Aterian, Inc.

Q3 2025 net revenue was $19 million, down 27.5% from $26.2 million in Q3 2024 and down 2% from the prior quarter. Gross margin was 56.1% versus 60.3% a year ago, and contribution margin was 15.5% versus 17% in Q3 2024; management said it improved by over 700 basis points from Q2 2025. Operating loss was $2 million versus a $1.7 million loss last year, net loss was $2.3 million versus $1.8 million, and adjusted EBITDA loss was just over $400,000 versus a $500,000 gain last year. On the balance sheet, cash was approximately $7.6 million at 9/30/2025 versus $18 million at 12/31/2024, borrowings were $6.2 million versus $6.9 million, and inventory was $17.2 million versus $13.7 million. Forward guidance was maintained for the six months ended 12/31/2025: net revenue of $36 million to $38 million and adjusted EBITDA of breakeven to a loss of $1 million.

Arturo Rodriguez framed the quarter as evidence that the business is stabilizing after a difficult tariff-driven reset. He said pricing actions, cost reductions, and marketing discipline have “paid off,” but emphasized that top-line growth remains the biggest challenge. His tone was constructive but cautious, with a clear emphasis on 2026 as the year for renewed growth, more channel expansion, and a broader consumables push.

Joshua Feldman highlighted the sequential operating improvement: revenue was broadly stable versus Q2, contribution margin rose from 7.8% to over 15%, and adjusted EBITDA loss narrowed to just over $400,000 from $2.2 million. He detailed the year-over-year pressure on sales and margins, including lower demand, tariff-related pricing actions, 56.1% gross margin, and a $400,000 product remediation charge. He also pointed to liquidity of $7.6 million in cash, $6.2 million of credit facility borrowings, and said inventory should come down over the next six to nine months, creating a 2026 working-capital benefit; management said it does not expect to need additional equity capital for day-to-day operations for the foreseeable future.

Analysts asked about the mix of revenue across Amazon versus new channels, early performance at Home Depot, Best Buy, and other retailers, the pace of launch revenue growth, and how quickly sourcing can be shifted outside China. Management said Amazon was still over 95% of Q3 revenue, while the newer channels are largely in setup or test mode and are intended to matter more in 2026. They also said launch revenue is muted because the new wipes product is sold wholesale to Amazon, marketing was intentionally held back, and sourcing flexibility depends on the specific product and manufacturer, with beverage refrigerators and dehumidifiers cited as examples. In the perks questions, management said big-box retail and club stores remain a long-term opportunity, UK expansion is progressing, the share repurchase program remains suspended, and executive share sales were primarily to cover tax liabilities on vested RSUs.