Hour Loop Reports Third Quarter of 2025 Results

Rhea-AI Summary

Hour Loop (NASDAQ: HOUR) reported third-quarter 2025 results with net revenues of $33.4M (up 7.6% vs. $31.1M year-ago) and net income of $0.53M (or $0.01 diluted).

Gross margin declined to 51.4% of revenues from 54.8% year-ago, while operating expenses fell to 49.2% of revenues from 52.5%, supporting higher net income despite tariff-driven cost pressure. Cash was $0.8M at Sept 30, 2025; inventories rose to $28.9M from $14.6M at Dec 31, 2024. The company said it will not provide 2025 guidance due to economic and tariff uncertainty.

Positive

• Net revenues +7.6% to $33.4M in Q3 2025
• Net income increased to $0.53M (Q3 2025)
• Operating expenses declined to 49.2% of revenues, improving expense efficiency
• Cash used in operating activities improved vs. prior nine-month period (from $1.2M used to $0.4M used)

Negative

• Gross profit margin fell by 3.4 percentage points to 51.4% in Q3 2025
• Cash and cash equivalents declined to $0.8M as of Sept 30, 2025
• Inventories nearly doubled to $28.9M from $14.6M at year-end 2024, tying up working capital
• Company cannot provide full-year 2025 guidance due to tariff-driven economic uncertainty

Insights

Equity Analyst

Modest revenue growth and slight net income improvement, but low cash and heavy inventory build raise short-term liquidity questions.

Hour Loop delivered higher net revenues of $33.4 million (up 7.6%) and reported net income of $0.53 million ($0.01 per diluted share). Gross margin contracted to 51.4% from 54.8%, while operating expenses fell to 49.2% of revenues, supporting the small net income gain.

The company holds only $0.8 million in cash as of September 30, 2025, and a materially larger inventory position of $28.9 million, up from $14.6 million at year-end. These facts point to a working capital profile driven by inventory accumulation and a tighter cash cushion; the firm also cites tariff-driven cost pressure and says it cannot provide full-year guidance due to uncertainty.

Key items to monitor include cash flow from operations and any near-term liquidity actions, realized margin impact from the tariff surcharge, and inventory turnover through the remainder of 2025. Given the disclosed facts, the operational improvements lowered expense ratios but the low cash balance against high inventory suggests neutral near-term implications overall.

Profitability Continues Despite Challenges for the Overall Economy

Redmond, WA, Nov. 12, 2025 (GLOBE NEWSWIRE) -- Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the quarter ended September 30, 2025.

Financial Highlights for Third Quarter of 2025:

●	Net revenues increased 7.6% to $33.4 million, compared to $31.1 million in the year-ago period;
●	Net income increased to $0.53 million, compared to $0.47 million in the year-ago period; and
●	Cash used in operating activities for the nine months ended September 30, 2025, was $0.4 million, compared to cash used by operating activities of $1.2 million in the year-ago period.

Management Commentary

“The U.S. reciprocal tariffs are too important to overlook, as they have a substantial impact on retail industries. We were forced to reshape our product portfolio, front-load our inventory and enhance logistical flexibility. Retailers have had to adapt quickly to rising costs and increased operational complexity,” said Sam Lai, CEO and interim CFO of Hour Loop.

“Although we faced numerous challenges, our sales and net income in the third quarter represent our strongest results to date, accompanied by only a modest decline in gross margin due to tariff impact.”

“The results demonstrate the durability of our operating model. Over time, the Company has made deliberate and strategic investments to drive operational excellence, optimize its structural cost base, and sustain long-term profitability. In the third quarter of 2025, these efforts drove lower operating expenses and higher net income despite elevated product costs. We believe these results are not temporary adjustments but reflect enduring structural improvements that position us to navigate market volatility and outperform across business cycles.”

“Looking ahead, we believe we are well positioned to capitalize on future opportunities. Our strengthened operating model provides the agility to safeguard margins while pursuing disciplined, strategic growth as market conditions evolve.”

“We extend our sincere appreciation to our shareholders for their continued confidence and support. To our global team, whose focus and execution have driven this performance — thank you. We are proud of what we have accomplished together and remain steadfast in our commitment to delivering sustainable, long-term value, even in a challenging and dynamic environment.”

Third Quarter of 2025 Financial Results

Net revenues in the third quarter of 2025 were $33.4 million, compared to $31.1 million in the year-ago period. The increase was mainly supported by our 3–6-month inventory purchase cycle starting from the previous quarter, which allowed us to build stock ahead and maintain higher availability.

Gross profit percentage for the third quarter of 2025 decreased 3.4% to 51.4% of net revenues, compared to 54.8% of net revenues in the comparable period a year ago. The decrease was primarily driven by strategic price adjustments and tariff surcharge.

Operating expenses as a percentage of net revenues decreased 3.3% to 49.2%, compared to 52.5% of net revenues in the year-ago period. The decrease was mainly caused by the improvement of our operational efficiency.

Net income in the third quarter of 2025 was $0.53 million, or $0.01 per diluted share, compared to $0.47 million, or $0.01 per diluted share, in the comparable year-ago period. The increase was driven by increased costs and decreased expenses because of the reasons mentioned above.

As of September 30, 2025, the Company had $0.8 million in cash and cash equivalents, compared to $2.1 million as of December 31, 2024. This decrease was driven by the loan repayment and growth of inventories.

Inventories as of September 30, 2025, were $28.9 million, compared to $14.6 million as of December 31, 2024. The increase was due to growth in inventory in view of the upcoming holiday season.

Full Year 2025 Financial Outlook

For the full year 2025, Hour Loop is not able to provide forward-looking guidance at this time due to ongoing economic uncertainty, primarily influenced by current tariff conditions.

About Hour Loop, Inc.

Hour Loop is an online retailer engaged in e-commerce retailing in the U.S. market. It has operated as a third-party seller on www.amazon.com and has sold merchandise on its website at www.hourloop.com since 2013. Hour Loop further expanded its operations to other marketplaces such as Walmart, eBay, and Etsy. To date, Hour Loop has generated practically all its revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from its own website and other marketplaces. Hour Loop manages more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparel, and electronics. Hour Loop’s primary strategy is to bring most of its vendors’ product selections to the customers. It has advanced software that assists Hour Loop in identifying product gaps so it can keep such products in stock year-round, including the entirety of the last quarter (holiday season) of the calendar year. In upcoming years, Hour Loop plans to expand its business rapidly by increasing the number of business managers, vendors, and SKUs.

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements,” including with respect to Hour Loop’s business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of Hour Loop. While Hour Loop believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to Hour Loop on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in Hour Loop’s filings with the Securities and Exchange Commission, as the same may be updated from time to time. Thus, actual results could be materially different. Hour Loop undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.

Investor Contact

Finance Department, Hour Loop, Inc.
finance@hourloop.com

Item 1. Financial Statements.

HOUR LOOP, INC.
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars, except for share and per share data)
As of September 30, 2025 and December 31, 2024
(Unaudited)

		September 30, 2025				December 31, 2024
ASSETS
Current assets
Cash		$	796,307			$	2,119,581
Accounts receivable, net			546,474				1,650,547
Inventory, net			28,876,262				14,640,632
Prepaid expenses and other current assets			825,343				327,894
Total current assets			31,044,386				18,738,654
Property and equipment, net			81,986				56,797
Deferred tax assets			383,736				1,060,104
Operating lease right-of-use lease assets			110,163				111,409
Total non-current assets			575,885				1,228,310
TOTAL ASSETS		$	31,620,271			$	19,966,964
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	15,413,200			$	4,176,305
Credit cards payable			3,860,310				3,389,880
Short-term loan			658,003				610,967
Operating lease liabilities-current			66,475				114,540
Accrued expenses and other current liabilities			1,225,035				2,322,535
Due to related parties			2,660,418				4,192,995
Total current liabilities			23,883,441				14,807,222
Non-current liabilities
Operating lease liabilities-non-current			48,426				-
Deferred tax liabilities			18,731				-
Total non-current liabilities			67,157				-
Total liabilities			23,950,598				14,807,222
Commitments and contingencies			-				-
Stockholders’ equity
Preferred stock: $0.0001 par value per share, 10,000,000 shares authorized; none issued and outstanding as of September 30, 2025 and December 31, 2024			-				-
Common stock: $0.0001 par value per share, 300,000,000 shares authorized; 35,171,565 and 35,143,460 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively			3,517				3,514
Additional paid-in capital			5,847,683				5,802,686
Retained earnings (accumulated deficit)			1,766,934				(595,175	)
Accumulated other comprehensive income (loss)			51,539				(51,283	)
Total stockholders’ equity			7,669,673				5,159,742
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	31,620,271			$	19,966,964

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

HOUR LOOP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In U.S. Dollars, except for share and per share data)
For the Three Months and Nine Months Ended September 30, 2025 and 2024
(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Revenues, net		$	33,424,703			$	31,075,498			$	86,364,899			$	83,827,327
Cost of revenues			(16,249,395	)			(14,036,187	)			(39,546,941	)			(36,710,400	)
Gross profit			17,175,308				17,039,311				46,817,958				47,116,927
Operating expenses
Selling and marketing			14,665,407				14,585,652				37,627,975				38,603,540
General and administrative			1,767,895				1,731,816				5,906,261				5,316,176
Total operating expenses			16,433,302				16,317,468				43,534,236				43,919,716
Income from operations			742,006				721,843				3,283,722				3,197,211
Other (expenses) income
Other expense			(8,186	)			(516	)			(10,185	)			(6,449	)
Interest expense			(42,496	)			(62,862	)			(133,333	)			(186,958	)
Other income			22,607				28,933				92,344				116,444
Total other expenses, net			(28,075	)			(34,445	)			(51,174	)			(76,963	)
Income before income taxes			713,931				687,398				3,232,548				3,120,248
Income tax expense			(183,340	)			(217,751	)			(870,439	)			(935,637	)
Net income			530,591				469,647				2,362,109				2,184,611
Other comprehensive (loss) income
Foreign currency translation adjustments			(38,581	)			15,966				102,822				(8,625	)
Total comprehensive income		$	492,010			$	485,613			$	2,464,931			$	2,175,986
Basic and diluted income per common share		$	0.01			$	0.01			$	0.07			$	0.06
Weighted-average number of common shares outstanding			35,171,320				35,130,677				35,161,068				35,111,844

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

HOUR LOOP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
For the Nine Months Ended September 30, 2025 and 2024
(Unaudited)

		Nine Months Ended September 30,
		2025				2024
Cash flows from operating activities
Net income		$	2,362,109			$	2,184,611
Reconciliation of net income to net cash used in operating activities:
Depreciation expenses			31,109				98,624
Amortization of operating lease right-of-use lease assets			141,320				157,520
Deferred tax assets			676,368				736,868
Deferred tax liabilities			18,731				-
Stock-based compensation			45,000				60,042
Inventory allowance			499,752				578,622
Unrealized foreign exchange gain			156,087				-
Gain on disposal of property and equipment			(3,016	)			-
Changes in operating assets and liabilities:
Accounts receivable			1,104,073				199,426
Inventory			(14,735,382	)			(15,383,373	)
Prepaid expenses and other current assets			(497,449	)			(254,418	)
Accounts payable			11,236,895				11,640,380
Credit cards payable			470,430				(174,768	)
Accrued expenses and other current liabilities			(1,791,077	)			(922,149	)
Operating lease liabilities			(139,950	)			(153,270	)
Income taxes payable			-				-
Net cash used in operating activities			(425,000	)			(1,231,885	)
Cash flows from investing activities:
Proceeds from disposal of property and equipment			3,016				-
Purchases of property and equipment			(51,979	)			(35,031	)
Net cash used in investing activities			(48,963	)			(35,031	)
Cash flows from financing activities:
Payments to related parties			(839,000	)			-
Net cash used in financing activities			(839,000	)			-
Effect of changes in foreign currency exchange rates			(10,311	)			(22,998	)
Net change in cash			(1,323,274	)			(1,289,914	)
Cash at beginning of the period			2,119,581				2,484,153
Cash at end of the period		$	796,307			$	1,194,239
Supplemental disclosures of cash flow information:
Cash paid for interest		$	16,370			$	15,266
Cash paid for income tax		$	163,015			$	210,811
Non-cash investing and financing activities:
Operating lease right-of-use of assets and operating lease liabilities recognized		$	131,472			$	248,917

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

FAQ

What were Hour Loop (HOUR) Q3 2025 revenues and year-over-year change?

Hour Loop reported $33.4M in net revenues for Q3 2025, a 7.6% increase versus Q3 2024.

How did Hour Loop's gross margin and operating expenses change in Q3 2025?

Gross margin fell to 51.4% of revenues (down 3.4 pts); operating expenses improved to 49.2% of revenues (down 3.3 pts).

What was Hour Loop's cash position and inventory level at Sept 30, 2025?

Cash and cash equivalents were $0.8M and inventories were $28.9M as of Sept 30, 2025.

Did Hour Loop provide full-year 2025 guidance after its Nov 12, 2025 results?

No. The company said it cannot provide forward-looking guidance for full-year 2025 due to ongoing tariff-related economic uncertainty.

What drove Hour Loop's revenue increase in Q3 2025?

Management attributed the revenue increase mainly to a 3–6 month inventory purchase cycle that raised product availability ahead of the quarter.

How did tariffs affect Hour Loop's Q3 2025 results (HOUR)?

The company said reciprocal U.S. tariffs increased product costs and required portfolio and inventory adjustments, contributing to a lower gross margin.