Hour Loop(HOUR) - 2025 Q1 - Quarterly Results

Q1 2025 Earnings Release Hour Loop announced its Q1 2025 results, showing revenue growth but a decline in profitability and cash from operations Financial and Operational Highlights Hour Loop's Q1 2025 net revenues grew 4.7% to $25.8 million, but net income fell to $0.7 million, and operating cash flow turned negative Q1 2025 Key Financial Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $25.8 million | $24.7 million | +4.7% | | Net Income | $0.7 million | $1.1 million | -36.4% | | Cash from Operating Activities | ($0.02 million) | $0.5 million | Negative Swing | Management Commentary Management noted revenue growth despite economic challenges, with gross margin impacted by competition and operating expenses rising due to talent retention efforts - Revenue grew 4.7% despite a cautious consumer outlook and rising tariffs and fees from the marketplace[2] - Gross margin was negatively affected by a challenging e-commerce environment and intense industry competition[2] - Operating expenses increased primarily due to amending the profit-sharing frequency to quarterly for talent retention purposes[2] - The company is cautiously optimistic, citing strong product demand continuing into 2025 despite economic uncertainty[2] Detailed Financial Results Q1 2025 saw net revenue growth to $25.8 million, but gross profit percentage declined, leading to a net income decrease to $0.7 million Revenue and Gross Profit Net revenues grew 4.7% to $25.8 million, but gross profit percentage declined to 54.7% due to competition and higher costs Q1 Revenue and Gross Profit (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenues | $25.8 million | $24.7 million | | Gross Profit % | 54.7% | 58.6% | Operating Expenses and Net Income Operating expenses as a percentage of revenue improved, yet net income decreased to $0.7 million ($0.02 per diluted share) due to higher overall costs Q1 Profitability Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Expenses (% of Revenue) | 51.2% | 52.3% | | Net Income | $0.7 million | $1.1 million | | Diluted EPS | $0.02 | $0.03 | Balance Sheet and Cash Position Cash and cash equivalents decreased to $1.3 million by March 31, 2025, while inventories strategically increased to $15.9 million Key Balance Sheet Items (QoQ) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1.3 million | $2.1 million | | Inventories | $15.9 million | $14.6 million | Full Year 2025 Financial Outlook Hour Loop will not provide full-year 2025 financial guidance due to ongoing economic uncertainty and current tariff conditions - The company is not able to provide forward-looking guidance for the full year 2025 due to ongoing economic uncertainty, primarily influenced by current tariff conditions[8] About Hour Loop, Inc. Hour Loop is a US e-commerce retailer primarily operating as a third-party seller on Amazon, managing over 100,000 SKUs with plans for rapid expansion - Operates as an online retailer, primarily as a third-party seller on www.amazon.com, which generates practically all its revenue[9] - Manages over 100,000 SKUs in categories including home/garden, toys, kitchenware, apparel, and electronics[9] - Future plans involve rapid business expansion by increasing the number of business managers, vendors, and SKUs[9] Consolidated Financial Statements (Unaudited) This section presents Hour Loop's unaudited consolidated balance sheets, statements of operations, and cash flows for the relevant periods Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $19.1 million, total liabilities decreased to $13.3 million, and stockholders' equity increased to $5.8 million Balance Sheet Summary (as of March 31, 2025 vs. Dec 31, 2024) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $1,260,122 | $2,119,581 | | Inventory, net | $15,889,482 | $14,640,632 | | Total Assets | $19,077,473 | $19,966,964 | | Total Liabilities | $13,261,750 | $14,807,222 | | Total Stockholders' Equity | $5,815,723 | $5,159,742 | Consolidated Statements of Operations Q1 2025 net revenues increased to $25.8 million, but gross profit and income from operations declined, resulting in net income of $654,517 Statement of Operations Summary (Three Months Ended March 31) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Revenues, net | $25,837,090 | $24,681,122 | | Gross Profit | $14,145,298 | $14,452,206 | | Income from Operations | $920,865 | $1,538,172 | | Net Income | $654,517 | $1,065,814 | | Basic and Diluted EPS | $0.02 | $0.03 | Consolidated Statements of Cash Flows For Q1 2025, operating activities used $23,891 in cash, a reversal from the prior year, leading to a net cash decrease of $859,459 and an ending balance of $1.26 million Cash Flow Summary (Three Months Ended March 31) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($23,891) | $492,943 | | Net cash used in investing activities | ($720) | ($17,798) | | Net cash used in financing activities | ($839,000) | $0 | | Net change in cash | ($859,459) | $437,927 | | Cash at end of period | $1,260,122 | $2,922,080 |