Nature's Miracle Reports 49.8% Revenue Decline and $2 Million Net Loss in Q1 2025

Nature's Miracle Holding Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues dropping 49.8% to $1.1 million compared to $2.2 million in the same period last year. The decrease in revenue was attributed to cash constraints that limited inventory purchases, resulting in the company primarily selling existing inventory. The number of customers also fell from 64 to 47, leading to a reduction in average revenue per customer from $34,449 to $23,549. The company's gross profit was $175,300, reflecting a gross margin increase to 15.8% from 14.2%, driven by higher sales of new, higher-margin products.

Operating expenses for the quarter increased slightly by 1.6% to $1.3 million, primarily due to higher professional fees related to listing and SEC filing activities, which offset a decrease in stock compensation expenses. The company reported a net loss of $2.0 million, a slight improvement from the $2.3 million loss in the prior year, mainly due to a reduction in non-cash finance expenses. Interest expenses surged to $897,017, up from $302,389, as the company faced higher borrowing costs from multiple convertible notes and high-interest loans.

In terms of operational developments, Nature's Miracle has been focusing on expanding its product offerings and enhancing its brand. The company has entered into strategic agreements to source grow light systems and is developing proprietary automated indoor growing systems. Additionally, the company is exploring joint ventures in other industry verticals to utilize excess space for vertical farming. Despite these efforts, the company continues to face challenges, including a working capital deficit of approximately $15.9 million as of March 31, 2025.

The company’s liquidity remains a concern, with only $17,652 in cash at the end of the quarter. Nature's Miracle has been financing its operations through debt and is actively seeking additional funding sources to support its expansion plans. The management has expressed substantial doubt about the company's ability to continue as a going concern within the next year, emphasizing the need for successful revenue generation to support its cost structure.

Looking ahead, Nature's Miracle plans to increase investments in product and brand development, pursue acquisitions, and enhance its manufacturing relationships. The company is also evaluating the potential impact of recent accounting standards on its financial disclosures. As it navigates these challenges, the management remains focused on achieving a level of revenues adequate to support its operations and mitigate ongoing financial pressures.