Koss Corporation Reports Second Quarter Results
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
Key Figures
Market Reality Check
Peers on Argus
KOSS was down 0.91% while key peer VUZI appeared in momentum scans up 4.54%, indicating stock-specific dynamics rather than a broad consumer electronics move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Oct 30 | Q1 earnings | Positive | -2.0% | Return to profitability with strong sales growth and higher gross margins. |
| May 08 | Q3 earnings | Neutral | +3.6% | Moderate sales growth but ongoing net loss and tariff concerns. |
| Jan 30 | Q2 earnings | Positive | -3.1% | Improved sales, return to profit, and higher gross margins in Q2 FY2025. |
| Oct 31 | Q1 earnings | Negative | -1.4% | Sales decline and wider loss despite some gross margin improvement. |
| May 09 | Q3 earnings | Negative | -10.4% | Sales decline, weaker DTC and European distributor volumes, margin pressure. |
Earnings releases often produced muted-to-negative reactions, including sell-offs after objectively stronger quarters.
Over the last several earnings reports, Koss has alternated between modest profitability and net losses, with recurring themes of tariff pressure, shifting demand across Education, European and DTC channels, and evolving gross margins. Positive reports such as Q1 FY2025 (return to profit and 40.0% gross margin) still saw negative price reactions. Today’s Q2 FY2026 update, with lower quarterly sales and margin compression, fits into this pattern of operational volatility and cautious market interpretation.
Historical Comparison
Past KOSS earnings moved the stock by an average of 4.11%, with frequent negative reactions even to improved margins or profits.
Earnings history shows swings between profit and loss, improving margins offset by tariffs and channel mix shifts, and a growing DTC contribution.
Market Pulse Summary
This announcement highlighted a weak Q2 with net sales of $2.86M and a $565,407 loss, but slightly higher six‑month sales of $6.93M. Gross margin compression to 35.5% and peak 145% China tariffs weighed on profitability, partly offset by DTC growth and Education strength. Historically, earnings have produced notable moves, so investors often focus on margin trends, tariff exposure, and DTC mix when interpreting subsequent updates.
Key Terms
direct-to-consumer (dtc) financial
basis points financial
gross margins financial
tariffs regulatory
AI-generated analysis. Not financial advice.
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
For the six months ended December 31, 2025, net sales of
“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
Koss stated, “Gross margins fell by 260 basis points, from
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
Why did KOSS (NASDAQ: KOSS) report a net loss in Q2 2026?
How much did KOSS Q2 2026 net sales fall year-over-year?
What drove the gross margin decline for KOSS in the first six months of fiscal 2026?
How significant is DTC growth for KOSS and what is its share of sales?
Did KOSS show any sales improvement year-to-date through December 31, 2025?
