Koss Corporation Reports First Quarter Results

Rhea-AI Summary

Koss Corporation (NASDAQ: KOSS) reported results for the quarter ended September 30, 2025: net sales $4,070,778 (+27.1% vs prior year) and net income $243,729 versus a prior-year net loss of $419,535. EPS $0.03 basic and diluted compared with a ($0.05) loss per share a year earlier.

Drivers included a considerable sale to the Company's largest Education customer and direct-to-consumer (DTC) sales +22.5%. Gross margin rose 340 bps to 40.0%, partly offset by tariffs on China-produced goods at the highest 145% rate. Management promoted Michael J. Koss, Jr. to Executive Vice President and will continue monitoring tariff risk.

Positive

• Net sales +27.1% to $4,070,778 for Q1 FY2026
• Net income turned positive to $243,729 vs loss $419,535 prior year
• EPS $0.03 basic and diluted compared with ($0.05) prior year
• Gross margin +340 bps to 40.0% year-over-year
• DTC sales growth of 22.5% year-over-year

Negative

• Operating loss of $46,040 in the quarter despite net income
• Sales to Europe declined due to distributor reorder timing
• Exposure to a 145% tariff on China-produced goods could materially affect operations
• Company relied on $293,128 of interest income to support pre-tax results

MILWAUKEE, Wis., Oct. 30, 2025 (GLOBE NEWSWIRE) -- Koss Corporation (NASDAQ: KOSS) (the “Company”), the U.S. based high-fidelity headphone company, has reported its results for the first quarter ended September 30, 2025.

For the three months ended September 30, 2025, net sales of $4,070,778 were $868,910, or 27.1%, higher compared to $3,201,868 for the same three-month period in the prior year. Net income of $243,729 for the quarter ended September 30, 2025 compared favorably to a net loss of $419,535 for the first quarter of the prior fiscal year. Both basic and diluted net income per share for the three months ended September 30, 2025 were $0.03 compared to basic and diluted net loss per common share for the first quarter of the prior fiscal year of ($0.05).

“A considerable sale to our largest Education market customer, together with a 22.5% growth in sales in our direct-to-consumer (DTC) business, led the way to the overall first quarter sales success. While sales to Europe declined year-over-year, due mainly to our two largest distributors pushing re-orders to next quarter, sales to the Asian markets came in strong, making up some of the export shortfall,” Michael J. Koss, Chairman and CEO, said today. “DTC sales benefitted from new product launches in addition to new colorways of products launched in the prior fiscal year.”

Koss went on to note that gross margins improved by 340 basis points in the first three months of fiscal year 2026 compared to the same period last year, moving from 36.6% to 40.0%, primarily due to a favorable customer and market mix, namely a higher volume of higher margin DTC sales.

Additionally, Koss stated, “While the Company experienced an adverse impact on gross margins related to the sale of product brought in at the highest 145% tariff on China-produced goods, higher absorption of fixed manufacturing costs and a reduction in the amount of reserve added for excess and obsolete inventory when compared to the first quarter in the prior fiscal year provided some offset. As an increase in tariffs could have a significant impact on the Company’s operations due to the Company’s reliance on products coming from China, the Company continues to closely monitor the tariff landscape and will act accordingly to minimize negative effects.

The Company also announced the promotion of Michael J. Koss, Jr. to Executive Vice President, in recognition of his significant contributions to the creation of new products, the growth of the Company’s direct to consumer segment, and his leadership in the enforcement actions related to the firm’s patented intellectual property. Mr. Koss will continue in his current role in Marketing and Product and add oversight of the sourcing and logistics team to his portfolio.
        
About Koss Corporation

 Koss Corporation markets a complete line of high-fidelity headphones, wireless Bluetooth® speakers, computer headsets, telecommunications headsets, active noise canceling headphones, and wireless headphones.

Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “aims,” "anticipates," "believes," "estimates," "expects," "intends," "plans," “thinks,” "may," "will," “shall,” "should," “could,” “would,” "forecasts," "predicts," "potential," "continue," or the negative of such terms and other comparable terminology. These statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual events or results may differ materially. In evaluating forward-looking statements, you should specifically consider various factors that may cause actual results to vary from those contained in the forward-looking statements, such as general economic conditions, inflationary cost environment, supply chain disruption, the impacts of public health events, such as pandemics, geopolitical instability and war, consumer demand for the Company's and its customers' products, competitive and technological developments, foreign currency fluctuations, and costs of operations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances or new information. In addition, such uncertainties and other operational matters are discussed further in the Company's quarterly and annual filings with the Securities and Exchange Commission.

KOSS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended
	September 30
	2025				2024
Net sales	$	4,070,778			$	3,201,868
Cost of goods sold		2,442,086				2,028,942
Gross profit		1,628,692				1,172,926
Selling, general and administrative expenses		1,674,732				1,810,059
Loss from operations		(46,040	)			(637,133	)
Other income (expense):
Interest income		293,128				220,358
Interest expense		(599	)			—
Total other income, net		292,529				220,358
Income (loss) before income tax provision		246,489				(416,775	)
Income tax provision		2,760				2,760
Net income (loss)	$	243,729			$	(419,535	)
Income (loss) per common share:
Basic	$	0.03			$	(0.05	)
Diluted	$	0.03			$	(0.05	)
Weighted-average number of shares:
Basic		9,456,438				9,310,002
Diluted		9,537,817				9,310,002

CONTACT:	Michael J. Koss
	Chairman & CEO
	(414) 964-5000
	mjkoss@koss.com

FAQ

What were KOSS net sales and growth for the quarter ended September 30, 2025?

KOSS reported net sales of $4,070,778, a 27.1% increase versus the same quarter last year.

Did KOSS report profit or loss for Q1 FY2026 and what was EPS (KOSS)?

KOSS reported net income of $243,729 and EPS of $0.03 basic and diluted for the quarter.

How did KOSS gross margin change in Q1 FY2026 (KOSS)?

Gross margin improved by 340 basis points to 40.0% versus the prior-year quarter.

What drove KOSS's sales increase in Q1 FY2026 (KOSS)?

A considerable sale to its largest Education customer and DTC sales growth of 22.5% were cited as primary drivers.

What tariff risk did KOSS disclose in its October 30, 2025 release (KOSS)?

The company noted an adverse margin impact from products subject to a 145% tariff on China-produced goods and said it is monitoring the tariff landscape.

Did KOSS change management in the October 30, 2025 announcement (KOSS)?

Yes, Michael J. Koss, Jr. was promoted to Executive Vice President with added oversight of sourcing and logistics.