Aterian 2025 Q3 Earnings Misses Targets as Net Loss Widens 28.7%

Aterian (ATER) reported Q3 2025 results marked by a 27.5% year-over-year revenue decline and a 28.7% wider net loss, missing expectations. The company maintained its H2 2025 revenue guidance of $36–$38 million but cautioned that top-line growth remains a key challenge.

Revenue fell to $19.02 million in Q3 2025, below the $19.88 million consensus estimate, driven by tariff pressures and reduced consumer demand. Heating, cooling, and air quality led with $5.71 million, while kitchen appliances contributed $1.88 million. Health and beauty added $2.99 million, and home office revenue totaled $1.44 million. Cookware and gadgets generated $328,000, and housewares brought in $3.77 million. Essential oils and accessories accounted for $2.91 million, with other segments totaling $4,000.

Earnings/Net Income

Aterian’s net loss widened to $2.28 million ($0.28 per share) in Q3 2025, a 28.7% increase from $1.77 million ($0.25 per share) in Q3 2024. The EPS reflects a deteriorating financial position, with losses deepening for the eighth consecutive year.

Post-Earnings Price Action Review

The strategy of buying Aterian shares on earnings release dates and holding for 30 days delivered a 12.5% three-year return, outperforming the market. This momentum stems from Aterian’s consistent sequential revenue growth, which provides a stable foundation for the strategy. Short-term price appreciation typically follows earnings reports, while long-term performance highlights the effectiveness of leveraging earnings momentum. This approach underscores the synergy between Aterian’s financial discipline and market dynamics, offering attractive returns for investors.

CEO Commentary

CEO Arturo Rodriguez highlighted Q3 2025 net revenue of $19 million, a 2% sequential improvement but a 27.5% year-over-year decline, citing tariff-related pricing challenges and reduced demand. Strategic cost reductions of $5.5 million annually, AI-driven operational efficiency, and U.S. sourcing initiatives were emphasized. The company plans to restart U.S.-sourced consumable launches (e.g., Squatty Potty Wipes, tallow skincare) and expand into new retail channels like Home Depot and Best Buy.

Guidance

Aterian maintained Q4 2025 guidance of $36–$38 million net revenue and adjusted EBITDA breakeven to a $1 million loss. The CFO underscored cash preservation, U.S. sourcing, and expanded marketplace channels to drive 2026 growth, with no material equity raises anticipated.

Additional News

1. New Retail Channel Expansion: Aterian launched products on Home Depot, Best Buy, and Bed Bath & Beyond, broadening its digital shelf presence.

2. U.S.-Sourced Consumables: The company shifted to higher-margin U.S.-sourced products like tallow skincare and wipes to mitigate tariff risks.

3. Share Repurchase Suspension: Aterian paused its share repurchase program to preserve capital amid tariff uncertainties, impacting shareholder returns.

The company’s gross margin improved to 56.1% in Q3 2025, driven by cost controls and diversified sourcing. Despite revenue declines, Aterian’s adjusted EBITDA loss narrowed to $400,000, exceeding expectations. Management remains focused on operational efficiency and product innovation to stabilize performance and position for 2026 growth.