Aterian, Inc. reported a net revenue of $15.4 million for the first quarter of 2025, a decrease of 24% compared to $20.2 million in the same period of the previous year. The decline in revenue was primarily attributed to a reduction in direct sales, which fell by 25.5% due to a strategic SKU rationalization and changes in Amazon's marketing affiliate program that negatively impacted traffic and conversions. The company's gross profit also decreased, dropping to $9.4 million from $13.2 million, resulting in a gross margin of 61.4%, down from 65.1% in the prior year.
Operating expenses for Aterian decreased significantly to $13.1 million from $18.4 million, reflecting a 28.9% reduction. This was driven by lower sales and distribution expenses, which fell to $9.7 million from $13.2 million, and a decrease in general and administrative expenses from $5.2 million to $3.5 million. The company reported an operating loss of $3.7 million, an improvement from the $5.3 million loss recorded in the same quarter of 2024. The net loss for the quarter was $3.9 million, compared to a net loss of $5.2 million in the prior year.
In terms of operational developments, Aterian's total assets increased slightly to $49.8 million as of March 31, 2025, from $49.5 million at the end of 2024. The company maintained a cash balance of $14.3 million, down from $18 million at the end of the previous fiscal year. Aterian's workforce reduction plan, announced on May 14, 2025, is expected to affect approximately 20 employees and generate annualized savings of $5 to $6 million. The company anticipates recognizing restructuring charges of approximately $2.3 million related to this plan.
Looking ahead, Aterian faces challenges due to macroeconomic factors, including inflation and reduced consumer spending, which have impacted its financial performance. The company is also navigating the implications of new U.S. tariffs on imports from China, which could further increase costs and pressure margins. Aterian has expressed its commitment to pursuing mitigation strategies, including supplier negotiations and potential geographic diversification of sourcing. However, uncertainties regarding the effectiveness of these strategies remain, raising concerns about the company's ability to maintain compliance with financial covenants under its credit agreements.
About Aterian, Inc.
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