STOCK TITAN

Aterian Reports 2025 First Quarter Financial Results

Rhea-AI Impact
(High)
Rhea-AI Sentiment
(Neutral)
Tags
Aterian (NASDAQ: ATER) reported its Q1 2025 financial results, showing a net revenue decline to $15.4M from $20.2M in Q1 2024. The company's gross margin decreased to 61.4% from 65.1%, while net loss improved to $(3.9M) from $(5.2M). Aterian announced a cost optimization plan targeting $5-6M in annual savings, with $5M expected by end of 2025. The company is actively working to mitigate tariff impacts through several initiatives, including reducing China-manufactured goods to 30% by end-2025, implementing strategic price increases, and expanding into US-sourced consumables. Due to economic uncertainty, Aterian has withdrawn its 2025 guidance. The total cash balance declined to $14.3M from $18.0M at December 31, 2024.
Aterian (NASDAQ: ATER) ha comunicato i risultati finanziari del primo trimestre 2025, evidenziando un calo dei ricavi netti a 15,4 milioni di dollari rispetto ai 20,2 milioni del primo trimestre 2024. Il margine lordo è sceso al 61,4% dal 65,1%, mentre la perdita netta si è ridotta a $(3,9M) da $(5,2M). Aterian ha annunciato un piano di ottimizzazione dei costi volto a raggiungere risparmi annuali tra 5 e 6 milioni di dollari, con 5 milioni attesi entro la fine del 2025. L'azienda sta lavorando attivamente per mitigare l'impatto dei dazi attraverso diverse iniziative, tra cui la riduzione dei prodotti fabbricati in Cina al 30% entro fine 2025, l'implementazione di aumenti strategici dei prezzi e l'espansione nel settore dei consumabili di origine statunitense. A causa dell'incertezza economica, Aterian ha ritirato le previsioni per il 2025. La liquidità totale è diminuita a 14,3 milioni di dollari dai 18,0 milioni al 31 dicembre 2024.
Aterian (NASDAQ: ATER) informó sus resultados financieros del primer trimestre de 2025, mostrando una disminución en los ingresos netos a 15,4 millones de dólares desde 20,2 millones en el primer trimestre de 2024. El margen bruto bajó al 61,4% desde el 65,1%, mientras que la pérdida neta mejoró a $(3,9M) desde $(5,2M). Aterian anunció un plan de optimización de costos que apunta a ahorros anuales de 5 a 6 millones de dólares, con 5 millones esperados para finales de 2025. La compañía está trabajando activamente para mitigar los impactos arancelarios mediante varias iniciativas, incluyendo reducir los productos fabricados en China al 30% para finales de 2025, implementar aumentos estratégicos de precios y expandirse en consumibles de origen estadounidense. Debido a la incertidumbre económica, Aterian ha retirado su guía para 2025. El saldo total de efectivo disminuyó a 14,3 millones de dólares desde 18,0 millones al 31 de diciembre de 2024.
Aterian(NASDAQ: ATER)는 2025년 1분기 재무 실적을 발표하며 2024년 1분기 2,020만 달러에서 1,540만 달러로 순매출이 감소했다고 밝혔습니다. 회사의 총 이익률은 65.1%에서 61.4%로 하락했으나, 순손실은 $(520만)에서 $(390만)으로 개선되었습니다. Aterian은 연간 500만~600만 달러의 비용 절감 목표를 포함한 비용 최적화 계획을 발표했으며, 2025년 말까지 500만 달러 절감을 기대하고 있습니다. 회사는 관세 영향을 완화하기 위해 중국 제조 제품 비중을 2025년 말까지 30%로 줄이고, 전략적 가격 인상과 미국산 소모품 확대 등 여러 이니셔티브를 적극 추진 중입니다. 경제 불확실성으로 인해 Aterian은 2025년 가이던스를 철회했습니다. 총 현금 잔액은 2024년 12월 31일 1,800만 달러에서 1,430만 달러로 감소했습니다.
Aterian (NASDAQ : ATER) a publié ses résultats financiers du premier trimestre 2025, affichant une baisse du chiffre d'affaires net à 15,4 millions de dollars contre 20,2 millions au premier trimestre 2024. La marge brute a diminué à 61,4 % contre 65,1 %, tandis que la perte nette s'est améliorée à (3,9 M$) contre (5,2 M$). Aterian a annoncé un plan d'optimisation des coûts visant à réaliser 5 à 6 millions de dollars d'économies annuelles, avec 5 millions attendus d'ici la fin 2025. La société travaille activement à atténuer les impacts des droits de douane via plusieurs initiatives, notamment en réduisant la part des produits fabriqués en Chine à 30 % d'ici fin 2025, en appliquant des augmentations de prix stratégiques et en s'étendant aux consommables d'origine américaine. En raison de l'incertitude économique, Aterian a retiré ses prévisions pour 2025. La trésorerie totale a diminué à 14,3 millions de dollars contre 18,0 millions au 31 décembre 2024.
Aterian (NASDAQ: ATER) veröffentlichte seine Finanzergebnisse für das erste Quartal 2025 und zeigte einen Rückgang des Nettoumsatzes auf 15,4 Mio. USD von 20,2 Mio. USD im ersten Quartal 2024. Die Bruttomarge sank von 65,1 % auf 61,4 %, während der Nettoverlust sich von $(5,2M) auf $(3,9M) verbesserte. Aterian kündigte einen Kostenoptimierungsplan mit dem Ziel von jährlichen Einsparungen von 5 bis 6 Mio. USD an, wobei bis Ende 2025 Einsparungen von 5 Mio. USD erwartet werden. Das Unternehmen arbeitet aktiv daran, die Auswirkungen von Zöllen durch verschiedene Maßnahmen zu mildern, darunter die Reduzierung von in China hergestellten Waren auf 30 % bis Ende 2025, die Umsetzung strategischer Preiserhöhungen und die Erweiterung des Angebots an in den USA bezogenen Verbrauchsmaterialien. Aufgrund wirtschaftlicher Unsicherheiten hat Aterian seine Prognose für 2025 zurückgezogen. Der gesamte Kassenbestand sank von 18,0 Mio. USD am 31. Dezember 2024 auf 14,3 Mio. USD.
Positive
  • Net loss improved to $(3.9M) from $(5.2M) year-over-year
  • Cost optimization plan expected to generate $5-6M in annual savings
  • Operating loss narrowed to $(3.7M) from $(5.3M)
  • Strategic initiatives to reduce China manufacturing to 30% by end of 2025
  • Planned launch of new tariff-exempt US-sourced consumable products
Negative
  • Net revenue declined 23.8% to $15.4M from $20.2M
  • Gross margin decreased to 61.4% from 65.1%
  • Contribution margin declined to 13.4% from 14.1%
  • Cash balance decreased to $14.3M from $18.0M
  • Withdrawal of previously issued 2025 revenue and EBITDA guidance
  • Expected to incur $2.3M in costs for optimization plan implementation

Insights

Aterian's Q1 results show deteriorating revenue amid tariff challenges, but cost-cutting plan may provide some financial breathing room.

Aterian's Q1 2025 results reveal concerning trends with revenue declining 24% year-over-year to $15.4 million from $20.2 million. This substantial drop stems from their SKU rationalization strategy and reduced traffic from Amazon's affiliate program changes. More worrying is the compression in gross margin to 61.4% from 65.1% and contribution margin decreasing to 13.4% from 14.1%.

While the company narrowed its operating loss to $3.7 million from $5.3 million, this improvement largely came from reduced non-cash expenses rather than operational improvements. The cash position deteriorated significantly, falling to $14.3 million from $18.0 million in just one quarter – representing a 20.6% quarterly cash burn rate that raises sustainability concerns.

The newly announced cost optimization plan targeting $5-6 million in annual savings is a critical defensive move, though it comes with $2.3 million in implementation costs. This represents a significant ~30% reduction in operational expenses if successful, providing approximately 3-4 quarters of additional runway at current burn rates.

Most significantly, management has withdrawn their 2025 guidance, signaling heightened uncertainty. Their accelerated plan to reduce Chinese manufacturing dependency from 40% to 30% by year-end indicates the substantial impact tariffs are having on their business model.

The pivot toward US-manufactured consumables (specifically the Squatty Potty flushable wipes) represents a strategic shift away from tariff-exposed products, but the delayed timeline for launch (late Q3 2025) means these initiatives won't meaningfully contribute to 2025 results. The company's pausing of new electronic product launches further constrains growth potential.

Updates Progress of Tariff Mitigation Strategy and Announces Cost Optimization Plan Designed to Reduce Annual Spending by $5 - $6 Million

SUMMIT, N.J., May 14, 2025 (GLOBE NEWSWIRE) -- Aterian, Inc. (Nasdaq: ATER) (“Aterian” or the “Company”), a consumer products company, today announced financial results for the first quarter ended March 31, 2025 (“Q1 2025”). The Company also provided an update on a series of initiatives that are underway to mitigate the impact of tariffs on the Company’s performance, including the commencement of a cost optimization plan designed to produce annual savings of approximately $5 - $6 million.

“While tariffs did not have a direct impact on our first quarter results, the uncertainty in the broader macroeconomic environment led to some softness in consumer demand,” said Arturo Rodriguez, Chief Executive Officer. “That said, sales seasonality remained consistent with prior years, and we continued to see solid performance across our core products.”

First Quarter 2025 Highlights
All comparisons are to the first quarter ended March 31, 2024 (“Q1 2024”)

  • Net revenue was $15.4 million compared to $20.2 million, primarily reflecting the previously announced SKU rationalization designed to focus on the Company’s most profitable products and changes to Amazon’s affiliate market program leading to reduced traffic and conversions for certain products.
  • Gross margin was 61.4% compared to 65.1%, reflecting a change in product mix.
  • Contribution margin decreased to 13.4% from 14.1%.
  • Operating loss narrowed to $(3.7) million from an operating loss of $(5.3) million. Q1 2025 operating loss included $(0.8) million of non-cash stock compensation, while Q1 2024 operating loss included $(1.7) million of non-cash stock compensation, and restructuring costs of $(0.6) million.
  • Net loss improved to $(3.9) million from $(5.2) million. Q1 2025 net loss included ($0.8) million of non-cash stock compensation and a gain on fair value of warrant liability of $0.1 million, while Q1 2024 net loss included ($1.7) million of non-cash stock compensation, restructuring costs of $(0.6) million, and a gain on fair value of warrant liability of $0.5 million.
  • Adjusted EBITDA loss was $(2.5) million compared to a loss of $(2.6) million.
  • Total cash balance at March 31, 2025 declined to $14.3 million from $18.0 million at December 31, 2024.

Tariff Mitigation Initiatives and Cost Optimization Plan

Mr. Rodriguez continued, “The uncertainty created by tariffs and broader macroeconomic conditions has energized our team to manage those elements of Aterian’s business that are within our control, including: 1) reducing fixed costs; 2) accelerating our plan of re-sourcing and diversifying our manufacturing; 3) hastening our advance towards a more resilient business model by deepening our expansion into consumables, the majority of which will be US-manufactured; and 4) strategically raising prices.”

“The actions we are taking will allow us to maintain an acceptable level of revenue during this transition period, conserve cash, preserve margin, maximize cash flow, and optimize our cost structure, all while maintaining the high level of innovation and customer service that has defined our company. This is a significant undertaking; however, we believe that these initiatives will mitigate the effects of tariffs on our results in 2025 and position Aterian to pivot towards a return to growth and profitability beyond 2025, even under prolonged tariff pressure.”

Tariff Response

  • Accelerated product re-sourcing and diversification initiatives to regions with more favorable cost and tariff structures.
  • Established a new goal of manufacturing no more than 30% of goods from China by the end of 2025 compared to a previously stated objective to reduce manufacturing in China to less than 40% by the second half of 2026.
  • Implemented strategic pricing increases across our product portfolio.
  • Remained on track for the late Q3 2025 launch of our Squatty Potty flushable wipes. We are redoubling our efforts to launch a portfolio of new tariff-exempt US-sourced consumable products in 2025, including additional wipe-based products.
  • Paused new product category launches originating in Asia, specifically our hard electronic goods.
  • Implemented supply chain and inventory changes, including partnering with our manufacturers to find cost savings, renegotiating price and delivery timelines, and accelerating expansion into non-US territories to mitigate the impact of tariffs and redirect a portion of our previously produced China inventory.

Cost Optimization Plan

These initiatives include emphasizing targeted workforce reductions and vendor savings. The plan is expected to generate $5-$6 million of pre-tax cost savings, $5 million of which is expected to be realized by the end of 2025 with the balance realized in 2026. The Company currently estimates that it will incur approximately $2.3 million in total costs associated with the plan.

Guidance Commentary

Josh Feldman, Chief Financial Officer, commented, “The current economic landscape is marked by significant uncertainty, and the rapidly changing market conditions make it challenging to predict future developments. Because of that, we are withdrawing our previously issued net revenue and Adjusted EBITDA guidance for 2025. However, we do believe that the steps underway will soften the impact of tariffs and their related costs for much of 2025. We will continue to evaluate our ability to provide guidance as the year progresses.”

Webcast and Conference Call Information

Aterian will host a live conference call to discuss financial results today, May 14, 2025, at 5:00 p.m. Eastern Time, which will be accessible by telephone and the internet. Investors interested in participating in the live call can dial:

  • (800) 715-9871 (Domestic)
  • (646) 307-1963 (International)
    Passcode: 1616427

Participants may also access the call through a live webcast at https://ir.aterian.io. The archived online replay will be available for a limited time after the call in the investors section of the Aterian corporate website.

Non-GAAP Financial Measures
For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the “Non-GAAP Financial Measures” section below. The most directly comparable GAAP financial measure for EBITDA and adjusted EBITDA is net loss and we are reporting a net loss for the quarter ending March 31, 2025 due primarily to our operating losses, which includes stock-based compensation expense, and interest expense. We are unable to reconcile the forward-looking statements of EBITDA and adjusted EBITDA in this press release to their nearest GAAP measures because the nearest GAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort.

About Aterian, Inc.
Aterian, Inc. (Nasdaq: ATER) is a consumer products company that builds and acquires leading e-commerce brands with top-selling consumer products, in multiple categories, including home and kitchen appliances, health and wellness and air quality devices. The Company sells across the world's largest online marketplaces with a focus on Amazon, Walmart and Target in the U.S. and on its own direct to consumer websites. Our primary brands include Squatty Potty, hOmeLabs, Mueller Living, PurSteam, Healing Solutions and Photo Paper Direct.

Forward Looking Statements
All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements regarding our ability to successfully implement our tariff mitigation and cost optimization plans, and the current global environment and inflation and our ability to return to growth and profitability beyond 2025, even under prolonged tariff pressure. These forward-looking statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties and other factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to our ability to continue as a going concern, the effect of tariffs and other costs on our results, our ability to continue to operate following our reduction in workforce, our ability to meet financial covenants with our lenders, our ability to maintain and to grow market share in existing and new product categories; our ability to continue to profitably sell the SKUs we operate; our ability to maintain Amazon’s Prime badge on our seller accounts or reinstate the Prime badge in the event of any removal of such badge by Amazon; our ability to create operating leverage and efficiency when integrating companies that we acquire, including through the use of our team’s expertise, the economies of scale of our supply chain and automation driven by our platform; those related to our ability to grow internationally and through the launch of products under our brands and the acquisition of additional brands; those related to consumer demand, our cash flows, financial condition, forecasting and revenue growth rate; our supply chain including sourcing, manufacturing, warehousing and fulfillment; our ability to manage expenses, working capital and capital expenditures efficiently; our business model and our technology platform; our ability to disrupt the consumer products industry; our ability to generate profitability and stockholder value; international tariffs and trade measures; inventory management, product liability claims, recalls or other safety and regulatory concerns; reliance on third party online marketplaces; seasonal and quarterly variations in our revenue; acquisitions of other companies and technologies and our ability to integrate such companies and technologies with our business; our ability to continue to access debt and equity capital (including on terms advantageous to the Company) and the extent of our leverage; and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), all of which you may obtain for free on the SEC’s website at www.sec.gov.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Investor Contact:

The Equity Group

Devin Sullivan
Managing Director
dsullivan@equityny.com

Conor Rodriguez
Associate
crodriguez@equityny.com

    
ATERIAN, INC.
Consolidated Balance Sheets
(in thousands, except share and per share data)
    
 December 31,
2024
 March 31,
2025
ASSETS   
Current assets:   
Cash$17,998  $14,337 
Accounts receivable, net 3,782   3,391 
Inventory 13,749   18,144 
Prepaid and other current assets 3,190   3,512 
Total current assets 38,719   39,384 
Property and equipment, net 685   689 
Intangibles, net 9,757   9,366 
Other non-current assets 381   379 
Total assets$49,542  $49,818 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Credit facility$6,948  $7,511 
Accounts payable 3,080   6,164 
Seller notes 466   471 
Accrued and other current liabilities 8,804   8,404 
Total current liabilities 19,298   22,550 
Other liabilities 227   229 
Total liabilities 19,525   22,779 
Commitments and contingencies   
Stockholders' equity:   
Common stock, $0.0001 par value, 500,000,000 shares authorized and 8,750,741 and 8,748,741 shares outstanding at December 31, 2024 and March 31, 2025, respectively 9   9 
Additional paid-in capital 742,591   743,374 
Accumulated deficit (711,677)  (715,573)
Accumulated other comprehensive loss (906)  (771)
Total stockholders’ equity 30,017   27,039 
Total liabilities and stockholders' equity$49,542  $49,818 
        


  
ATERIAN, INC. 
Consolidated Statements of Operations 
(in thousands, except share and per share data) 
  
 Three Months Ended March 31,
  2024   2025 
Net revenue$20,214  $15,360 
Cost of goods sold 7,046   5,936 
Gross profit 13,168   9,424 
Operating expenses:   
Sales and distribution 13,214   9,661 
General and administrative 5,232   3,459 
Total operating expenses 18,446   13,120 
Operating loss (5,278)  (3,696)
Interest expense, net 323   175 
Change in fair value of warrant liabilities (517)  (55)
Other expense, net 7   60 
Loss before provision for income taxes (5,091)  (3,876)
Provision for income taxes 71   20 
Net loss$(5,162) $(3,896)
Net loss per share, basic and diluted$(0.76) $(0.52)
Weighted-average number of shares outstanding, basic and diluted 6,789,955   7,452,957 
        


  
ATERIAN, INC. 
Consolidated Statement of Cash Flows 
(in thousands, except share and per share data)
  
 Three Months Ended March 31,
  2024   2025 
OPERATING ACTIVITIES:   
Net loss$(5,162) $(3,896)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 428   408 
Provision for sales returns 64   (72)
Amortization of deferred financing cost and debt discounts 83   37 
Stock-based compensation 1,667   783 
Change in deferred tax expense (5)   
Change in inventory provisions (976)  86 
Change in fair value of warrant liabilities (517)  (55)
Allowance for credit losses    (147)
Changes in assets and liabilities:   
Accounts receivable 1,843   538 
Inventory 2,846   (4,481)
Prepaid and other current assets 249   33 
Accounts payable, accrued and other liabilities (526)  2,898 
Cash used in operating activities (6)  (3,868)
INVESTING ACTIVITIES:   
Purchase of fixed assets (36)   
Purchase of minority equity investment (200)   
Cash used in investing activities (236)   
FINANCING ACTIVITIES:   
Repayments on seller notes (153)   
Borrowings from MidCap credit facilities 11,453   10,296 
Repayments for MidCap credit facilities (13,244)  (9,777)
Insurance obligation payments (254)  (235)
Insurance financing proceeds    156 
Cash provided by (used in) financing activities (2,198)  440 
Foreign currency effect on cash and restricted cash (49)  123 
Net change in cash and restricted cash for the year (2,489)  (3,305)
Cash and restricted cash at beginning of year 22,195   19,143 
Cash and restricted cash at end of year$19,706  $15,838 
RECONCILIATION OF CASH AND RESTRICTED CASH:   
Cash 17,545   14,337 
Restricted Cash—Prepaid and other current assets 2,032   1,372 
Restricted cash—Other non-current assets 129   129 
TOTAL CASH AND RESTRICTED CASH$19,706  $15,838 
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION   
Cash paid for interest$402  $200 
Cash paid for taxes$3  $5 
NON-CASH INVESTING AND FINANCING ACTIVITIES:   
Non-cash consideration paid to contractors$620  $ 
Non-cash minority equity investment$50  $ 
        

Non-GAAP Financial Measures

We believe that our financial statements and the other financial data included in this press release have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the U.S. (“GAAP”). However, for the reasons discussed below, we have presented certain non-GAAP measures herein.

We have presented the following non-GAAP measures to assist investors in understanding our core net operating results on an on-going basis: (i) Contribution Margin; (ii) Contribution margin as a percentage of net revenue; (iii) EBITDA (iv) Adjusted EBITDA; and (v) Adjusted EBITDA as a percentage of net revenue. These non-GAAP financial measures may also assist investors in making comparisons of our core operating results with those of other companies.

As used herein, Contribution margin represents gross profit less amortization of inventory step-up from acquisitions (included in cost of goods sold) and e-commerce platform commissions, online advertising, selling and logistics expenses (included in sales and distribution expenses). As used herein, Contribution margin as a percentage of net revenue represents Contribution margin divided by net revenue. As used herein, EBITDA represents net loss plus depreciation and amortization, interest expense, net and provision for income taxes. As used herein, Adjusted EBITDA represents EBITDA plus stock-based compensation expense, changes in fair-market value of warrant liability, restructuring expenses, and other expenses, net. As used herein, Adjusted EBITDA as a percentage of net revenue represents Adjusted EBITDA divided by net revenue. Contribution margin, EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to loss from operations or net loss, as determined under GAAP.

We present Contribution margin and Contribution margin as a percentage of net revenue, as we believe each of these measures provides an additional metric to evaluate our operations and, when considered with both our GAAP results and the reconciliation to gross profit, provides useful supplemental information for investors. Specifically, Contribution margin and Contribution margin as a percentage of net revenue are two of our key metrics in running our business. All product decisions made by us, from the approval of launching a new product and to the liquidation of a product at the end of its life cycle, are measured primarily from Contribution margin and/or Contribution margin as a percentage of net revenue. Further, we believe these measures provide improved transparency to our stockholders to determine the performance of our products prior to fixed costs as opposed to referencing gross profit alone.

In the reconciliation to calculate contribution margin, we add e-commerce platform commissions, online advertising, selling and logistics expenses (“sales and distribution variable expense”) to gross profit to inform users of our financial statements of what our product profitability is at each period prior to fixed costs (such as sales and distribution expenses such as salaries as well as research and development expenses and general administrative expenses). By excluding these fixed costs, we believe this allows users of our financial statements to understand our products performance and allows them to measure our products performance over time.

We present EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue because we believe each of these measures provides an additional metric to evaluate our operations and, when considered with both our GAAP results and the reconciliation to net loss, provide useful supplemental information for investors. We use these measures with financial measures prepared in accordance with GAAP, such as sales and gross margins, to assess our historical and prospective operating performance, to provide meaningful comparisons of operating performance across periods, to enhance our understanding of our operating performance and to compare our performance to that of our peers and competitors. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue are useful to investors in assessing the operating performance of our business without the effect of non-cash items.

Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue should not be considered in isolation or as alternatives to net loss, loss from operations or any other measure of financial performance calculated and prescribed in accordance with GAAP. Neither EBITDA, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue should be considered a measure of discretionary cash available to us to invest in the growth of our business. Our Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue may not be comparable to similar titled measures in other organizations because other organizations may not calculate Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue in the same manner as we do. Our presentation of Contribution margin and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from such terms or by unusual or non-recurring items.

We recognize that EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue, have limitations as analytical financial measures. For example, neither EBITDA nor Adjusted EBITDA reflects:

  • our capital expenditures or future requirements for capital expenditures or mergers and acquisitions;
  • the interest expense or the cash requirements necessary to service interest expense or principal payments, associated with indebtedness;
  • depreciation and amortization, which are non-cash charges, although the assets being depreciated and amortized will likely have to be replaced in the future, or any cash requirements for the replacement of assets;
  • changes in cash requirements for our working capital needs; or
  • changes in fair value of warrant liabilities

Additionally, Adjusted EBITDA excludes non-cash expense for stock-based compensation, which is and is expected to remain a key element of our overall long-term incentive compensation package.

We also recognize that Contribution margin and Contribution margin as a percentage of net revenue have limitations as analytical financial measures. For example, Contribution margin does not reflect:

  • general and administrative expense necessary to operate our business;
  • research and development expenses necessary for the development, operation and support of our software platform;
  • the fixed costs portion of our sales and distribution expenses including stock-based compensation expense; or
  • changes in fair value warrant liabilities

Contribution Margin

The following table provides a reconciliation of Contribution margin to gross profit and Contribution margin as a percentage of net revenue to gross profit as a percentage of net revenue, which are the most directly comparable financial measures presented in accordance with GAAP.

  
 Three Months Ended March 31,
  2024   2025 
 (in thousands, except percentages)
Gross Profit$13,168  $9,424 
Less:   
E-commerce platform commissions, online advertising, selling and logistics expenses (10,320)  (7,373)
Contribution margin$2,848  $2,051 
Gross Profit as a percentage of net revenue 65.1%  61.4%
Contribution margin as a percentage of net revenue 14.1%  13.4%
        

Adjusted EBITDA

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net loss, which is the most directly comparable financial measure presented in accordance with GAAP:

  
 Three Months Ended March 31,
  2024   2025 
 (in thousands, except percentages)
Net loss$(5,162) $(3,896)
Add:   
Provision for income taxes 71   20 
Interest expense, net 323   175 
Depreciation and amortization 428   408 
EBITDA (4,340)  (3,293)
Other expense, net 7   60 
Change in fair market value of warrant liabilities (517)  (55)
Restructuring expense 558    
Stock-based compensation expense 1,667   783 
Adjusted EBITDA$(2,625) $(2,505)
Net loss as a percentage of net revenue (25.5)%  (25.4)%
Adjusted EBITDA as a percentage of net revenue (13.0)%  (16.3)%
        

Each of our products typically goes through the Launch phase and depending on its level of success is moved to one of the other phases as further described below:

  1. Launch phase: During this phase, we leverage our technology to target opportunities identified using AIMEE (Artificial Intelligence Marketplace e-Commerce Engine) and other sources. This phase also includes revenue from new product variations and relaunches. During this period of time, due to the combination of discounts and investment in marketing, our net margin for a product could be as low as approximately negative 35%. Net margin is calculated by taking net revenue less the cost of goods sold, less fulfillment, online advertising and selling expenses. These primarily reflect the estimated variable costs related to the sale of a product.
  2. Sustain phase: Our goal is for every product we launch to enter the sustain phase and become profitable, with a target of positive 15% net margin for most products, within approximately three months of launch on average. Net margin primarily reflects a combination of manual and automated adjustments in price and marketing spend.
  3. Liquidate phase: If a product does not enter the sustain phase or if the customer satisfaction of the product (i.e., ratings) is not satisfactory, then it will go to the liquidate phase and we will sell through the remaining inventory. Products can also be liquidated as part of inventory normalization especially when steep discounts are required.

The following tables break out our first quarter of 2024 and 2025 results of operations by our product phases (in thousands):

  
 Three months ended March 31, 2024
 Sustain Launch Liquidation/
Other
 Fixed Costs Stock Based
Compensation
 Total
Net revenue$18,200 $408 $1,606 $ $ $20,214
Cost of goods sold 6,449  125  472      7,046
Gross profit 11,751  283  1,134      13,168
Operating expenses:           
Sales and distribution expenses 8,833  232  1,255  2,595  299  13,214
General and administrative       3,864  1,368  5,232
            
 Three months ended March 31, 2025
 Sustain Launch Liquidation/
Other
 Fixed Costs Stock Based
Compensation
 Total
Net revenue$14,638 $386 $336 $ $ $15,360
Cost of goods sold 5,499  241  196      5,936
Gross profit 9,139  145  140      9,424
Operating expenses:           
Sales and distribution expenses 6,879  268  326  1,996  192  9,661
General and administrative       2,868  591  3,459
                  

FAQ

What were Aterian's (ATER) Q1 2025 revenue and earnings results?

Aterian reported Q1 2025 net revenue of $15.4M (down from $20.2M in Q1 2024) and a net loss of $(3.9M) (improved from $(5.2M) in Q1 2024).

How much cost savings is Aterian (ATER) targeting in their optimization plan?

Aterian's cost optimization plan aims to generate $5-6M in annual pre-tax cost savings, with $5M expected by end of 2025 and the remainder in 2026.

What is Aterian's (ATER) strategy to address tariff impacts?

Aterian plans to reduce China manufacturing to 30% by end of 2025, implement strategic price increases, expand into US-sourced consumables, and partner with manufacturers for cost savings.

Why did Aterian (ATER) withdraw its 2025 guidance?

Aterian withdrew guidance due to significant economic uncertainty and rapidly changing market conditions making future developments challenging to predict.

What was Aterian's (ATER) cash position at the end of Q1 2025?

Aterian's total cash balance was $14.3M as of March 31, 2025, down from $18.0M at December 31, 2024.
Aterian Inc

NASDAQ:ATER

ATER Rankings

ATER Latest News

ATER Stock Data

16.45M
7.48M
21.95%
8.8%
2.74%
Furnishings, Fixtures & Appliances
Electric Housewares & Fans
Link
United States
SUMMIT