Aterian Reports Fourth Quarter & Full Year 2024 Results
Introduces Annual Guidance for 2025Announces $3 Million Share Repurchase Program
SUMMIT, N.J., March 18, 2025 (GLOBE NEWSWIRE) -- Aterian, Inc. (NASDAQ:ATER) ("Aterian" or the "Company"), a technology-enabled consumer products company, today announced financial results for the fourth quarter and full year ended December 31, 2024.
"Aterian's results for 2024 reflect our team's success in executing a strategy to focus, stabilize, and simplify our operations in preparation for a resumption of growth and improved operating performance, " said Arturo Rodriguez, Chief Executive Officer.
"Our decision to rationalize SKUs and focus on the Company's six foundational brands generated material improvements in gross margin and contribution margin, and narrowed our losses significantly compared to 2023," continued Mr. Rodriguez. "We improved our cash flow and working capital profile, reduced debt by more than $4.0 million, and right sized our inventory to focus on Aterian's most profitable products. These initiatives created a momentum that we believe will carry into 2025. Despite tariffs, we are confident that in 2025, especially with our experienced and tenacious team, we will be able to generate higher revenues, achieve greater operating efficiency, and further improve our profit profile. Our growth will be driven by new product introductions beginning in the second quarter of 2025 and access to a broader base of consumers through our sales channel initiatives."
Fourth Quarter 2024 HighlightsAll comparisons are to the fourth quarter ended December 31, 2023
Net revenue was $24.6 million compared to $32.8 million, primarily reflecting the previously announced SKU rationalization designed to focus on the Company's most profitable products, lower liquidation levels of high-cost inventory, and initial contributions from new product introductions.
Gross margin improved to 63.4% from 51.0%, reflecting the success of the above-referenced SKU rationalization and improved inventory profile.
Contribution margin improved to 19.4% from (0.8%).
Operating loss narrowed to ($1.6) million from an operating loss of ($8.2) million. Fourth quarter 2024 operating loss included ($1.1) million of non-cash stock compensation, while fourth quarter 2023 operating loss included ($1.6) million of non-cash stock compensation, a non-cash loss on impairment of an intangible of ($0.3) million and a reserve for barter credits of ($0.3).
Net loss improved to ($1.3) million from ($7.7) million. Fourth quarter 2024 net loss included ($1.1) million of non-cash stock compensation and a gain on fair value of warrant liability of $0.2 million, while fourth quarter 2023 net loss included a reserve for barter credits of ($0.3) million, ($1.6) million of non-cash stock compensation, a non-cash loss on impairment of an intangible of ($0.3) million.
Adjusted EBITDA loss improved to ($0.1) million from a loss of ($5.6) million.
Total cash balance at December 31, 2024 was $18.0 million, up from $16.1 million at September 30, 2024.
Cash flow from operations improved to break-even from cash used in operations of ($4.9) million for the three months ended December 31, 2023.
Full Year 2024 HighlightsAll comparisons are to the full year ended December 31, 2023
Net revenue declined to $99.0 million from $142.6 million, reflecting the success of the SKU rationalization, improved inventory profile, and new product introductions.
Gross margin improved to 62.1% compared to 49.3% in 2023, primarily reflecting the success of the above-referenced SKU rationalization and improved inventory profile.
Contribution margin rose to 17.1% from 1.2% in 2023.
Operating loss improved to ($11.8) million from ($76.2) million in 2023. Full year 2024 operating loss included ($7.5) million of non-cash stock compensation, and restructuring costs of ($0.6) million, while full year 2023 operating loss included ($8.3) million of non-cash stock compensation, a non-cash loss on impairment of intangibles of ($39.7) million, restructuring costs of ($1.6) million and a reserve for barter credits of ($0.3).
Net loss narrowed to ($11.9) million from ($74.6) million in 2023. Full year 2024 net loss includes ($7.5) million of non-cash stock compensation, restructuring costs of ($0.6) million, and a gain on fair value of warrant liability of $0.9 million, while full year 2023 net loss included ($8.3) million of non-cash stock compensation, a non-cash loss on impairment of intangibles of ($39.7) million, restructuring costs of ($1.6) million, a gain on fair value of warrant liability of $2.4 million, and a reserve on barter credits of ($0.3) million.
Adjusted EBITDA loss improved to ($2.1) million from a loss of ($22.3) million in 2023.
Total cash balance at December 31, 2024 was $18.0 million, down from $20.0 million at December 31, 2023.
Cash flow from operations improved to $2.2 million from cash used in operations of ($13.4) million for the year ended December 31, 2023.
2025 Outlook
For fiscal year 2025, taking into account the current global environment and impact of recently announced tariffs, the Company believes that net revenue will be between $104 million and $106 million, an increase of between 5% and 7% from net revenue of $99.0 million 2024. When considering approximately $4 million of net sales in 2024 related to discontinued SKUs, net revenue in 2025 is expected to increase on a pro forma basis by 9% to 12%.
The Company expects 2025 annual Adjusted EBITDA to be essentially break-even compared to an Adjusted EBITDA loss of $(2.1) million in 2024, reflecting the success of the Company's business improvement initiatives, offset by the impacts of recently announced tariffs.
Josh Feldman, Chief Financial Officer commented, "We continue to monitor the tariff situation and its potential impact on our operations and outlook. We have already taken steps that we believe will mitigate the negative effects of tariffs in 2025, and are prepared to take further action as necessary. With the support of an exceptional team, an inherent agility, and strong balance sheet, we remain confident in our ability to successfully and proactively navigate these challenges while remaining focused on long-term growth and profitability."
Share Repurchase PlanAs announced earlier today, the Company's Board of Directors has authorized a share repurchase program of up to $3.0 million of the Company's common stock for a period of two years ending March 18, 2027.
Non-GAAP Financial MeasuresFor more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Non-GAAP Financial Measures" section below. The most directly comparable GAAP financial measure for EBITDA and adjusted EBITDA is net loss and we expect to report a net loss for the years ending December 31, 2024 and December 31, 2025 due primarily to our operating losses, which includes stock-based compensation expense, and interest expense. We are unable to reconcile the forward-looking statements of EBITDA and adjusted EBITDA in this press release to their nearest GAAP measures because the nearest GAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort.
Webcast and Conference Call InformationAterian will host a live conference call to discuss financial results today, March 18, 2025, at 5:00 p.m. Eastern Time, which will be accessible by telephone and the internet. To access the call, participants from within the U.S. should dial (800) 715-9871 and participants from outside the U.S. should dial (646) 307-1963 and ask to be joined into the Aterian, Inc. call or use conference ID 3432648. Participants may also access the call through a live webcast at https://ir.aterian.io. The archived online replay will be available for a limited time after the call in the investors section of the Aterian corporate website.
About Aterian, Inc.Aterian, Inc. (NASDAQ:ATER) is a technology-enabled consumer products company that builds and acquires leading e-commerce brands with top selling consumer products, in multiple categories, including home and kitchen appliances, health and wellness and air quality devices. The Company sells across the world's largest online marketplaces with a focus on Amazon, Walmart and Target in the U.S. and on its own direct to consumer websites. Our primary brands include Squatty Potty, hOmeLabs, Mueller Living, Pursteam, Healing Solutions and Photo Paper Direct.
Forward Looking StatementsAll statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements regarding our projected net revenue and adjusted EBITDA for 2025, our guidance for 2025 and the current global environment and inflation. These forward-looking statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties and other factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to our ability to continue as a going concern, our ability to meet financial covenants with our lenders, our ability to maintain and to grow market share in existing and new product categories; our ability to continue to profitably sell the SKUs we operate; our ability to maintain Amazon's Prime badge on our seller accounts or reinstate the Prime badge in the event of any removal of such badge by Amazon; our ability to create operating leverage and efficiency when integrating companies that we acquire, including through the use of our team's expertise, the economies of scale of our supply chain and automation driven by our platform; those related to our ability to grow internationally and through the launch of products under our brands and the acquisition of additional brands; those related to consumer demand, our cash flows, financial condition, forecasting and revenue growth rate; our supply chain including sourcing, manufacturing, warehousing and fulfillment; our ability to manage expenses, working capital and capital expenditures efficiently; our business model and our technology platform; our ability to disrupt the consumer products industry; our ability to generate profitability and stockholder value; international tariffs and trade measures; inventory management, product liability claims, recalls or other safety and regulatory concerns; reliance on third party online marketplaces; seasonal and quarterly variations in our revenue; acquisitions of other companies and technologies and our ability to integrate such companies and technologies with our business; our ability to continue to access debt and equity capital (including on terms advantageous to the Company) and the extent of our leverage; and other factors discussed in the "Risk Factors" section of our most recent periodic reports filed with the Securities and Exchange Commission ("SEC"), all of which you may obtain for free on the SEC's website at www.sec.gov.
Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Investor Contact:
The Equity Group
Devin Sullivan Managing Director
Conor Rodriguez Associate
ATERIAN, INC.Consolidated Balance Sheets(in thousands, except share and per share data)
December 31,2023
December 31,2024
ASSETS
Current assets:
Cash
$
20,023
$
17,998
Accounts receivable, net
4,225
3,782
Inventory
20,390
13,749
Prepaid and other current assets
4,998
3,190
Total current assets
49,636
38,719
Property and equipment, net
775
685
Intangibles, net
11,320
9,757
Other non-current assets
138
381
Total assets
$
61,869
$
49,542
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Credit facility
$
11,098
$
6,948
Accounts payable
4,190
3,080
Seller notes
1,049
466
Accrued and other current liabilities
9,110
8,804
Total current liabilities
25,447
19,298
Other liabilities
391
227
Total liabilities
25,838
19,525
Commitments and contingencies
Stockholders' equity:
Common stock, $0.0001 par value, 500,000,000 shares authorized and 7,508,246 and 8,750,741 shares outstanding at December 31, 2023 and December 31, 2024, respectively(*)
9
9
Additional paid-in capital
736,675
742,591
Accumulated deficit
(699,815
)
(711,677
)
Accumulated other comprehensive loss
(838
)
(906
)
Total stockholders' equity
36,031
30,017
Total liabilities and stockholders' equity
$
61,869
$
49,542
(*) The number of shares and per share amounts have been retroactively restated to reflect the one for twelve (1 for 12) reverse stock split, which was effective on March 22, 2024.
ATERIAN, INC. Consolidated Statements of Operations (in thousands, except share and per share data)
Three Months Ended December 31,
Year Ended December 31,
2023
2024
2023
2024
Net revenue
$
32,754
$
24,607
$
142,566
$
99,045
Cost of goods sold
16,045
9,000
72,281
37,550
Gross profit
16,709
15,607
70,285
61,495
Operating expenses:
Sales and distribution
20,207
13,692
81,911
55,979
Research and development
808
—
4,616
—
General and administrative
3,654
3,527
20,220
17,339
Impairment loss on intangibles
283
—
39,728
—
Total operating expenses
24,952
17,219
146,475
73,318
Operating loss
(8,243
)
(1,612
)
(76,190
)
(11,823
)
Interest expense, net
345
209
1,421
949
Change in fair value of warrant liabilities
(30
)
(194
)
(2,440
)
