Koss 2025 Q4 Earnings Deepening Losses Despite Revenue Growth

Koss reported mixed results in its 2025 Q4 earnings, with revenue rising 6.6% to $3.08 million compared to $2.89 million in the same period the previous year. However, the company’s net loss expanded significantly, reaching $-232,696, or $0.02 per share, a 106.7% increase from the $-110,369 loss of $0.01 per share in 2024 Q4. The earnings fall short of the broader market’s performance and reflect ongoing operational challenges.

Revenue
Koss’s total revenue for the quarter rose by 6.6% year-over-year to $3.08 million. The growth was driven by a 49% surge in export sales, particularly to Europe, and a 18% rise in DTC sales due to new product launches and improved advertising. However, domestic distributor orders and e-tailer sales showed weaker performance, partially offsetting the gains.

Earnings/Net Income
The company’s financial performance deteriorated significantly, with a net loss widening to $-232,696, representing a 110.8% increase from the $-110,369 loss in the prior year’s quarter. Per-share losses also doubled to $0.02 from $0.01. The earnings reflect deepening operational inefficiencies and margin pressures despite the revenue increase.

Price Action
KOSS’s stock price declined 2.82% during the latest trading day, continued a 4.32% drop in the most recent trading week, and posted a 15.89% gain for the month. The stock remains highly volatile, with mixed short-term performance.

Post-Earnings Price Action Review
The post-earnings strategy of buying KOSS shares after its quarterly revenue decline on the report release date and holding for 30 days has been ineffective. Over the past three years, it yielded a 9.62% return, far underperforming the 59.26% benchmark. The Sharpe ratio of 0.03 indicates poor risk-adjusted returns, while the high volatility of 120.48% highlights the strategy’s high-risk nature. The reported 0% maximum drawdown is likely an anomaly or misinterpretation, suggesting the strategy avoided further losses during the backtest.

CEO Commentary
Chairman & CEO Michael J. Koss highlighted the 6.6% revenue growth in Q4, driven by export and DTC sales. He acknowledged near-term margin pressures from new U.S. tariffs on Chinese imports but expressed confidence in freight cost stabilization with a dedicated partner in the upcoming quarter. For the full fiscal year, the company attributed growth to expansion into European and Asian markets, a 16.5% increase in DTC sales, and improved gross margins from new products.

Guidance
The company did not provide specific quantitative guidance for future revenue, expenses, or earnings.

Additional News
Despite the company’s efforts to highlight revenue growth and market expansion, the recent earnings report failed to inspire investor confidence. Additional news from the period included the following:

1. China’s Economic Expansion: China’s continued economic expansion fueled international demand for consumer electronics, particularly in export markets. This trend supported Koss’s 49% rise in European exports during Q4.
2. U.S. Tariff Adjustments: New U.S. tariffs on Chinese goods are expected to create margin pressures for companies like Koss, which rely heavily on imports. The company acknowledged these challenges but remains optimistic about cost stabilization efforts with a dedicated freight partner.
3. Tech Industry Volatility: The broader tech and consumer electronics sector experienced heightened volatility in late 2025, driven by shifting consumer demand and regulatory uncertainty. Koss’s stock mirrored this trend, with short-term price swings reflecting market sentiment.