Aterian | 10-Q: FY2025 Q3 Revenue Misses Estimate at USD 19.02 M

Revenue: As of FY2025 Q3, the actual value is USD 19.02 M, missing the estimate of USD 19.88 M.

EPS: As of FY2025 Q3, the actual value is USD -0.28, beating the estimate of USD -0.63.

EBIT: As of FY2025 Q3, the actual value is USD -1.784 M.

Net Revenue: $19.0 million for the three months ended September 30, 2025, compared to $26.2 million for the same period in 2024, a decrease of 27.5%.
Net Revenue: $53.8 million for the nine months ended September 30, 2025, compared to $74.4 million for the same period in 2024, a decrease of 27.7%.

Gross Profit: $10.7 million for the three months ended September 30, 2025, compared to $15.8 million for the same period in 2024, a decrease of 32.6%.
Gross Profit: $30.7 million for the nine months ended September 30, 2025, compared to $45.9 million for the same period in 2024, a decrease of 33.2%.
Operating Loss: $2.0 million for the three months ended September 30, 2025, compared to $1.7 million for the same period in 2024, an increase of 18.1%.
Operating Loss: $10.2 million for the nine months ended September 30, 2025, compared to $10.2 million for the same period in 2024, an increase of 0.3%.
Net Loss: $2.3 million for the three months ended September 30, 2025, compared to $1.8 million for the same period in 2024, an increase of 28.7%.
Net Loss: $11.0 million for the nine months ended September 30, 2025, compared to $10.6 million for the same period in 2024, an increase of 4.5%.

Net Cash Used in Operating Activities: - $9.9 million for the nine months ended September 30, 2025, compared to $2.2 million provided by operating activities for the same period in 2024.
Net Cash Used in Investing Activities: - $46 thousand for the nine months ended September 30, 2025, compared to - $242 thousand for the same period in 2024.
Net Cash Used in Financing Activities: - $867 thousand for the nine months ended September 30, 2025, compared to - $5.7 million for the same period in 2024.

Product Remediation Costs: $0.4 million accrued during the three months ended September 30, 2025, for addressing a product performance matter involving certain houseware appliances.
Stock-Based Compensation Expense: $731 thousand for the three months ended September 30, 2025, compared to $1.8 million for the same period in 2024, a decrease of 59.5%.
Stock-Based Compensation Expense: $1.6 million for the nine months ended September 30, 2025, compared to $6.4 million for the same period in 2024, a decrease of 74.4%.

Mitigation Strategies: Actively pursuing supplier negotiations, selective price adjustments, potential geographic diversification of sourcing, and fixed cost reductions to address the impact of tariffs.
Cost Reduction Plan: Announced a fixed cost reduction plan on May 14, 2025, including a workforce reduction affecting approximately 20 employees, expected to generate annualized savings of approximately $5 to $6 million.

Exploratory Efforts: Exploring alternative sourcing outside of China, working with suppliers to manage cost increases, and implementing price increases to mitigate the impact of tariffs.

Financial Covenants Compliance: Expect to remain in compliance with financial covenants through at least December 31, 2026, but significant uncertainty remains regarding the effectiveness of mitigation efforts.
Outside Capital: Continuing to explore raising additional outside capital, specifically if pursuing material M&A opportunities, but no firm commitments as of the issuance date.