Aterian, Inc. reported a significant decline in its financial performance for the fiscal year ending December 31, 2025, with net revenue falling to $68.975 million, a decrease of 30.4% from $99.045 million in 2024. The company attributed this decline primarily to a drop in direct sales, which decreased by 32.4% due to newly implemented tariffs that increased the cost of goods sold, prompting price hikes that negatively impacted consumer demand. The cost of goods sold also decreased to $29.825 million, down 20.6% from the previous year, reflecting reduced sales volume.
The company's operating loss widened to $17.973 million in 2025, compared to a loss of $11.823 million in 2024, marking a 52% increase in losses. Total operating expenses decreased by 22% to $57.123 million, driven by reductions in sales and distribution expenses and general administrative costs. However, the company recorded a non-cash impairment charge of approximately $3.822 million related to its intangible assets, which contributed to the overall net loss of $18.984 million, a 60% increase from the prior year's loss of $11.862 million.
In terms of strategic developments, Aterian announced on December 8, 2025, that its Board of Directors had authorized a process to explore strategic alternatives aimed at maximizing shareholder value, which may include a sale of the company or a merger. The company has also undergone significant organizational changes, including a workforce reduction affecting approximately 20 employees in May 2025 and an additional reduction of 16 employees in January 2026 as part of a fixed cost reduction plan.
Operationally, Aterian's reliance on the Amazon marketplace remains substantial, with approximately 86% of its revenue generated through this platform in 2025, down from 92% in 2024. The company has also faced challenges related to product recalls, including a voluntary recall of approximately 195,000 units of its PurSteam products due to safety concerns, which has led to ongoing legal proceedings. Looking ahead, Aterian's management expressed uncertainty regarding its ability to achieve profitability and maintain compliance with financial covenants under its credit facility, raising concerns about its ability to continue as a going concern. The company plans to focus on a more limited number of products and continue exploring additional sources of capital to support its operations.
About Aterian, Inc.
Aterian, Inc. is a technology-enabled consumer products company selling a diverse range of home and kitchen appliances, air quality devices, health and beauty products, and essential oils. Operating primarily through online retail channels like Amazon, Walmart, and its own websites, Aterian markets products under owned brands such as Squatty Potty and HomeLabs. The company leverages e-commerce platforms and third-party manufacturing, focusing on efficient supply chain management and digital marketing to reach individual consumers in the U.S. market.
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