Hydrofarm 2025 Q3 Earnings Widening Losses as Net Income Drops to -$16.39M

Hydrofarm reported Q3 2025 results that significantly missed estimates, with revenue plunging 33.3% to $29.35 million and a net loss widening to $16.39 million. The company reaffirmed its full-year adjusted gross profit margin target of ~20% but provided no new guidance on revenue or earnings, leaving investors with uncertainty.

Revenue

Hydrofarm’s Q3 revenue fell sharply by 33.3% year-over-year to $29.35 million, missing consensus estimates by $6.38 million. The decline was attributed to a 32.2% reduction in volume/mix driven by industry oversupply and lower production volumes.

Earnings/Net Income

The company’s losses deepened to $3.51 per share in Q3 2025, a 22.7% wider loss compared to 2024. Net income dropped to -$16.39 million, a 24.7% increase in the deficit. The EPS performance reflects deteriorating profitability amid lower sales and production inefficiencies. This represents a significant deterioration in earnings quality.

Post-Earnings Price Action Review

Hydrofarm’s stock price experienced a sharp decline following the earnings release, tumbling 14.29% in a single trading day and 25.00% over the subsequent full week. Month-to-date, the stock has plummeted 42.05%, exacerbating its year-to-date underperformance. Analysts attribute the selloff to the company’s inability to meet revenue expectations and broader market skepticism about its operational turnaround. The stock’s volatility highlights investor concerns over management’s ability to execute cost-saving initiatives and navigate industry challenges.

Additional News

1. Leadership Transition: Bill Toler, former CEO and Executive Chairman, is resuming the CEO role effective December 1, 2025, signaling a strategic shift in leadership to drive operational improvements.

2. Cost-Cutting Measures: Hydrofarm announced the consolidation of two U.S. manufacturing facilities, expected to generate $2 million in annual savings. Additional cost-saving initiatives are underway, targeting $4 million in further reductions.

3. Industry Challenges: The company cited ongoing industry oversupply and regulatory delays in cannabis rescheduling as key headwinds. These factors have dampened demand for Hydrofarm’s products, particularly in the agricultural and cannabis sectors.