Aterian Reports 2025 First Quarter Financial Results

Core Insights - Aterian, Inc. announced a cost optimization plan aimed at reducing annual spending by approximately $5 - $6 million, alongside updates on tariff mitigation strategies [1][7]. Financial Performance - For Q1 2025, net revenue was reported at $15.4 million, down from $20.2 million in Q1 2024, primarily due to SKU rationalization and changes in Amazon's affiliate program [5]. - Gross margin decreased to 61.4% from 65.1%, while contribution margin fell to 13.4% from 14.1% [5][34]. - Operating loss improved to $(3.7) million from $(5.3) million, and net loss narrowed to $(3.9) million from $(5.2) million [5][37]. - Total cash balance decreased to $14.3 million from $18.0 million at the end of 2024 [5]. Tariff Mitigation Initiatives - The company is focusing on reducing fixed costs, diversifying manufacturing, and strategically raising prices to mitigate tariff impacts [3][6]. - A new goal has been established to manufacture no more than 30% of goods from China by the end of 2025, an improvement from the previous target of less than 40% by the second half of 2026 [6]. Cost Optimization Plan - The cost optimization plan is expected to generate $5 - $6 million in pre-tax savings, with $5 million anticipated by the end of 2025 [7]. - The company estimates incurring approximately $2.3 million in costs associated with the implementation of this plan [7]. Guidance Commentary - Due to significant uncertainty in the economic landscape, the company has withdrawn its previously issued net revenue and Adjusted EBITDA guidance for 2025 [8].