Aterian Reports 30.5% Revenue Decline in Q2 2025, Net Loss of $8.8 Million

Aterian, Inc. reported a significant decline in financial performance for the second quarter of 2025, with net revenue falling to $19.5 million, a decrease of 30.5% from $28.0 million in the same period last year. The company's gross profit also dropped to $10.6 million, down 37.4% year-over-year, resulting in a gross margin of 54.3%. The decline in revenue was primarily attributed to a decrease in direct sales, which fell by 35.9% due to increased tariffs that raised costs and led to higher retail prices, subsequently reducing consumer demand.

In the first half of 2025, Aterian's net revenue totaled $34.8 million, down 27.8% from $48.2 million in the prior year. The company reported a net loss of $8.8 million for the six months ended June 30, 2025, slightly improved from a loss of $8.8 million in the same period of 2024. The operating loss for the second quarter was $4.5 million, compared to a loss of $3.2 million in the previous year. The company attributed these losses to a combination of reduced sales volumes, increased costs from tariffs, and a challenging macroeconomic environment.

Operationally, Aterian has been focusing on cost reduction strategies, including a workforce reduction affecting approximately 20 employees, which is expected to yield annualized savings of $5 to $6 million. The company recognized restructuring charges of approximately $1.8 million in connection with this plan. Additionally, Aterian's inventory increased to $18.5 million as of June 30, 2025, compared to $13.7 million at the end of 2024, reflecting a strategic decision to stock up on certain products in anticipation of higher tariffs.

Looking ahead, Aterian is navigating a complex landscape marked by increased tariffs on imports from China, which have significantly impacted its cost structure. The company is actively pursuing mitigation strategies, including supplier negotiations and potential geographic diversification of sourcing. However, uncertainties regarding the effectiveness of these strategies and the overall economic environment raise concerns about Aterian's ability to maintain compliance with financial covenants under its credit agreements. As of June 30, 2025, Aterian had $10.5 million in unrestricted cash and an accumulated deficit of $720.4 million, indicating ongoing challenges in achieving sustainable profitability.