Introduces Ann
ual
Guidance for 2025
Announces $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 Highlights
All comparisons are to the fourth quarter ended December 31, 2023
Full Year 2024 Highlights
All comparisons are to the full 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 Plan
As 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 Measures
For 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 Information
Aterian 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 Statements
All 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
[email protected]
Conor Rodriguez
Associate
[email protected]
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ATERIAN, INC.
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December 31,
|
|
December 31,
|
||||
|
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.
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|
ATERIAN, INC.
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Three Months Ended
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|
Year Ended
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||||||||||||
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|
|
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 |
) |
|
|
(924 |
) |
|
Other expense, net |
|
|
158 |
|
|
|
(215 |
) |
|
|
260 |
|
|
|
61 |
|
|
Loss before income taxes |
|
|
(8,716 |
) |
|
|
(1,412 |
) |
|
|
(75,431 |
) |
|
|
(11,909 |
) |
|
Benefit for income taxes |
|
|
(1,009 |
) |
|
|
(113 |
) |
|
|
(867 |
) |
|
|
(47 |
) |
|
Net loss |
|
$ |
(7,707 |
) |
|
$ |
(1,299 |
) |
|
$ |
(74,564 |
) |
|
$ |
(11,862 |
) |
|
Net loss per share, basic and diluted |
|
$ |
(1.16 |
) |
|
$ |
(0.18 |
) |
|
$ |
(11.43 |
) |
|
$ |
(1.68 |
) |
|
Weighted-average number of shares outstanding, basic and diluted(*) |
|
|
6,622,540 |
|
|
|
7,343,880 |
|
|
|
6,524,589 |
|
|
|
7,069,404 |
|
(*) 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.
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|
ATERIAN, INC.
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|
||||||||
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|
|
Year Ended December 31, |
||||||
|
|
|
2023 |
|
2024 |
||||
|
OPERATING ACTIVITIES: |
|
|
|
|
||||
|
Net loss |
|
$ |
(74,564 |
) |
|
$ |
(11,862 |
) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
||||
|
Depreciation and amortization |
|
|
3,886 |
|
|
|
1,689 |
|
|
(Recovery) provision for sales returns |
|
|
(413 |
) |
|
|
57 |
|
|
Amortization of deferred financing cost and debt discounts |
|
|
429 |
|
|
|
198 |
|
|
Stock-based compensation |
|
|
8,336 |
|
|
|
7,510 |
|
|
Change in deferred tax expense |
|
|
(1,153 |
) |
|
|
(5 |
) |
|
Change in inventory provisions |
|
|
(3,149 |
) |
|
|
(2,738 |
) |
|
Change in fair value of warrant liabilities |
|
|
(2,440 |
) |
|
|
(924 |
) |
|
Impairment loss on intangibles |
|
|
39,728 |
|
|
|
— |
|
|
Provision for barter credits |
|
|
323 |
|
|
|
— |
|
|
Allowance for credit losses |
|
|
85 |
|
|
|
16 |
|
|
Changes in assets and liabilities: |
|
|
|
|
||||
|
Accounts receivable |
|
|
205 |
|
|
|
427 |
|
|
Inventory |
|
|
26,426 |
|
|
|
9,378 |
|
|
Prepaid and other current assets |
|
|
2,597 |
|
|
|
762 |
|
|
Accounts payable, accrued and other liabilities |
|
|
(13,684 |
) |
|
|
(2,343 |
) |
|
Cash (used in) provided by operating activities |
|
|
(13,388 |
) |
|
|
2,165 |
|
|
INVESTING ACTIVITIES: |
|
|
|
|
||||
|
Purchase of fixed assets |
|
|
(119 |
) |
|
|
(42 |
) |
|
Purchase of Step and Go assets |
|
|
(125 |
) |
|
|
— |
|
|
Purchase of minority equity investment |
|
|
— |
|
|
|
(200 |
) |
|
Cash used in investing activities |
|
|
(244 |
) |
|
|
(242 |
) |
|
FINANCING ACTIVITIES: |
|
|
|
|
||||
|
Repayments on seller notes |
|
|
(668 |
) |
|
|
(633 |
) |
|
Borrowings from MidCap credit facilities |
|
|
79,806 |
|
|
|
60,866 |
|
|
Repayments for MidCap credit facilities |
|
|
(90,190 |
) |
|
|
(65,165 |
) |
|
Insurance obligation payments |
|
|
(1,042 |
) |
|
|
(682 |
) |
|
Insurance financing proceeds |
|
|
986 |
|
|
|
700 |
|
|
Cash used in financing activities |
|
|
(11,108 |
) |
|
|
(4,914 |
) |
|
Foreign currency effect on cash, cash equivalents, and restricted cash |
|
|
306 |
|
|
|
(61 |
) |
|
Net change in cash and restricted cash for the year |
|
|
(24,434 |
) |
|
|
(3,052 |
) |
|
Cash and restricted cash at beginning of year |
|
|
46,629 |
|
|
|
22,195 |
|
|
Cash and restricted cash at end of year |
|
$ |
22,195 |
|
|
$ |
19,143 |
|
|
RECONCILIATION OF CASH AND RESTRICTED CASH: |
|
|
|
|
||||
|
Cash |
|
|
20,023 |
|
|
|
17,998 |
|
|
Restricted cash—Prepaid and other current assets |
|
|
2,043 |
|
|
|
1,015 |
|
|
Restricted cash—Other non-current assets |
|
|
129 |
|
|
|
130 |
|
|
TOTAL CASH AND RESTRICTED CASH |
|
$ |
22,195 |
|
|
$ |
19,143 |
|
|
|
|
|
|
|
||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
||||
|
Cash paid for interest |
|
$ |
1,718 |
|
|
$ |
1,141 |
|
|
Cash paid for taxes |
|
$ |
94 |
|
|
$ |
152 |
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
||||
|
Non-cash consideration paid to contractors |
|
$ |
321 |
|
|
$ |
620 |
|
|
Non-cash minority equity investment |
|
$ |
— |
|
|
$ |
50 |
|
Non-GAAP Financial Measures
We believe that our financial statements and the other financial data included in this press release have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the U.S. (“GAAP”). However, for the reasons discussed below, we have presented certain non-GAAP measures herein.
We have presented the following non-GAAP measures to assist investors in understanding our core net operating results on an on-going basis: (i) Contribution Margin; (ii) Contribution margin as a percentage of net revenue; (iii) EBITDA (iv) Adjusted EBITDA; and (v) Adjusted EBITDA as a percentage of net revenue. These non-GAAP financial measures may also assist investors in making comparisons of our core operating results with those of other companies.
As used herein, Contribution margin represents gross profit less amortization of inventory step-up from acquisitions (included in cost of goods sold), reserve on barter credits and e-commerce platform commissions, online advertising, selling and logistics expenses (included in sales and distribution expenses). As used herein, Contribution margin as a percentage of net revenue represents Contribution margin divided by net revenue. As used herein, EBITDA represents net loss plus depreciation and amortization, interest expense, net and provision for income taxes. As used herein, Adjusted EBITDA represents EBITDA plus stock-based compensation expense, changes in fair-market value of warrant liability, impairment on intangibles, restructuring expenses, reserve on barter credits, and other expenses, net. As used herein, Adjusted EBITDA as a percentage of net revenue represents Adjusted EBITDA divided by net revenue. Contribution margin, EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to loss from operations or net loss, as determined under GAAP.
We present Contribution margin and Contribution margin as a percentage of net revenue, as we believe each of these measures provides an additional metric to evaluate our operations and, when considered with both our GAAP results and the reconciliation to gross profit, provides useful supplemental information for investors. Specifically, Contribution margin and Contribution margin as a percentage of net revenue are two of our key metrics in running our business. All product decisions made by us, from the approval of launching a new product and to the liquidation of a product at the end of its life cycle, are measured primarily from Contribution margin and/or Contribution margin as a percentage of net revenue. Further, we believe these measures provide improved transparency to our stockholders to determine the performance of our products prior to fixed costs as opposed to referencing gross profit alone.
In the reconciliation to calculate contribution margin, we add e-commerce platform commissions, online advertising, selling and logistics expenses (“sales and distribution variable expense”), and the reserve for barter credits to gross profit to inform users of our financial statements of what our product profitability is at each period prior to fixed costs (such as sales and distribution expenses such as salaries as well as research and development expenses and general administrative expenses). By excluding these fixed costs, we believe this allows users of our financial statements to understand our products performance and allows them to measure our products performance over time.
We present EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue because we believe each of these measures provides an additional metric to evaluate our operations and, when considered with both our GAAP results and the reconciliation to net loss, provide useful supplemental information for investors. We use these measures with financial measures prepared in accordance with GAAP, such as sales and gross margins, to assess our historical and prospective operating performance, to provide meaningful comparisons of operating performance across periods, to enhance our understanding of our operating performance and to compare our performance to that of our peers and competitors. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue are useful to investors in assessing the operating performance of our business without the effect of non-cash items.
Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue should not be considered in isolation or as alternatives to net loss, loss from operations or any other measure of financial performance calculated and prescribed in accordance with GAAP. Neither EBITDA, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue should be considered a measure of discretionary cash available to us to invest in the growth of our business. Our Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue may not be comparable to similar titled measures in other organizations because other organizations may not calculate Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue in the same manner as we do. Our presentation of Contribution margin and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from such terms or by unusual or non-recurring items.
We recognize that EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue, have limitations as analytical financial measures. For example, neither EBITDA nor Adjusted EBITDA reflects:
Additionally, Adjusted EBITDA excludes non-cash expense for stock-based compensation, which is and is expected to remain a key element of our overall long-term incentive compensation package.
We also recognize that Contribution margin and Contribution margin as a percentage of net revenue have limitations as analytical financial measures. For example, Contribution margin does not reflect:
Contribution Margin
The following table provides a reconciliation of Contribution margin to gross profit and Contribution margin as a percentage of net revenue to gross profit as a percentage of net revenue, which are the most directly comparable financial measures presented in accordance with GAAP.
|
|
|
Three Months Ended December 31, |
|
Year Ended
|
|
||||||||||||
|
|
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
||||||||
|
|
|
(in thousands, except percentages) |
|
||||||||||||||
|
Gross Profit |
|
$ |
16,709 |
|
|
$ |
15,607 |
|
|
$ |
70,285 |
|
|
$ |
61,495 |
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||
|
Reserve on barter credits |
|
|
323 |
|
|
|
— |
|
|
|
323 |
|
|
|
— |
|
|
|
E-commerce platform commissions, online advertising, selling and logistics expenses |
|
|
(17,293 |
) |
|
|
(10,844 |
) |
|
|
(68,864 |
) |
|
|
(44,553 |
) |
|
|
Contribution margin |
|
$ |
(261 |
) |
|
$ |
4,763 |
|
|
$ |
1,744 |
|
|
$ |
16,942 |
|
|
|
Gross Profit as a percentage of net revenue |
|
|
51.0 |
|
% |
|
63.4 |
|
% |
|
49.3 |
|
% |
|
62.1 |
|
% |
|
Contribution margin as a percentage of net revenue |
|
|
(0.8 |
) |
% |
|
19.4 |
|
% |
|
1.2 |
|
% |
|
17.1 |
|
% |
Adjusted EBITDA
|
|
|
Three Months Ended
|
|
Year Ended
|
|
||||||||||||
|
|
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
||||||||
|
|
|
(in thousands, except percentages) |
|
||||||||||||||
|
Net loss |
|
$ |
(7,707 |
) |
|
$ |
(1,299 |
) |
|
$ |
(74,564 |
) |
|
$ |
(11,862 |
) |
|
|
Add: |
|
|
|
|
|
|
|
|
|
||||||||
|
Benefit for income taxes |
|
|
(1,009 |
) |
|
|
(113 |
) |
|
|
(867 |
) |
|
|
(47 |
) |
|
|
Interest expense, net |
|
|
345 |
|
|
|
209 |
|
|
|
1,421 |
|
|
|
949 |
|
|
|
Depreciation and amortization |
|
|
469 |
|
|
|
410 |
|
|
|
3,886 |
|
|
|
1,689 |
|
|
|
EBITDA |
|
|
(7,902 |
) |
|
|
(793 |
) |
|
|
(70,124 |
) |
|
|
(9,271 |
) |
|
|
Other expense, net |
|
|
158 |
|
|
|
(215 |
) |
|
|
260 |
|
|
|
61 |
|
|
|
Impairment loss on intangibles |
|
|
283 |
|
|
|
— |
|
|
|
39,728 |
|
|
|
— |
|
|
|
Change in fair market value of warrant liabilities |
|
|
(30 |
) |
|
|
(194 |
) |
|
|
(2,440 |
) |
|
|
(924 |
) |
|
|
Reserve on barter credits |
|
|
323 |
|
|
|
— |
|
|
|
323 |
|
|
|
— |
|
|
|
Restructuring expense |
|
|
— |
|
|
|
— |
|
|
|
1,633 |
|
|
|
565 |
|
|
|
Stock-based compensation expense |
|
|
1,564 |
|
|
|
1,116 |
|
|
|
8,336 |
|
|
|
7,510 |
|
|
|
Adjusted EBITDA |
|
$ |
(5,604 |
) |
|
$ |
(86 |
) |
|
$ |
(22,284 |
) |
|
$ |
(2,059 |
) |
|
|
Net loss as a percentage of net revenue |
|
|
(23.5 |
) |
% |
|
(5.3 |
) |
% |
|
(52.3 |
) |
% |
|
(12.0 |
) |
% |
|
Adjusted EBITDA as a percentage of net revenue |
|
|
(17.1 |
) |
% |
|
(0.3 |
) |
% |
|
(15.6 |
) |
% |
|
(2.1 |
) |
% |
Each of our products typically goes through the Launch phase and depending on its level of success is moved to one of the other phases as further described below:
i. Launch phase: During this phase, we leverage our technology to target opportunities identified using AIMEE (Artificial Intelligence Marketplace e-Commerce Engine) and other sources. This phase also includes revenue from new product variations and relaunches. During this period of time, due to the combination of discounts and investment in marketing, our net margin for a product could be as low as approximately negative 35%. Net margin is calculated by taking net revenue less the cost of goods sold, less fulfillment, online advertising and selling expenses. These primarily reflect the estimated variable costs related to the sale of a product.
ii Sustain phase: Our goal is for every product we launch to enter the sustain phase and become profitable, with a target of positive 15% net margin for most products, within approximately three months of launch on average. Net margin primarily reflects a combination of manual and automated adjustments in price and marketing spend.
iii. Liquidate phase: If a product does not enter the sustain phase or if the customer satisfaction of the product (i.e., ratings) is not satisfactory, then it will go to the liquidate phase and we will sell through the remaining inventory. Products can also be liquidated as part of inventory normalization especially when steep discounts are required.
The following tables break out our fourth quarter and full year 2023 and 2024 results of operations by our product phases (in thousands):
|
|
Three months ended December 31, 2023 |
|||||||||||
|
|
Sustain |
Launch |
Liquidation/
|
Fixed Costs |
Stock Based
|
Total |
||||||
|
Net revenue |
$ |
25,175 |
$ |
390 |
$ |
7,189 |
$ |
— |
$ |
— |
$ |
32,754 |
|
Cost of goods sold |
|
10,457 |
|
114 |
|
5,474 |
|
— |
|
— |
|
16,045 |
|
Gross profit |
|
14,718 |
|
276 |
|
1,715 |
|
— |
|
— |
|
16,709 |
|
Operating expenses: |
|
|
|
|
|
|
||||||
|
Sales and distribution expenses |
|
12,973 |
|
263 |
|
4,056 |
|
2,567 |
|
348 |
|
20,207 |
|
Research and development |
|
— |
|
— |
|
— |
|
528 |
|
280 |
|
808 |
|
General and administrative |
|
— |
|
— |
|
— |
|
2,717 |
|
937 |
|
3,654 |
|
Impairment loss on intangibles |
|
— |
|
— |
|
— |
|
283 |
|
— |
|
283 |
|
|
|
|
|
|
|
|
||||||
|
|
Three months ended December 31, 2024 |
|||||||||||
|
|
Sustain |
Launch |
Liquidation/
|
Fixed Costs |
Stock Based
|
Total |
||||||
|
Net revenue |
$ |
23,332 |
$ |
347 |
$ |
928 |
$ |
— |
$ |
— |
$ |
24,607 |
|
Cost of goods sold |
|
8,536 |
|
143 |
|
321 |
|
— |
|
— |
|
9,000 |
|
Gross profit |
|
14,796 |
|
204 |
|
607 |
|
— |
|
— |
|
15,607 |
|
Operating expenses: |
|
|
|
|
|
|
||||||
|
Sales and distribution expenses |
|
9,965 |
|
309 |
|
570 |
|
2,767 |
|
81 |
|
13,692 |
|
General and administrative |
|
— |
|
— |
|
— |
|
2,492 |
|
1,035 |
|
3,527 |
|
|
|
|
|
|
|
|
||||||
|
|
Year-ended December 31, 2023 |
|||||||||||
|
|
Sustain |
Launch |
Liquidation/
|
Fixed Costs |
Stock Based
|
Total |
||||||
|
Net revenue |
$ |
114,919 |
$ |
959 |
$ |
26,688 |
$ |
— |
$ |
— |
$ |
142,566 |
|
Cost of goods sold |
|
53,139 |
|
455 |
|
18,687 |
|
— |
|
— |
|
72,281 |
|
Gross profit |
|
61,780 |
|
504 |
|
8,001 |
|
— |
|
— |
|
70,285 |
|
Operating expenses: |
|
|
|
|
|
|
||||||
|
Sales and distribution expenses |
|
53,442 |
|
603 |
|
14,820 |
|
10,607 |
|
2,439 |
|
81,911 |
|
Research and development |
|
— |
|
— |
|
— |
|
3,202 |
|
1,414 |
|
4,616 |
|
General and administrative |
|
— |
|
— |
|
— |
|
15,737 |
|
4,483 |
|
20,220 |
|
Impairment loss on intangibles |
|
— |
|
— |
|
— |
|
39,728 |
|
— |
|
39,728 |
|
|
|
|
|
|
|
|
||||||
|
|
Year-ended December 31, 2024 |
|||||||||||
|
|
Sustain |
Launch |
Liquidation/
|
Fixed Costs |
Stock Based
|
Total |
||||||
|
Net revenue |
$ |
92,542 |
$ |
1,829 |
$ |
4,674 |
$ |
— |
$ |
— |
$ |
99,045 |
|
Cost of goods sold |
|
35,012 |
|
651 |
|
1,887 |
|
— |
|
— |
|
37,550 |
|
Gross profit |
|
57,530 |
|
1,178 |
|
2,787 |
|
— |
|
— |
|
61,495 |
|
Operating expenses: |
|
|
|
|
|
|
||||||
|
Sales and distribution expenses |
|
40,353 |
|
1,087 |
|
3,113 |
|
9,643 |
|
1,783 |
|
55,979 |
|
General and administrative |
|
— |
|
— |
|
— |
|
11,612 |
|
5,727 |
|
17,339 |