Aterian(ATER) - 2024 Q3 - Quarterly Results

Financial Performance - Third quarter 2024 net revenue declined 34.0% to $26.2 million, down from $39.7 million in the same quarter of 2023[2] - Adjusted EBITDA for Q3 2024 was $0.5 million, a significant improvement of 111.0% from a loss of $4.4 million in Q3 2023[2] - Net loss for Q3 2024 was $1.8 million, an improvement of 71.7% from a loss of $6.3 million in Q3 2023[2] - Operating loss for Q3 2024 was $1.7 million, improving 73.4% from a loss of $6.5 million in Q3 2023[2] - Net loss for the nine months ended September 30, 2023, was $66,857 thousand, compared to a net loss of $10,564 thousand for the same period in 2024[12] - The net loss as a percentage of net revenue decreased from (60.9)% in the nine months ended September 30, 2023, to (14.2)% in the same period in 2024[23] Revenue and Profitability - Contribution margin for the three months ended September 30, 2023, was $1,204 thousand, representing 3.0% of net revenue, compared to $4,464 thousand or 17.0% for the same period in 2024[22] - Contribution margin as a percentage of net revenue for the nine months ended September 30, 2023, was 1.8%, compared to 16.4% for the same period in 2024[22] - Gross profit for the nine months ended September 30, 2023, was $53,575 thousand, while for the same period in 2024, it was $45,888 thousand[22] - For the three months ended September 30, 2023, the gross profit was $19,583 thousand, while for the same period in 2024, it increased to $15,828 thousand[26][27] Cash Flow and Assets - Total cash balance as of September 30, 2024, was $16.1 million[2] - Cash used in operating activities for the nine months ended September 30, 2023, was $(8,458) thousand, compared to cash provided of $2,174 thousand for the same period in 2024[12] - Total cash and restricted cash at the end of the year was $30,501 thousand, compared to $18,719 thousand at the end of the previous year[12] - Cash paid for interest during the nine months ended September 30, 2023, was $1,457 thousand, compared to $966 thousand for the same period in 2024[12] - Aterian's total assets decreased from $61.9 million at the end of 2023 to $52.1 million by September 30, 2024[10] - Stockholders' equity declined from $36.0 million at the end of 2023 to $30.6 million by September 30, 2024[10] Future Projections - For Q4 2024, management projects net revenue between $22.5 million and $25.5 million, with adjusted EBITDA expected to be approximately break-even[3] - The company aims for a positive 15% net margin for most products within approximately three months of launch[24] Operational Focus - The company is focused on expanding its e-commerce brands across major online marketplaces, including Amazon and Walmart[6] - The company is focusing on leveraging technology to identify opportunities and improve product margins during the launch phase[23] - The net margin during the launch phase can be as low as approximately negative 35% due to discounts and marketing investments[23] Impairment and Inventory - Impairment loss on intangibles for the nine months ended September 30, 2023, was $39,445 thousand, with no such loss reported for the same period in 2024[12] - The company reported a change in inventory provisions of $213 thousand for the nine months ended September 30, 2023, while it was $(1,653) thousand for the same period in 2024[12] - Borrowings from MidCap credit facilities amounted to $63,978 thousand for the nine months ended September 30, 2023, compared to $44,386 thousand for the same period in 2024[12]