Aterian(US:ATER)2025-05-14 20:10Financial Performance - Net revenue for Q1 2025 was $15.4 million, down 23.5% from $20.2 million in Q1 2024, primarily due to SKU rationalization and changes in Amazon's affiliate program[3] - Gross margin decreased to 61.4% in Q1 2025 from 65.1% in Q1 2024, attributed to a change in product mix[3] - Operating loss narrowed to $(3.7) million in Q1 2025 from $(5.3) million in Q1 2024, with non-cash stock compensation impacting both periods[3] - Net loss improved to $(3.9) million in Q1 2025 compared to $(5.2) million in Q1 2024, reflecting a gain on fair value of warrant liability[3] - Contribution margin for Q1 2024 was $2,848 thousand, representing 14.1% of net revenue, while for Q1 2025, it was $2,051 thousand, or 13.4% of net revenue[33] - Adjusted EBITDA for Q1 2024 was $(2,625) thousand, compared to $(2,505) thousand for Q1 2025, with Adjusted EBITDA as a percentage of net revenue at (13.0)% and (16.3)% respectively[34] - Gross profit for Q1 2024 was $13,168 thousand, while for Q1 2025, it decreased to $9,424 thousand[33] Cash and Liquidity - Total cash balance decreased to $14.3 million as of March 31, 2025, down from $18.0 million at the end of 2024[3] - Cash used in operating activities for Q1 2024 was $(6) thousand, significantly improved from $(3,868) thousand in Q1 2025[21] - Total cash and restricted cash at the end of Q1 2024 was $19,706 thousand, down from $15,838 thousand at the end of Q1 2025[21] - The company reported a foreign currency effect on cash and restricted cash of $(49) thousand in Q1 2024, compared to $123 thousand in Q1 2025[21] Cost Management and Strategy - The company is implementing a cost optimization plan expected to generate annual savings of $5-$6 million, with $5 million anticipated by the end of 2025[6] - The company is strategically raising prices across its product portfolio to mitigate the impact of tariffs and maintain revenue levels[4] Manufacturing and Product Strategy - Aterian aims to manufacture no more than 30% of goods from China by the end of 2025, accelerating efforts to diversify manufacturing locations[9] - The company has paused new product launches from Asia, specifically hard electronic goods, while focusing on tariff-exempt US-sourced consumable products[9] - Aterian has withdrawn its previously issued net revenue and Adjusted EBITDA guidance for 2025 due to significant economic uncertainty[7] - The company aims for a positive 15% net margin for most products within approximately three months of launch[36] Expenses - Sales and distribution expenses for Q1 2024 totaled $13,214 thousand, compared to $9,661 thousand in Q1 2025[38] - Inventory provisions changed by $(976) thousand in Q1 2024, while in Q1 2025, it changed by $86 thousand[21]