News Release

Allbirds Reports First Quarter 2024 Financial Results

 PDF Version

Achieves Q1 2024 Financial Guidance

Continues to Advance its Strategic Transformation Plan

Reiterates Full Year 2024 Outlook; Provides Q2 2024 Guidance

SAN FRANCISCO, May 08, 2024 (GLOBE NEWSWIRE) -- Allbirds, Inc. (NASDAQ: BIRD), a global lifestyle brand that innovates
with naturally derived materials to make better footwear and apparel products in a better way, today reported financial
results for the first quarter ended March 31, 2024.

First Quarter 2024 Overview

First quarter net revenue decreased 27.6% to $39.3 million versus a year ago, within the Company’s guidance range.
First quarter gross margin improved 680 basis points to 46.9% versus a year ago.
First quarter net loss of $27.3 million, or $0.18 per basic and diluted share.
First quarter adjusted EBITDA1 loss of of $20.9 million, above the Company’s guidance range.
Inventory at quarter end of $60.6 million, representing a decrease of 45% versus a year ago.
As of March 31, 2024, the Company had $102.1 million of cash and cash equivalents and no outstanding borrowings under
its $50.0 million revolving credit facility.
Entered into distributor agreements for two new regions, the Gulf Countries and Southeast Asia.

“We are pleased to begin the year with solid progress under our strategic transformation plan,” said Joe Vernachio, Chief
Executive Officer. “The operational and financial rigor we’ve developed, and strong execution by our teams, enabled us to
meet or exceed expectations on our key metrics.”

Vernachio added, “We are focusing on bringing a fresh, updated product offering to consumers, supported by effective
storytelling. Our recent launches, including the Wool Runner 2 and Tree Runner Go, have met with strong consumer response,
reaffirming our conviction that Allbirds is a beloved brand. Looking further ahead, as we continue to drive improvement in our
cost structure and underlying operating model, we believe the business is on the right path to achieve long-term profitable
growth and deliver shareholder value.”

First Quarter Operating Results

In the first quarter of 2024, net revenue decreased 27.6% to $39.3 million compared to $54.4 million in the first quarter of 2023.
The year-over-year decrease is primarily attributable to lower overall demand, as well as the impact of international
distributor transitions and retail store closures.

Gross profit totaled $18.5 million compared to $21.8 million in the first quarter of 2023, and gross margin improved 680 basis
points to 46.9% compared to 40.1% in the first quarter of 2023. The decline in gross profit is primarily due to a decrease in units
sold, and the improvement in gross margin is primarily due to lower freight and product costs per unit, and a decrease in
inventory write-downs resulting from a healthier inventory composition versus a year ago.

Selling, general, and administrative expense (SG&A) was $39.7 million, or 101.0% of net revenue, compared to $42.8 million, or
78.7% of net revenue in the first quarter of 2023. The decrease is primarily attributable to decreases in stock-based
compensation, personnel expenses, and occupancy costs.

Marketing expense totaled $7.8 million, or 19.7% of net revenue, compared to $11.5 million, or 21.1% of net revenue, in the first
quarter of 2023, driven by decreased digital advertising spend.

Restructuring expense totaled $0.8 million, or 2.0% of net revenue compared to $3.3 million, or 6.0% of net revenue, in the first
quarter of 2023, primarily as a result of reduced expenses associated with execution of the strategic transformation plan
announced in March 2023.

In the first quarter of 2024, net loss was $27.3 million compared to $35.2 million in the first quarter of 2023, and net loss margin
was 69.5% compared to 64.7% in the first quarter of 2023.

In the first quarter of 2024, adjusted EBITDA1 was a loss of $20.9 million, a 3.6% improvement compared to a loss of $21.7
million in the first quarter of 2023, and adjusted EBITDA margin1 declined to (53.1)% compared to (39.8)% in the first quarter of
2023.

________________________

1
For a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure, please
refer to the reconciliation tables in the section titled “Non-GAAP Financial Measures” below.

Strategic Transformation

In Q1 2024, Allbirds delivered a fifth consecutive quarter of operational and financial progress under its strategic
transformation plan:

Reignite product and brand: Executing an icon-focused brand strategy to drive resonance with the consumer through
fresh, innovative products, as well as more impactful storytelling and marketing.
Optimize U.S. distribution and retail store profitability: Closing certain underperforming Allbirds stores, driving traffic and
conversion within our U.S. store portfolio and creating a balanced U.S. marketplace. In Q1, the Company closed three U.S.
retail stores and remains on track with its previously communicated plan to close 10-15 U.S. locations in 2024.
Evaluate transition of international go-to-market strategy: Transitioning to a distributor model in certain international
markets to grow those regions in a cost- and capital-efficient manner. The Company has completed the transition to a
distributor model in Canada and South Korea, and remains on track to complete its previously announced transition to a
distributor model in Australasia and Japan mid-year. During Q1, Allbirds signed definitive agreements with distributors in
two new regions, the Gulf Countries and Southeast Asia.
Improve cost savings and capital efficiency: Tracking to achieve the cost of goods savings and SG&A savings previously
outlined for 2025 and optimizing cash.

Balance Sheet Highlights

Allbirds ended the quarter with $102.1 million of cash and cash equivalents and no outstanding borrowings under its $50
million revolving credit facility. Inventories totaled $60.6 million, a decrease of 45% versus a year ago, reflecting fewer units of
on hand inventory and a healthier overall composition.

2024 Financial Outlook

The Company is reiterating its full year 2024 guidance as follows:

 Net revenue of $190 million to $210 million
U.S. net revenue of $150 million to $165 million, including a $7 million to $9 million impact resulting from anticipated store
closures
International net revenue of $40 million to $45 million, including $25 million to $28 million of impact resulting from
anticipated transitions to a distributor model in certain international markets
Gross margin of 42% to 45%
Adjusted EBITDA2 loss of $78 million to $63 million.

Allbirds is providing the following guidance for the second quarter of 2024:

Net revenue of $48 million to $53 million

U.S. net revenue of $35 million to $37 million
International net revenue of $13 million to $16 million
Adjusted EBITDA2 loss of $20 million to $17 million.

________________________

2 A reconciliation of these non-GAAP financial measures to corresponding GAAP financial measures is not available on a
forward-looking basis without unreasonable effort as we are currently unable to predict with a reasonable degree of
certainty certain expense items that are excluded in calculating adjusted EBITDA, although it is important to note that these
factors could be material to our results computed in accordance with GAAP. We have provided a reconciliation of GAAP to
non-GAAP financial measures in the section titled “Reconciliation of GAAP to Non-GAAP Financial Measures” for our first
quarter 2024 and 2023 results included in this press release.

Conference Call Information

Allbirds will host a conference call to discuss the results, followed by Q&A, at 5:00 p.m. Eastern Time today, May 8, 2024. A live
webcast and replay of the conference call will be available on the investor relations section of the Allbirds website at
https://www.ir.allbirds.com. Information on the Company’s website is not, and will not be deemed to be, a part of this press
release or incorporated into any other filings the Company may make with the Securities and Exchange Commission. A replay
of the webcast will also be archived on the Allbirds website for 12 months.

About Allbirds, Inc.

Based in San Francisco, with its roots in New Zealand, Allbirds launched in 2016 with a single shoe: the now iconic Wool
Runner. In the years since, Allbirds has sold millions of pairs of shoes, and has maintained its commitment to incredible
comfort, versatile style and unmatched quality. This is made possible with materials like Allbirds’s sugarcane-based midsole
technology, SweetFoam™, and textiles made with eucalyptus fibers and Merino wool – so consumers don't have to
compromise between the best products and their impact on the earth. www.allbirds.com.

Forward-Looking Statements

This press release and related conference call contain “forward-looking” statements, as the term is defined under federal
securities laws, that are based on management’s beliefs and assumptions and on information currently available to
management. All statements other than statements of historical facts, including statements regarding our strategic
transformation plan and related efforts, future financial performance, including our financial outlook on financial results and
guidance targets, planned transition to a distributor model in certain international markets, anticipated distributor model
arrangements, focus on improving efficiencies and driving profitability, restructuring charges, estimated and/or targeted cost
savings, medium-term financial targets, market position, future results of operations, financial condition, business strategy and
plans, reducing the carbon footprint of our products, materials innovation and new product launches, and objectives of
management for future operations are forward-looking statements. In some cases, you can identify forward-looking
statements because they contain words such as “designed,” “objective,” “anticipate,” “believe,” “contemplate,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the
negative of these words or other similar terms or expressions. Forward-looking statements are subject to numerous
assumptions, risks and uncertainties which could cause actual results or facts to differ materially from those statements
expressed or implied in the forward-looking statements, including, but not limited to: unfavorable economic conditions; our
ability to execute our strategic transformation plans, simplification initiatives or our long-term growth strategy; fluctuations in
our operating results; our ability to achieve the financial outlook and guidance targets for the second quarter of 2024; our
ability to complete transitions to a distributor model in certain international markets; our ability to achieve our cost savings
targets by 2025; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency
exchange rates, or the availability of capital; impairment of long-lived assets; the strength of our brand; our net losses since
inception; the competitive marketplace; our reliance on technical and materials innovation; our use of sustainable high-
quality materials and environmentally friendly manufacturing processes and supply chain practices; our ability to attract new
customers and increase sales to existing customers; the impact of climate change and government and investor focus on
sustainability issues; our ability to anticipate product trends and consumer preferences, including with respect to the product
launches we have planned for the first half of 2024; breaches of security or privacy of business information; and our ability to
forecast consumer demand. Moreover, we operate in a very competitive and rapidly changing environment in which new
risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all
factors on our business or the extent to which any factor, or combination of factors, may cause our actual results or
performance to differ materially from those contained in any forward-looking statements we may make.

A further discussion of these and other factors that could cause our financial results, performance, and achievements to differ
materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking
statements is included in the filings we make with the SEC, including our Annual Report on Form 10-K for the year ended
December 31, 2023, and future reports we may file with the SEC from time to time. The forward-looking statements contained
in this press release and related conference call relate only to events as of the date stated or, if no date is stated, as of the
date of this press release and related conference call. We undertake no obligation to update any forward-looking statements
made in this press release to reflect events or circumstances after the date of this press release or to reflect new information
or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or
expectations disclosed in or expressed by, and you should not place undue reliance on our forward-looking statements. Our
forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures
or investments.

Use of Non-GAAP Financial Measures

This press release and accompanying financial tables include references to adjusted EBITDA and adjusted EBITDA margin,
which are non-GAAP financial measures. We believe that providing these non-GAAP financial measures, when reviewed in
conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under
GAAP, are useful to investors as they are widely used measures of performance, and the adjustments we make to these non-
GAAP financial measures may provide investors further insight into our profitability and additional perspectives in comparing
our performance to other companies and in comparing our performance over time on a consistent basis. These non-GAAP
financial measures should not be considered as alternatives to net loss or net loss margin as calculated and presented in
accordance with GAAP.

Adjusted EBITDA is defined as net loss before stock-based compensation expense, depreciation and amortization expense,
impairment expense, restructuring expense (consisting of professional fees, personnel and related expenses, and other
related charges resulting from our strategic initiatives), non-cash gains or losses on the sales of businesses relating to our
March 2023 initiatives, other income or expense (consisting of non-cash gains or losses on foreign currency, non-cash gains
or losses on sales of property and equipment, and non-cash gains or losses on modifications or terminations of leases),
interest income or expense, and income tax provision or benefit.

Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue.

Other companies, including companies in our industry, may calculate these adjusted financial measures differently, which
reduces their usefulness as comparative measures. Because of these limitations, we consider, and investors should consider,
these adjusted financial measures together with other operating and financial performance measures presented in
accordance with GAAP.

Investor Relations:

ir@allbirds.com

Media Contact:
press@allbirds.com

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share, per share amounts, and percentages)
(unaudited)

Three Months Ended March 31,

2024 2023
Net revenue $ 39,327 $ 54,352
Cost of revenue 20,871 32,535
Gross profit 18,456 21,817
Operating expense:
Selling, general, and administrative expense 39,706 42,764
Marketing expense 7,760 11,493
Restructuring expense 800 3,239
Total operating expense 48,266 57,496
Loss from operations (29,810) (35,679)
Interest income 1,020 808
Other income (expense) 1,698 (74)
Loss before provision for income taxes (27,092) (34,945)
Income tax provision (239) (221)
Net loss $ (27,331) $ (35,166)

Net loss per share data:

Net loss per share attributable to common stockholders, basic and diluted $ (0.18) $ (0.23)
Weighted-average shares used in computing net loss per share attributable
155,380,544 150,082,295
to common stockholders, basic and diluted

Other comprehensive (loss) income:

Foreign currency translation (loss) income (1,213) 230
Total comprehensive loss $ (28,544) $ (34,936)

Three Months Ended March 31,

2024 2023
Statements of Operations Data, as a Percentage of Net Revenue:
Net revenue 100.0% 100.0%
Cost of revenue 53.1% 59.9%
Gross profit 46.9% 40.1%
Operating expense:
Selling, general, and administrative expense 101.0% 78.7%
Marketing expense 19.7% 21.1%
Restructuring expense 2.0% 6.0%
Total operating expense 122.7% 105.8%
Loss from operations (75.8)% (65.6)%
Interest income 2.6% 1.5%
Other income (expense) 4.3% (0.1)%
Loss before provision for income taxes (68.9)% (64.3)%
Income tax provision (0.6)% (0.4)%
Net loss (69.5)% (64.7)%
Other comprehensive loss:
Foreign currency translation (loss) income (3.1)% 0.4%
Total comprehensive loss (72.6)% (64.3)%

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)
(unaudited)

March 31, December 31,

2024 2023
Assets
Current assets:
Cash and cash equivalents $ 102,084 $ 130,032
Accounts receivable 5,703 8,188
Inventory 60,624 57,763
Prepaid expenses and other current assets 16,813 16,423
Total current assets 185,224 212,406

Property and equipment—net 22,397 26,085

Operating lease right-of-use assets 58,283 67,085
Other assets 6,459 7,129
Total assets $ 272,363 $ 312,705

Liabilities and stockholders' equity

Current liabilities:
Accounts payable 13,144 5,851
Accrued expenses and other current liabilities 15,302 22,987
Current lease liabilities 14,003 15,218
Deferred revenue 4,261 4,551
Total current liabilities 46,710 48,607

Noncurrent liabilities:
Noncurrent lease liabilities 65,348 78,731
Other long-term liabilities 38 38
Total noncurrent liabilities 65,386 78,769
Total liabilities $ 112,096 $ 127,376

Commitments and contingencies (Note 11)

Stockholders' equity:
Class A Common Stock, $0.0001 par value; 2,000,000,000 shares authorized
as of March 31, 2024 and December 31, 2023; 103,223,614 and 102,579,222
10 10
shares issued and outstanding as of March 31, 2024 and December 31, 2023,
respectively
 Class B Common Stock, $0.0001 par value; 200,000,000 shares authorized
as of March 31, 2024 and December 31, 2023; 52,547,761 and 52,547,761
5 5
shares issued and outstanding as of March 31, 2024 and December 31, 2023,
respectively
Additional paid-in capital 583,330 579,848
Accumulated other comprehensive loss (4,548) (3,335)
Accumulated deficit (418,530) (391,199)
Total stockholders' equity 160,267 185,329

Total liabilities and stockholders' equity $ 272,363 $ 312,705

Condensed Consolidated Statements of Cash Flows

(in thousands)
(unaudited)

Three Months Ended March 31,

2024 2023
Cash flows from operating activities:
Net loss $ (27,331) $ (35,166)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 4,846 5,077
Amortization of debt issuance costs 8 12
Stock-based compensation 3,344 5,670
Inventory write-down 893 2,357
Provision for bad debt 802 —
Impairment of note receivable 404 —
Changes in assets and liabilities:
Accounts receivable 1,630 3,297
Inventory (3,991) 5,089
Prepaid expenses and other current assets (419) 430
Operating lease right-of-use assets and current and noncurrent lease
(5,755) 738
liabilities
Accounts payable and accrued expenses (333) (8,028)
Deferred revenue (299) (389)
Net cash used in operating activities (26,201) (20,913)

Cash flows from investing activities:

Purchase of property and equipment (1,122) (3,035)
Changes in security deposits 52 (50)
Proceeds from sales of businesses 304 —
Net cash used in investing activities (766) (3,085)

Cash flows from financing activities:

Proceeds from the exercise of stock options 34 123
Taxes withheld and paid on employee stock awards (1) (61)
Net cash provided by financing activities 33 62

Effect of foreign exchange rate changes on cash, cash equivalents, and

(814) 110
restricted cash
Net decrease in cash, cash equivalents, and restricted cash (27,748) (23,826)
Cash, cash equivalents, and restricted cash—beginning of period 130,673 167,767
Cash, cash equivalents, and restricted cash—end of period $ 102,925 $ 143,941

Supplemental disclosures of cash flow information:

Cash paid for interest $ 48 $ 20
Cash paid for taxes $ 655 $ 273
Noncash investing and financing activities:
Purchase of property and equipment included in accounts payable $ 53 $ 542
Stock-based compensation included in capitalized internal-use software $ 87 $ 242
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents $ 102,084 $ 143,307
Restricted cash included in prepaid expenses and other current assets 841 634
Total cash, cash equivalents, and restricted cash $ 102,925 $ 143,941

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except share, per share amounts, and percentages)
(unaudited)

The following tables present a reconciliation of adjusted EBITDA to its most comparable GAAP measure, net loss, and
presentation of net loss margin and adjusted EBITDA margin for the periods indicated: :

Three Months Ended March 31,

2024 2023
Net loss $ (27,331 ) $ (35,166 )
Add (deduct):
Stock-based compensation expense 3,344 5,670
Depreciation and amortization expense 4,771 5,111
Restructuring expense 800 3,239
Other (income) expense (1,698 ) 74
Interest (income) expense (1,020 ) (808 )
Income tax provision 239 221
Adjusted EBITDA $ (20,895 ) $ (21,659 )

Three Months Ended March 31,

2024 2023
Net revenue $ 39,327 $ 54,352

Net loss $ (27,331 ) $ (35,166 )

Net loss margin (69.5 )% (64.7 )%

Adjusted EBITDA $ (20,895 ) $ (21,659 )

Adjusted EBITDA margin (53.1 )% (39.8 )%
 Net Revenue and Store Count by Primary Geographical Market
(in thousands, except for store count)
(unaudited)

Net Revenue by Primary Geographical

Market
Three Months Ended March 31,
2024 2023
United States $ 29,232 $ 40,836
International 10,095 13,516
Total net revenue $ 39,327 $ 54,352

Store Count by Primary Geographical Market

March September December March September December March
June 30, June 30,
31, 30, 31, 31, 30, 31, 31,
2022 2023
2022 2022 2022 2023 2023 2023 2024
United States 27 32 38 42 42 44 45 45 42
International [1] 12 14 13 16 17 18 15 15 15
Total stores 39 46 51 58 59 62 60 60 57

[1] In the third quarter of 2023, we transitioned the operations of two stores in Canada and one store in South Korea to
unrelated third-party distributors, resulting in a reduction of three international stores. In the first quarter of 2024, we closed
the operations of three stores in the US.