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Aterian Reports Third Quarter 2023 Results

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Aterian, Inc. (Nasdaq: ATER) Announces Third Quarter 2023 Net Revenue of $39.7 Million and a 94.6% Improvement in Net Loss. Operating Loss Decreases by 94.0% Year Over Year. Fourth Quarter 2023 Outlook Includes Expected Net Revenue of $28-32 Million and Adjusted EBITDA Loss of ($6.5)-($7.5) Million.
Positive
  • Aterian, Inc. reports a 40.2% decline in net revenue for the third quarter of 2023 compared to the same period in 2022.
  • Gross margin increased to 49.4% in the third quarter of 2023, reflecting the impact of improved pricing on inventory liquidations.
  • Operating loss decreased by 94.0% year over year, from ($108.9) million in the third quarter of 2022 to ($6.5) million in the third quarter of 2023.
  • Net loss improved by 94.6% year over year, from ($116.9) million in the third quarter of 2022 to ($6.3) million in the third quarter of 2023.
  • Adjusted EBITDA loss improved by 51.3% year over year, from ($9.1) million in the third quarter of 2022 to ($4.4) million in the third quarter of 2023.
Negative
  • None.

Reports Third Quarter 2023 Net Revenue of $39.7 Million

Third Quarter Net Loss Improves by 94.6% Year Over Year While Adjusted EBITDA Loss Improves by 51.3 %

NEW YORK, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Aterian, Inc. (Nasdaq: ATER) (“Aterian” or the “Company”) today announced results for the third quarter ended September 30, 2023. 

Third Quarter Highlights

  • Third quarter 2023 net revenue declined 40.2% to $39.7 million, compared to $66.3 million in the third quarter of 2022.
  • Third quarter 2023 gross margin increased to 49.4%, compared to 45.5% in the third quarter of 2022, primarily reflecting the impact of improved pricing on inventory liquidations.
  • Third quarter 2023 contribution margin increased to 3.0% from 1.1% in the third quarter of 2022, primarily reflecting the impact of improved pricing on inventory liquidations.
  • Third quarter 2023 operating loss of ($6.5) million decreased compared to a loss of ($108.9) million in the third quarter of 2022, an improvement of 94.0%. Third quarter 2023 operating loss includes ($1.2) million of non-cash stock compensation, and restructuring costs of ($0.4) million, while third quarter 2022 operating loss included a gain of $0.8 million from the change in fair value of earn-out liabilities, a non-cash loss of ($90.9) million from the impairment on goodwill, a non-cash loss of ($3.1) million on the impairment on intangibles and ($2.9) million of non-cash stock compensation.
  • Third quarter 2023 net loss of ($6.3) million decreased from a ($116.9) million loss in the third quarter of 2022, an improvement of 94.6%. Third quarter 2023 net loss includes ($1.2) million of non-cash stock compensation, restructuring costs of ($0.4) million, and a gain on fair value of warrant liability of $0.6 million, while third quarter 2022 net loss included a gain of $5.5 million in net charges from the changes in fair value of warrants, a loss of ($12.8) million from the derivative related to offering of common stock, ($2.9) million of non-cash stock compensation, a gain of $0.8 million from the change in fair value of earn-out liabilities, a non-cash loss of ($90.9) million from the impairment on goodwill, and a non-cash loss of ($3.1) million on the impairment on intangibles.
  • Third quarter 2023 adjusted EBITDA loss of ($4.4) million decreased from a ($9.1) million loss in the third quarter of 2022, an improvement of 51.3%.
  • Total cash balance at September 30, 2023 was $28.0 million.

Fourth Quarter 2023 Outlook

For the fourth quarter 2023, taking into account the current global environment and inflation, we believe that net revenue will be between $28 million and $32 million and that adjusted EBITDA loss will be between ($6.5) million to ($7.5) million which includes an estimated incremental $2.0 million negative impact from anticipated fourth quarter pricing initiatives for higher price inventory in relation to Black Friday and Cyber Monday Sale Programs.

The Company’s fourth quarter 2023 guidance is based on a number of assumptions that are subject to change, any of which are outside the Company’s control. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.

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 expect to report a net loss for the three months ending December 31, 2023, 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.

Webcast and Conference Call Information

Aterian will host a live conference call to discuss financial results today, November 8, 2023, at 5:00 p.m. Eastern Time, which will be accessible by telephone and the internet. To access the call, participants from within the U.S. should dial (800) 715-9871 and participants from outside the U.S. should dial (646) 307-1963 and ask to be joined into the Aterian, Inc. call. 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 Relations section of the Aterian website.

About Aterian, Inc.

Aterian, Inc. (Nasdaq: ATER) is a technology-enabled consumer product 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. By leveraging its cloud-based platform, Artificial Intelligence Marketplace Ecommerce Engine (AIMEE™), the Company sells across the world's largest online marketplaces with a focus on Amazon and Walmart and on its own direct to consumer websites.

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 projected fourth quarter net revenue and adjusted EBITDA, the current global environment and inflation. 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, 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 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.


ATERIAN, INC.
Consolidated Balance Sheets
(in thousands, except share and per share data)

 
  December 31,
2022
 September 30,
2023
ASSETS    
Current assets:    
Cash $43,574  $27,955 
Accounts receivable, net  4,515   3,271 
Inventory  43,666   31,493 
Prepaid and other current assets  8,261   5,963 
Total current assets  100,016   68,682 
Property and equipment, net  853   792 
Other intangibles, net  54,757   12,016 
Other non-current assets  813   541 
Total assets $156,439  $82,031 
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current Liabilities:    
Credit facility $21,053  $14,182 
Accounts payable  16,035   12,464 
Seller notes  1,693   1,196 
Accrued and other current liabilities  14,254   10,740 
Total current liabilities  53,035   38,582 
Other liabilities  1,452   1,540 
Total liabilities  54,487   40,122 
Commitments and contingencies    
Stockholders' equity:    
Common stock, $0.0001 par value, 500,000,000 shares authorized and 80,752,290 and 89,132,183 shares outstanding at December 31, 2022 and September 30, 2023, respectively  8   9 
Additional paid-in capital  728,339   735,110 
Accumulated deficit  (625,251)  (692,108)
Accumulated other comprehensive loss  (1,144)  (1,102)
Total stockholders’ equity  101,952   41,909 
Total liabilities and stockholders' equity $156,439  $82,031 


ATERIAN, INC.
Consolidated Statements of Operations
(in thousands, except share and per share data)

 
  Three Months Ended September 30, Nine Months Ended September 30,
   2022   2023   2022   2023 
Net revenue $66,326  $39,668  $166,268  $109,811 
Cost of good sold  36,135   20,085   81,118   56,236 
Gross profit  30,191   19,583   85,150   53,575 
Operating expenses:        
Sales and distribution  33,792   20,921   88,632   61,704 
Research and development  1,706   852   4,582   3,808 
General and administrative  10,369   4,326   29,481   16,566 
Impairment loss on goodwill  90,921      119,941    
Impairment loss on intangibles  3,118      3,118   39,445 
Change in fair value of contingent earn-out liabilities  (774)     (5,240)   
Total operating expenses  139,132   26,099   240,514   121,523 
Operating loss  (108,941)  (6,516)  (155,364)  (67,948)
Interest expense, net  904   359   2,043   1,076 
Gain on extinguishment of seller note        (2,012)   
Loss on initial issuance of equity  12,834      18,669    
Change in fair value of warrant liability  (5,528 { "@context": "https://schema.org", "@type": "FAQPage", "name": "Aterian Reports Third Quarter 2023 Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What is Aterian, Inc.'s (Nasdaq: ATER) net revenue for the third quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "Aterian, Inc. reported a net revenue of $39.7 million for the third quarter of 2023, representing a 40.2% decline from the same period in 2022." } }, { "@type": "Question", "name": "How much did Aterian, Inc.'s gross margin increase in the third quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "Aterian, Inc.'s gross margin increased to 49.4% in the third quarter of 2023, reflecting the impact of improved pricing on inventory liquidations." } }, { "@type": "Question", "name": "What is Aterian, Inc.'s expected net revenue for the fourth quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "Aterian, Inc. expects net revenue to be between $28 million and $32 million for the fourth quarter of 2023." } }, { "@type": "Question", "name": "How much did Aterian, Inc.'s net loss improve in the third quarter of 2023 compared to the same period in 2022?", "acceptedAnswer": { "@type": "Answer", "text": "Aterian, Inc.'s net loss improved by 94.6% year over year, from ($116.9) million in the third quarter of 2022 to ($6.3) million in the third quarter of 2023." } }, { "@type": "Question", "name": "What is Aterian, Inc.'s expected adjusted EBITDA loss for the fourth quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "Aterian, Inc. expects an adjusted EBITDA loss between ($6.5) million and ($7.5) million for the fourth quarter of 2023." } } ] }

FAQ

What is Aterian, Inc.'s (Nasdaq: ATER) net revenue for the third quarter of 2023?

Aterian, Inc. reported a net revenue of $39.7 million for the third quarter of 2023, representing a 40.2% decline from the same period in 2022.

How much did Aterian, Inc.'s gross margin increase in the third quarter of 2023?

Aterian, Inc.'s gross margin increased to 49.4% in the third quarter of 2023, reflecting the impact of improved pricing on inventory liquidations.

What is Aterian, Inc.'s expected net revenue for the fourth quarter of 2023?

Aterian, Inc. expects net revenue to be between $28 million and $32 million for the fourth quarter of 2023.

How much did Aterian, Inc.'s net loss improve in the third quarter of 2023 compared to the same period in 2022?

Aterian, Inc.'s net loss improved by 94.6% year over year, from ($116.9) million in the third quarter of 2022 to ($6.3) million in the third quarter of 2023.

What is Aterian, Inc.'s expected adjusted EBITDA loss for the fourth quarter of 2023?

Aterian, Inc. expects an adjusted EBITDA loss between ($6.5) million and ($7.5) million for the fourth quarter of 2023.

Aterian, Inc.

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Heating Equipment (except Warm Air Furnaces) Manufacturing
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