Aterian's 2025 Q2 Earnings Call: Unpacking Contradictions in Pricing, Sourcing, and Marketing Strategies

Price strategy and consumer reaction, focus on U.S. sourced consumables, tariff strategy and manufacturing diversification, inventory management and platform expansion, changes in marketing strategy and efficiency are the key contradictions discussed in Aterian, Inc.'s latest 2025Q2 earnings call.



Impact of Tariffs and Trade Policy:
- Aterian, Inc. reported net revenue of $19.5 million in Q2 2025, representing a decline of 30.5% from the previous year.
- This decrease was primarily driven by strategic price increases to offset tariff costs, a delayed start to the summer season, and general softness in consumer spending, exacerbated by uncertainty surrounding tariffs and trade policy.

Fixed Cost Reduction and AI Application:
- Aterian implemented a fixed cost reduction plan, targeting annualized savings of $5 million to $6 million.
- The company has secured approximately $5.5 million in savings, with $3.8 million from headcount reductions and is actively leveraging AI to enhance productivity and service quality.

Resourcing and Sourcing Strategy:
- Aterian shifted approximately 65% of its dehumidifier production from China to Indonesia in 2025, down from 100% in 2024.
- This strategic shift aims to reduce tariff exposure, although opportunities to source outside China remain limited due to current tariff rates.

New Product Launches and Focus on Consumables:
- The launch revenue for Q2 2025 was $0.3 million, compared to $0.5 million in Q2 2024.
- The company is focusing on new product launches in low tariff regions, particularly consumables like the Squatty Potty flushable wipes, aiming for higher contribution margins and reduced volatility.