Koss Corporation Reports Second Quarter Results

Koss Corporation (NASDAQ: KOSS) reported results for the quarter ended December 31, 2025.

Rhea-AI Summary

Koss Corporation (NASDAQ: KOSS) reported results for the quarter ended December 31, 2025. Q2 net sales were $2,861,379, down 19.6% year-over-year, and the company posted a net loss of $565,407 versus prior-year net income of $94,142. Gross margin for the first six months fell 260 basis points to 35.5%.

The company said its DTC channel now represents about 25% of sales and grew 13% year-over-year, while six-month sales were up 2.6% to $6,932,157.

Positive

• Direct-to-consumer (DTC) sales now ~25% of total and grew 13% YoY
• Six-month net sales increased by 2.6% to $6,932,157

Negative

• Quarterly net sales declined 19.6% to $2.86M
• Q2 swung to a net loss of $565,407 from prior-year net income
• Gross margin compressed by 260 basis points to 35.5% for six months

Argus Jan 30 session

-3.56% close to close Open Argus

Details

News Market Reaction – KOSS

On Jan 30, the first trading day after this news, KOSS closed 3.56% below the previous close.

Data tracked by StockTitan Argus for the Jan 30 session.

Key Figures

Q2 net sales: $2,861,379 Q2 prior-year sales: $3,557,086 Q2 net loss: $565,407 +5 more

Q2 net sales

$2,861,379

Quarter ended Dec 31, 2025

Q2 prior-year sales

$3,557,086

Quarter ended Dec 31, 2024

Q2 net loss

$565,407

Three months ended Dec 31, 2025

Q2 EPS

($0.06)

Basic and diluted, Q2 FY2026

Six-month net sales

$6,932,157

Six months ended Dec 31, 2025

Six-month net loss

$321,678

First six months FY2026

Gross margin FY2026 YTD

35.5%

First six months FY2026

Tariff rate

145%

Peak rate on China-produced goods

Previous Earnings Reports

5 past events · Latest: Oct 30

Same Type 5 events

1. Oct 30

   Q1 earnings

   24h Move

   -2.0%

   Return to profitability with strong sales growth and higher gross margins.

2. May 08

   Q3 earnings

   24h Move

   +3.6%

   Moderate sales growth but ongoing net loss and tariff concerns.

3. Jan 30

   Q2 earnings

   24h Move

   -3.1%

   Improved sales, return to profit, and higher gross margins in Q2 FY2025.

4. Oct 31

   Q1 earnings

   24h Move

   -1.4%

   Sales decline and wider loss despite some gross margin improvement.

5. May 09

   Q3 earnings

   24h Move

   -10.4%

   Sales decline, weaker DTC and European distributor volumes, margin pressure.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

direct-to-consumer (dtc), basis points, gross margins, tariffs

4 terms

direct-to-consumer (dtc) financial

"The Company’s direct-to-consumer (DTC) business, which now makes up approximately 25%"

A direct-to-consumer (DTC) model is a business approach where a company sells its products or services straight to customers, skipping middlemen such as retail stores or distributors. For investors, DTC matters because it can boost profit margins, give the company direct access to customer data and feedback, and change how fast it can grow or face inventory and marketing costs — think of a farmer selling at a market rather than through a supermarket chain.

basis points financial

"Gross margins fell by 260 basis points, from 38.1% in the first six months"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

gross margins financial

"Gross margins fell by 260 basis points, from 38.1% in the first six months"

Gross margins measure the portion of sales a company keeps after paying the direct costs to make its products or deliver services, expressed as a percentage of revenue. Think of it as the money left from each sale after paying the ingredients — it signals how efficiently a business produces and prices goods, and matters to investors because higher margins generally mean more room to cover other expenses, invest, and generate profit.

tariffs regulatory

"product purchased from China when tariffs were at a peak rate of 145%"

Tariffs are taxes imposed by a government on goods imported from other countries. They increase the cost of those goods, which can lead to higher prices for consumers and impact international trade. For investors, tariffs matter because they can influence the profitability of companies, affect supply chains, and shift economic stability across different regions.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MILWAUKEE, Wis., Jan. 29, 2026 (GLOBE NEWSWIRE) -- Koss Corporation (NASDAQ: KOSS) (the “Company”), the U.S. based high-fidelity headphone company, has reported its results for the second quarter ended December 31, 2025.

Net sales for the second quarter ended December 31, 2025 were $2,861,379, down $695,707, or 19.6%, from $3,557,086 for the same quarter in the prior year. The company posted a net loss of $565,407 for the three months ended December 31, 2025 versus net income of $94,142 for the same period of the prior fiscal year. Basic and diluted net loss per common share for the second quarter of fiscal year 2026 was $0.06 compared to basic and diluted net income per common share of $0.01 for the same three-month period one year ago.

For the six months ended December 31, 2025, net sales of $6,932,157 were up $173,203, or 2.6%, over net sales of $6,758,954 for the comparable period in the prior year. The net loss of $321,678 for the first six months of fiscal year 2026 was comparable to the net loss of $325,393 for the first six months of the prior fiscal year. Basic and diluted net loss per common share was $0.03 for each of the six-month periods ended December 31, 2025 and 2024.

“While the Company experienced strong sales gains in the Education market for the first two quarters of fiscal year 2026 compared to the prior year, the growth was mostly offset by the prior year’s sales uplift in our European markets resulting from new product launches that didn’t recur in this fiscal year,” Michael J. Koss, Chairman and CEO, said today. “The Company’s direct-to-consumer (DTC) business, which now makes up approximately 25% of the Company’s total sales, experienced growth of 13% year-over year.”

Koss stated, “Gross margins fell by 260 basis points, from 38.1% in the first six months of fiscal year 2025 to 35.5% for the comparable period in fiscal year 2026. The current year margin degradation was primarily due to the sell-through of product purchased from China when tariffs were at a peak rate of 145%. A favorable customer mix, which included higher volumes of higher margin domestic distributor and DTC sales, offset some of the negative impact of the tariffs.”

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 continued future fluctuations in economic conditions; the Company’s ability to successfully develop new products and assess potential market opportunities; the receptivity of consumers to new consumer electronics technologies; the Company’s ability to successfully and profitably market its products; the rate and consumer acceptance of new product introductions; the amount and nature of competition for the Company’s products; pricing; the number and nature of customers and their product orders; the Company’s ability to meet demand for products; production by third party vendors; foreign manufacturing, sourcing, and sales (including foreign government regulation, trade and importation concerns); uncertainties associated with political developments, international trade disputes and restrictions, natural disasters, public health concerns, and other disruptions, including their possible effects on the Company’s operations and its supply chain; trade tensions between the U.S. and China given recently enacted tariffs and their uncertainty; the impact of the ongoing conflict in Eastern Europe and the instability in the Middle East on the Company’s operations; the effects of any judicial, executive or legislative action affecting the Company or the audio/video industry; borrowing costs; changes in tax rates; the outcome of any litigation, government investigations, enforcement actions or other legal proceedings; the Company’s ability to retain and hire key personnel and other risk factors described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and subsequently filed Quarterly Reports on Form 10-Q. 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								Six Months Ended
	December 31								December 31
	2025				2024				2025				2024
Net sales	$	2,861,379			$	3,557,086			$	6,932,157			$	6,758,954
Cost of goods sold		2,030,573				2,152,129				4,472,659				4,181,071
Gross profit		830,806				1,404,957				2,459,498				2,577,883
Selling, general and administrative expenses		1,845,384				1,546,741				3,520,116				3,356,800
Loss from operations		(1,014,578	)			(141,784	)			(1,060,618	)			(778,917	)
Other income (expense):
Interest income		202,484				238,686				495,612				459,044
Other income		250,000				—				250,000				—
Interest expense		(553	)			—				(1,152	)			—
Total other income, net		451,931				238,686				744,460				459,044
Income (loss) before income tax provision		(562,647	)			96,902				(316,158	)			(319,873	)
Income tax provision		2,760				2,760				5,520				5,520
Net income (loss)	$	(565,407	)		$	94,142			$	(321,678	)		$	(325,393	)
Income (loss) per common share:
Basic	$	(0.06	)		$	0.01			$	(0.03	)		$	(0.03	)
Diluted	$	(0.06	)		$	0.01			$	(0.03	)		$	(0.03	)
Weighted-average number of shares:
Basic		9,462,416				9,355,686				9,459,427				9,332,844
Diluted		9,462,416				9,629,535				9,459,427				9,332,844

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

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

Why did KOSS (NASDAQ: KOSS) report a net loss in Q2 2026?

Koss reported a Q2 2026 net loss of $565,407, reflecting lower sales and margin pressure. According to the company, lower European sales versus a prior-year product launch and tariff-driven cost pressure reduced profitability.

How much did KOSS Q2 2026 net sales fall year-over-year?

Koss Q2 net sales fell 19.6% to $2,861,379 year-over-year. According to the company, the decline reflected weaker repeat European product launches compared with the prior-year quarter.

What drove the gross margin decline for KOSS in the first six months of fiscal 2026?

Gross margins fell 260 basis points to 35.5% for the six months ended December 31, 2025. According to the company, margin pressure came mainly from selling product purchased when China tariffs peaked at 145%.

How significant is DTC growth for KOSS and what is its share of sales?

The company's DTC business grew 13% year-over-year and now represents about 25% of total sales. According to the company, stronger DTC and domestic distributor mix partially offset tariff headwinds.

Did KOSS show any sales improvement year-to-date through December 31, 2025?

Yes, six-month net sales rose 2.6% to $6,932,157 compared with the prior year period. According to the company, education-market gains supported year-to-date growth despite quarterly softness.