are supposedly dental related. But Matt will make the point that truly to be cleaning our 4-legged friends teeth, you need enzymes in the product you're most of these products don't have enzymes and BARK created a product that has enzymes and so it truly does there's a health and wellness element to it. Is that a good example of...

That's a great example, yes. And those -- there are very successful commercially successful products called what I would call dental treats on the market.

[ Means. ]

Yes, they smell good, they're shaped like a toothbrush. They do provide -- think of it as like us brushing our teeth with a toothbrush with nothing on it. So you get some benefit there, you're scraping some stuff off your teeth. But if you really want the oral hygiene, you need the right mixture put together, the right components. As you said, the enzymes -- so we created that gel, you apply it to a chew stick, but also helps create the teeth, you handed to your dog. In tens of thousands of households now that's a daily routine and the dogs love it. The people love it. So it's -- and it's providing a great health benefit.

Coincidentally, Jessica Lasser was searching for some dental products. She came across the BarkBox dental products and said these would be good for Brodie Lasser who is considered to be a good dental customer, but I was able to drop my enzyme knowledge on her. He was very impressed. Now with that being said, it seems like one of the more interesting elements of the BarkBox investment case is that the heritage of the business was in toys and treats, but you -- there has been a rollout and an expansion of a variety of different product categories. So give us a sense for what the assortment looks like right now where the development for each of these categories are and how BarkBox going to market to try and cross-sell the different products to its existing customer base and attract new customers with this expanded assortment. I know there's a lot in there.

There's a lot in there. At the highest level, the big categories that we serve are toys, treats dental, as we just talked about and food. And within food toppers. And those are the big categories. Toys Again, I think we're at the top of the game. There's big distribution directly and through retailers. There's room for growth, but it's the smallest of those markets. It's the one where we've had the most growth and it's the smallest overall market opportunity. Next would be treats where we have tremendous distribution depending on what you throw on the treat category or don't, we would be considered on a revenue basis, a top 5 treat seller in the U.S., which probably would surprise a lot of people. On a revenue volume, about a year ago, Blue Buffalo bought a treat business from Tyson Foods that has similar revenue, similar profile, and they bought it for $1.2 billion. This is us just selling treats directly to our customer. Not one has hit a retail shelf. So that's a big, big opportunity in a $10 billion-plus category. We've scratched the surface, but we have a lot of permission, a lot of knowledge, a lot of history, huge growth potential for us. So that's probably the next big opportunity for us to seize. Then you move to dental, we have good momentum. We've learned a lot. Again, it's all direct so far, and we have a very unique product. Next thing is on to retail, get that distribution. And the big advantage we have there is we've spent the last year getting our supply chain in shape. And what that will allow us to do is bring that product to market much more efficiently and probably save the customers some money while also helping the dog. And then last but not least, is food, which is the biggest of the big categories in pet. We relaunched our food offering in August, and we've taken a breed-based approach to that, which means if you have a German Shepherd, we have a food that is [indiscernible]. And we haven't reached every breed yet. Opportunity. We haven't reached a great day...

[indiscernible] one hungry little puppy. Big market opportunity.

But it's a very unique positioning, and we've had a really strong reception to it. So since relaunching that in August, it's grown very quickly. What we've seen just this quarter that's not quite done where we're going to add up this quarter is we're going to see about twice as many orders from that effort than we saw last quarter. So sequentially, we're doubling. So it's moving very quickly, great customer feedback. I think we've unlocked something pretty big there. And if that continues through the year, then we'll probably go to retailers a year after, and we keep growing.

So I want to -- a lot of interesting elements of the story so far. I want to unpack a little bit of the heritage of the business, which is a subscription mark. I think there's 2 interesting questions here. Number one, is there some fatigue from the consumer just about whether it's subscriptions overall or subscription boxes. And as part of that heritage, the foundation was on toys and toys are a discretionary category in an uncertain economic environment. How are you thinking about the outlook for toy consumption in the pet category in general over the next several months?

Yes. I don't know about the first part of the consumers' attitude towards subscription or subscription box. There's kind of both sides to it where people say they don't like the subscription relationship for a variety of reasons. But then again, we all have [ Verizon ] in our pocket and Netflix on our screen in Spotify. So what we see in terms of the customer interaction, the thing I hear the most from every customer is that we've ruined packages coming into their homes because the dog now believes every package is for them. So Amazon arrives and the dog has their knows right in it.

You can't be in a Zoom call in the Lasser household when the FedEx truck pulls up because Brodie very excited. Right.

So it's a very positive category. But to your point, it is discretionary or more discretionary in food. It's the smallest of the market opportunities we serve. And not a subscription box of toys is not the right product for everyone. We get that. That's fine. So if that were our only business and our only opportunity, then things would be slow going here. But we're -- we have, again, treats, toppers, food, dental and 40,000 retail doors and then a whole world to serve and more ideas beyond those categories. But the toy business itself and the subscription business is very important to us. What that represents is this year through 3 quarters of the year, 740,000 new customers coming into BARK and what we've become very good at is serving them really well with that subscription box and then say, by the way, did you know we have all this other stuff? Today, that's very difficult. It means opening an e-mail and engaging with it and that's not something we are like people don't. People don't react…

[indiscernible] anymore.

Right. They drop over here in this folder. So you take your small percentage and you introduce them to new things, but we still have a pretty good outcome. The real opportunity is where we're right on the edge of it is on a very new consolidated platform, where all of our products live together. And so those 740,000 new customers through 3 quarters, not for a full year. Coming into that, we'll come into that consolidated platform in weeks, not months. They'll come in there. Well, it came for a BarkBox, they'll say, that's good. I'll check out, but they'll see there's a whole world of products within BARK and we'll cross-sell those more aggressively and let them know why they're important for their dog.

And this is a consumer conference. So we've been asking all companies what they're seeing from the consumer. It's a very, we'll call it, fluid economic environment. Have you noticed any changes in consumer behavior in response to some of the economic dynamics. In addition, what are you looking for to gauge the outlook and recovery in demand in the toy category in general because it is relatively discretionary?

Yes. In that category, a flight to quality that a customer would rather pay a bigger dollar amount for certainty around the quality of the product and that it's going to last. So we've seen our super cure more durable toys selling much, much better, both directly and through retailers, than our plush toys that could be torn apart in a day or 2. We've seen that trend. Certainly, more I'd say like more towards the -- let's to the less discretionary product, I have to say that, right? And so that's where we see that acceleration in our food business and in our dental business, which we love because of those, again, are the newer categories for us, the more niche and categories with the biggest growth potential. So through it all, what you see overall is certainly that customer is saying, my dollar for everything, but certainly for my pet, just doesn't go as far as it once did. So I still need to feed them, and that's where most of it goes. But the one very, very interesting trend that has persisted through all of our changes and all the market changes is our retention. And it has been steady and steadily improving in recent months. So what that tells me is if you become a subscriber of our product, and you've experienced it, you have a more and more difficult time taking that away from your dog. You've had that experience of bringing in your home, opening the box the excitement from the dog, your excitement, you can't take it away.

Yes, absolutely. It's the most resounding measure of the customer satisfaction if someone is going to continue to view customer. Revenue growth has slowed. Is it right to think that, hey, some of the legacy of the business is a little bit more economically sensitive. It has matured a touch. And at some point, it will enter a stabilization phase and then you have all of these other categories that are in nascent stages that should lead to an acceleration in the business at some point? Is that the right way to think about it?

Yes, that's definitely the right way, and we're continuing with a couple of different factors in. So remember, I came back into it 14 months ago. Last year, on $507 million of revenue our EBITDA line was negative $57 million. And so job one was, we can't do that. That's the year before, my last year running it, we were at $378 million and a negative $8 million. So in a year, you tack on another $50 million of loss on the bottom line. That's just unit economics are all over the place. We're not clear on what our strategy is. We're building products left, right and center. What we first needed to do was shore it up and make sure that as we grow, we're growing profitably, and we're growing together as a company with a shared outlook. So we've been on that journey for the last year, and you see it in our gross margin. You see it in our bottom line, a massive year-over-year improvement with another easily a year or 2 of results that will keep going up across all those key unit economic indicators. That was job one. And I don't want to call it a win yet, but huge progress. The second part of that is when you pull everything back together, you pull the brakes on a lot of stuff. You say stop on the product development here and here and here. And let's get a strategy together and let's start to work together. So then we started to develop products for the future. I'll use treats because, again, we have great data and great permission from the customer to play there. We said we need to treat product that we can now take into retail. We need a point of view there. We need something that I'll sell. We spent a good 6 to 9 months developing that. it's awesome. I can't wait for even to see it. And we're right there selling that to our retail partners today, and that will show up. If we're successful with that, that shows up in Q4 about a year from now. But that means we go through a little bit of a dry spell here for the next couple of quarters because that's the cycle we're on. So the way you're describing it is like you're kind of stabilizing right now. The unit economics are better. The profitability profile is better. You'll see us running in that area where our profitability profile is much, much better. But our growth is sort of flattish. And then as we start to emerge in the back half of our fiscal year and going into next year, that's where you start to see the surge as new products from our product development efforts start to come out.

In addition to building this broader suite of products, you also have the opportunity to expand your frame of distribution. You've got, like I mentioned earlier, you're in 40,000 retail stores. What are you seeing on the expansion horizon? How is that going, building new relationships with retailers? And what -- is there a goal? What's the right level of distribution.

It's getting to the point where in the U.S., it's hard to build new relationships 40,000 doors is a lot. We do take a bit of an unconventional approach there. So the conventional approach is the retail partners like Walmart, Target, Costco, Petco, PetSmart, we're all partners. So we've checked that box, and those are great partners for us. The unconventional is we have retail partners like Dunkin', and we sell toys through Dunkin'. We sell toys through Subaru and their dealerships. So you wouldn't always think of 650 Subaru dealerships as retail doors, but they are. So there's still through those unconventional ways, more expansion for us, but what they all see from us is, first, that we're great at toys. And when we're in the department, the whole pet department lifts up and sells better. Second part is and why the whole department does better is because we bring fun to it. We bring an attitude and a reference to that aisle. And so they said, "You're big and treats what can you do there? So our opportunity is more horizontal across those 40,000.

Still the entire suite of products. And can you give us a sense for how penetrated that is? You've led with toys, what's the conversation like been about selling into these other product categories as well.

It's been a pull more than a push. They've asked us for it. They've certainly asked us for treats. I'd say the next category that we're really excited about bringing into retail is toppers and then dental after that. And probably, like I said a year from now, then we start to talk about food.

You touched on -- I want to pivot the conversation a little bit, moving down the P&L to the profitability of the business. You touched on how this has become increasing focus. Last quarter was the first quarter of generating positive free cash flow as a publicly traded company. Congratulations. What is the outlook from here? How do you see this playing out?

I view that as the first of many quarters. So the expectation from here is that wasn't a blip. That is the way forward. We fully expect to be -- to generate free cash flow, be cash flow positive for all of next year. Our fiscal year starts April 1. And so that's what we expect for next year. And on and on from there. We've reset the foundation. And again, if I go back, when we went public -- I'm sorry, I don't have the exact number, but we went public with around $355 million of cash in the bank. By the time we get to the end of our fiscal '22, we had $199 million of cash. That's a lot of cash burn. And since then, we've gone from 199 to 164. So really, really slowed it down. And as you said last quarter, it started to tick up. That's where it's going to go from there which we're thrilled by.

Yes. And it's a key element of the cash production will be on the margin side. What are going to be the puts and takes on the profitability? You've renegotiated some contracts recently. How will that contribute to the outlook for margins from here?

That's right. It's all the way through the P&L, but you mentioned renegotiating contracts with some of our vendors. That's been done for a while, and now we're just waiting for that inventory to cycle in and it should fairly soon here. That's only on our toy side. We're in the middle of -- or I'd say, near the end of a negotiation like that on our consumables side. So our treats our toppers, our food. And that will give us another boost in terms of some margin points. Same thing with our inbound freight. Those -- as you've seen in the spot rates has come way, way down, and we've renegotiated that. Outbound freight. We're setting up our fulfillment network to be more efficient and to accommodate all of our products and all of our warehouses. So instead of if you order from us -- I'm sorry, [indiscernible] orders plus his BarkBox, his dental product and some food, today that's coming from 3 different warehouses in 3 different packages. That's wildly inefficient when we can put them all together. So we can pick up points there. Sadly, [ our team ], and we're not alone in this, but sadly, our team was overbuilt as we were running up, and we did a cost reduction layoff about a month ago, and we see that saving us about $12 million annually. So all the way through that -- oh, and last but not least, now that the cash has stabilized and growing, and the interest rate environment is what it is, we're generating probably about $5 million of cash just in interest in the year ahead.

And are there offsets? It's a very inflationary environment, wages are growing. What are you seeing from a customer acquisition perspective, how -- well I’ll stop throw on 4 questions [indiscernible]. Okay.

Yes. Customer acquisition, we see as an opportunity. It's been for probably 5 or 6 years, our customer acquisition costs have been steady at about $50. Holiday quarter is going to be more because we get more aggressive in the market, gets more aggressive, but about 50 box for years, and we carried that through that attitude and that approach through last quarter and, frankly, a little bit into this one. But as we got our results that we published in February when we were looking at it, the thing that's jumped out at this is the average spend of the customer, the average order value continues to climb. It's right now year-over-year about $2 more per unit going out, and it's been climbing for a couple of years, just walking its way up. So the customer is spending more with us. Our margin profile is improving because of all these renegotiations we're doing and bringing our scale to bear with our partners. And yet, we've kept our customer acquisition cost steady. In hindsight, that's a mistake. We can spend more to acquire a customer, not foolishly. But the customer is just worth a lot more. So we -- not because of any market forces, but because we see an opportunity there, we intend to spend more and be more aggressive…

Yes. And it's probably a good opportunity to introduce LTV to CAC, which is quite healthy for BarkBox.

Yes. It's been running around 5:1. And we're happy with that. But again, it's probably a little too healthy -- and so there's -- with LTV to CAC, there's always that balance -- is it too good and could you grow faster if you move that CAC up and we feel it is. So if we were landing in that 4 to 4.5x, that'd probably be a great spot for us and accelerate the growth opportunity and bring more people into the BARK ecosystem.

That is something that no one has ever said about Michael Lasser being too good. So that is good to hear about having such a strong LTV to CAC...

I'm sure [ Brady ] feels that.

[indiscernible] that is why I said people, people. So we've been in this heightened inflationary environment, what has been BarkBox approach to how it's been pricing its product? Has there been elasticity aside from what you mentioned previously where folks have been seeking out value and quality to make sure that they get the quality for their products?

Yes. We've been -- we've raised our prices in the past year, but done so through a charge for shipping. And the little bonus that we give to the customer is we can charge you for shipping if what you want is a BarkBox and nothing else. But if you're open to trying a dental product or a topper or a food product, we'll give you free shipping across everything. So obviously, when you introduce a monthly shipping fee, that's going to depress your conversion rate. And it's a moment in time. We do all the testing and the math works out, but the world changed. The world changes all the time. So we have to revisit that testing and our pricing and revisit our margin profile and weigh all those together and then say how much of that marketing opportunity we want to put into media spending? And how much of that do we want to give back to the customer in a different way and pull those different levers. So we'll be going through all of that pretty much every month for the next year.

And you will be entering a new fiscal year in a matter of weeks. The team has gotten busy as a result. I think the takeaway for folks who are listening are as you enter a new year, the priorities will be to continue the product development, cross-sell to both your existing subscription members as well as through the retail network, continue to focus on profitability and moderate cash burn. Are there other priorities as you look at and have the right marketing mix? Are there other priorities that as you look out that are top of mind for you? If the economy gets into a tougher spot, how would you react?

Okay. The first is we've got to finish the job on profitability. We have to be bottom line profitable and then we have to increase that profitability over time. And we need to generate cash from this point forward, and we fully expect to. So now you've got that foundation of you've got a very healthy model. You're generating cash. You have $164 million of cash and growing in the bank. And in our category and in a world that maybe is going to have some stronger headwinds that presents opportunity because we've got millions of customers on a profile. We've got a strong brand. We've got big distribution, and we have a lot of cash. That's attractive to someone who's got great products but maybe hasn't reached scale to be profitable or sustainable or can't raise that next round. So there is M&A potential for us in the right scenario. At this stock price, we will not use our equity to do that. But we have a lot of attractive assets for that. But first, got to be profitable. Second, we need to leverage the products that we've built and get more productivity or leverage out of them. Simple as can be that means treats go from direct-to-consumer into the retail stores, and we grow from there or into partners, and we grow from there. Same with dental, same with food, same with toppers. But the -- and then it's building for the future. It's just -- I want to finish the job on getting the foundation really solid and then growing off of that foundation.

And your point is, look, if the economy enters a tougher spot, there will be more dislocation, more disruption, could be an opportunity for consolidation. From an operational perspective, is there anything else that you would do to be now matches or change the approach?

I hope not. There's a lot in our model where we have, again, these very good relationships with our vendors. And we're a meaningful part of their business -- and so we enjoy great margins as a result of that. A lot of our model is variable, and now the unit economics are in place. So you never want to go through a layoff as we did, but we think we did so responsibly. And if the headwinds pick up, we -- again, most of it is variable. So I think we're in a really good spot for that to weather it and then be a lifeboat to some really good companies that we can -- we've got the platform. If we bring something on, we can add it to the platform and grow through those means as well.

I want to conclude our discussion talking about the stock a little because it has been quite an interesting journey. You made the very interesting and vivid point that you have a business the size of just solely in treated that is the size of another company that was taken out for $1.2 billion. And so it would suggest that there is some misunderstanding in the marketplace. Why do you think that there is this misunderstanding what does the market have wrong about the BarkBox story?

It's a great question. I think first off, the stock price is rapidly low or the value of the company is just crazy low. We are almost trading at cash, which suggests that the market is telling us you will run out of cash before you get there before you get to profitability. Given everything we've just talked about, that's not happening. We generated cash last quarter, we will again next year. So that is off the table. So that misunderstanding, let's just clear that up. We're in a good spot there, and we have -- we made it with $164 million in the bank. The second part is you bring up the part about treats and that business that was sold to [ Blue Buffalo ] and the value of that, that's our fault. We haven't told people that story. We haven't said, did you know that we have one of the top 5 treat businesses in the U.S. And it was bought for something like it was bought for 6x revenue just a year ago. Did you know that our progress in food is this, that our progress in dental is that. And those businesses trade -- like a food business trades for, say, Freshpet 8 or 9x revenue, we haven't told that story. So that's on us, and we need to tell a better story. But underneath it all, you have business doing $535 million of revenue this year with now gross margins at 60% or better, a history of really efficient marketing, generating free cash flow. And if you're going to value that at $200 million, I'm a huge buyer. I continue to call out to the world for loans, so I can buy more and more and more of this company. I'd buy every bit of it, if I could.

Well, you did a great job of telling the story today. So please join me in thanking Matt for your -- and the team for the time today. Thank you.

Thank you, Michael.

Thank you Yes.