Allbirds Reports 30.5% Revenue Decline and Strategic Shift to Electronics Infrastructure

Allbirds, Inc. reported a significant decline in financial performance for the first quarter of 2026, with net revenue falling to $22.3 million, a decrease of 30.5% from $32.1 million in the same period of 2025. The company's gross profit also dropped sharply to $6.2 million, resulting in a gross margin of 27.8%, down from 44.8% a year earlier. The net loss for the quarter was $20.7 million, slightly improved from a net loss of $21.9 million in the prior year. The adjusted EBITDA loss was reported at $17.2 million, compared to $18.6 million in the previous year.

The decline in revenue was primarily attributed to a decrease in the U.S. direct business, which saw a reduction of $7.6 million due to lower unit sales and retail store closures. International revenue also fell by $2.3 million, largely due to lower distributor sales. In response to these challenges, Allbirds closed its remaining full-price retail stores in the U.S. during the quarter, leaving only two outlet stores in the country and two full-price stores in London.

Strategically, Allbirds is undergoing a significant transformation. On March 29, 2026, the company entered into an Asset Purchase Agreement with Allbirds IP LLC, an affiliate of American Exchange Group, to sell its footwear business assets for $39 million. This sale is expected to close in the second quarter of 2026. Following the sale, Allbirds plans to pivot towards the Electronics Infrastructure Business, focusing on acquiring and monetizing graphics processing units and related high-performance computing infrastructure. The company is also exploring a name change to reflect this new direction.

Operationally, Allbirds reported a decrease in cash and cash equivalents, which fell to $14.4 million as of March 31, 2026, down from $26.7 million at the end of 2025. The company has also incurred significant restructuring expenses of $1.3 million related to the closure of its retail stores. As of the end of the first quarter, Allbirds had a total employee headcount that reflects the recent reductions in force, although specific numbers were not disclosed.

Looking ahead, Allbirds faces substantial uncertainty regarding its future operations and financial stability. The company anticipates continued net losses and negative cash flows following the Asset Sale, raising concerns about its ability to meet liquidity needs without additional capital. The success of the new Electronics Infrastructure Business remains uncertain, and Allbirds has acknowledged the risks associated with this strategic shift. The company plans to distribute a portion of the proceeds from the Asset Sale to stockholders as a special dividend, although the timing and amount of this distribution will be determined by the Board of Directors.