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DATE

Thursday, November 13, 2025 at 5 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Arturo Rodriguez
  • Chief Financial Officer — Josh Feldman
  • Investor Relations — Devin Sullivan

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RISKS

  • Net revenue decreased 27.5% to $19 million, attributed to lower consumer demand following tariff-related price increases.
  • Gross margin declined to 56.1% from 60.3%, primarily due to product mix, tariff impacts, and a $400,000 product remediation charge.
  • Operating loss widened to $2 million, and net loss increased to $2.3 million, both driven by reduced sales volume and lower contribution margin.
  • Inventory rose to $17.2 million from $13.7 million at year-end, reflecting slower demand for seasonal products and tying up more working capital.

TAKEAWAYS

  • Net Revenue -- $19 million, down 27.5% from $26.2 million, with most of the decline tied to price hikes to offset tariffs and softer demand.
  • Quarter-over-Quarter Revenue Trend -- Sequential revenue dipped by 2% compared to Q2 2025, signaling relative stabilization after earlier declines.
  • Gross Margin -- Stood at 56.1%, down from 60.3%, primarily due to unfavorable product mix and tariff-related cost increases, including a $400,000 remediation charge.
  • Contribution Margin -- Improved sequentially by over 700 basis points from Q2 to reach 15.5%, but remained below 17% from the prior year, reflecting partial recovery following new cost controls.
  • Adjusted EBITDA (non-GAAP) -- Loss of $400,000, a sharp improvement from a $2.2 million loss in Q2 2025, but below a gain of $500,000 the previous year, reflecting lower sales and gross margin.
  • Fixed Cost Reduction Progress -- Achieved approximately $5.5 million in targeted savings, with $3.8 million from headcount cuts and $1.7 million from vendor savings, expected to have greater future impact.
  • AI Productivity Initiatives -- AI integration in customer operations improved service performance by 30% during peak periods and reduced handle times by as much as 20% without increasing headcount.
  • Channel Mix -- Sales through Amazon platforms accounted for over 95% of revenue; new channels such as Home Depot and Best Buy had minimal sales, primarily in the setup phase for next season.
  • Launch Revenue -- Generated $200,000 in new product revenue, down from $600,000, linked to postponed Asia-sourced launches and deliberate marketing spend reduction.
  • Inventory Position -- Inventory at $17.2 million, up from $16.6 million a year ago and $13.7 million at year-end, due to lower demand projections and advance purchases ahead of tariff changes.
  • Cash Position -- Cash stood at $7.6 million as of September 30, 2025, compared to $18 million at 2024 year-end, with most outflows occurring in the first half; Q3 operating cash usage reduced notably by cost reductions and pricing strategies.
  • Guidance Maintained -- Management held guidance for H2 2025 net revenue of $36 million-$38 million and adjusted EBITDA breakeven to a $1 million loss.
  • Capital Preservation -- Management suspended the share repurchase program and does not anticipate raising additional equity capital, citing "expected working capital benefit."
  • Marketplace Expansion -- Initiated listings on Home Depot, Best Buy, and Bed Bath & Beyond, and began select product rollouts in the UK and EU, with expanded UK product availability targeting the holiday season.
  • Consumables Strategy -- Launched US-sourced products such as Squatty Potty wipes and a tallow-based skincare line, with both receiving high initial customer reviews; these product launches are characterized as "long-term plays."

SUMMARY

Management attributed sharp year-over-year declines in revenue and gross margin to tariff-related pricing actions and broader demand softness, but reported that key profitability metrics improved sequentially through aggressive cost containment. New product launches, particularly in consumables, are being selectively prioritized in US and low-tariff regions to offset tariff-driven volatility and support higher margins. The balance sheet shows continued pressure on cash and inventory, though leadership pointed to improvements in operating cash outflows and affirmed that no new external equity would be sought due to targeted working capital initiatives. Strategic distribution expansion is in early stages, with non-Amazon channels contributing marginally but positioned for scale as marketing investment ramps up in 2026.

  • Management indicated via direct quote that "top-line growth is our biggest challenge," prioritizing stabilization and selective investment over rapid expansion.
  • The China-US November 2025 tariff agreement reduced urgency for near-term manufacturing relocation, but select categories such as beverage refrigerators remain subject to tariffs of nearly 48%, prompting ongoing sourcing reviews.
  • AI-enabled customer operations drove notable service efficiencies and industry recognition, underlining continued investment in productivity-boosting technology.
  • Executive compensation structures were clarified to "sell to cover the tax liability." only, with no discretionary share sales; share ownership guidelines are maintained according to management comments.

INDUSTRY GLOSSARY

  • Amazon 1P: Amazon's first-party retail model, where Amazon buys products from vendors or manufacturers and resells them directly on its platform, often impacting price competition for third-party sellers.
  • Contribution Margin: Profit measure after deducting variable costs such as cost of goods sold, sales, and distribution expenses from revenue, a key indicator for operational efficiency in consumer product businesses.
  • Section 301 Tariffs: United States trade tariffs imposed on imports from China under Section 301 of the Trade Act of 1974, relevant to consumer goods sourcing decisions and product cost structures.

Full Conference Call Transcript

Arturo Rodriguez: Some of which may be outside our control and that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties, among others, are discussed in our filings with the SEC. We encourage you to review these filings for a discussion of these risks, including our annual report on Form 10, as well as subsequent filings with the SEC. You should not place undue reliance on these forward-looking statements. These statements are made only as of today, and we undertake no obligation to update or revise them for any new information except as required by law.

This call will also contain certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin, which we believe are useful supplemental measures that assist in evaluating our ability to generate earnings, provide consistency and comparability with our past performance, and facilitate period-to-period comparisons of our core operating results. Reconciliation of these non-GAAP measures to the most comparable GAAP measures and definitions of these indications are also included in our earnings release, which is available in the Investor Relations portion of our website. Please note that our definition of these measures may differ from similarly titled metrics presented by other companies.

We are unable to provide a reconciliation of non-GAAP and adjusted EBITDA margin to net income margin, the most directly comparable financial measure on a forward-looking basis without unreasonable efforts,

Devin Sullivan: because items that impact this GAAP financial measure are not within the company's control, and/or cannot be reasonably predicted. With that said, I would now like to turn the call over to Arti. Please go ahead.

Arturo Rodriguez: Thank you, Devin. And thank you, everyone, for joining us today. On today's call, I will be covering one, a brief overview of our Q3 results; two, a discussion of the tariffs' impact on our business; and an update on the proactive moves we continue to make to navigate this environment. Following my remarks, our CFO, Josh, will walk through our third quarter financial results in greater detail. Generally speaking, tariffs and the trade policy beginning earlier this year impacted our business and industry, as well as consumer decision-making. These US policies made it difficult to navigate considering the speed they were implemented in and the magnitude of the tariffs themselves.

Faced with these strong and ever-shifting headwinds, we responded with an aggressive, thoughtful strategy that we believe mitigated the impact that tariffs have produced, and most importantly, put us back on the path of stabilizing our business. As a result, we delivered on the improved performance we promised. Our results for 2025 improved across multiple metrics when compared to 2024, and we remain confident in our ability to deliver on our guidance. Let's look at what transpired in Q3. Net revenue was $19 million, a significant decline from Q3 2024; however, it represented just a 2% decrease from the previous quarter.

We also saw our Q3 2025 contribution margin improved by over 700 basis points from Q2 2025, back to over 15%. Our adjusted EBITDA loss improved by over 80% versus Q2 2025. The actions we took to rationalize our fixed cost and align our marketing spend to our new pricing reality have paid off. However, more work is needed, which I will address later in my prepared remarks. The net revenue decline from Q3 2025 to Q3 2024 was driven by two main factors. First, strategic price increases to offset tariff costs led to reduced run rates. This is especially acute in areas where we found our products to be one of the highest-priced offerings.

We saw this in particular in two key product areas, humidifiers and steam mops. To this, our primary competition, specifically in our dehumidifier and steam mop space, is Amazon 1P, meaning Amazon buys from brands directly and sells it as an online retailer. In those segments, we saw that Amazon did not raise prices significantly, if at all. As such, our best seller ranks were impacted and reduced. This led to slower unit velocity and made our products the higher-priced offering for most of the quarter. We believe we will continue to see our products being the highest-priced offering through 2025 before pricing becomes more competitive in 2026, specifically for dehumidifiers as the peak summer season is behind us.

As for the steam mops, we have seen competition begin to raise prices, and as such, we believe our offerings will be more competitive early in 2026. The second factor contributing to the decline in revenue is a general slowdown in consumer spending. In several of our tariff-affected categories, particularly those where competition comes mainly from other third-party sellers, we maintain best seller rankings comparable to last year's levels, yet have seen fewer units sold. This suggests that an issue lies not with our competitive position, but with reduced overall consumer demand likely due in part to uncertainty surrounding tariff trade policy, pricing pressures, softer market conditions, or a shift in discretionary spending.

Regardless, we are very confident our core products and brands are still very strong and viable and continue to have tremendous opportunities in marketplaces in the US and abroad. Now to the actions we announced in May. As reflected in our Q3 results, we continue to believe that the actions we took with respect to cost reductions, resourcing, product launch strategy, and pricing adjustments were correct. Here's an update on those six key points to that plan. First, the fixed cost reduction plan. As part of our immediate response to tariffs, we announced the fixed cost reduction initiative targeting $5 to $6 million in annualized savings.

Today, we believe we have secured approximately $5.5 million of those savings, of which $3.8 million is primarily coming from headcount reductions we implemented in May, and the remaining $1.7 million from vendor savings initially taking effect through the rest of 2025, with a more significant impact starting in 2026. In parallel, our team is actively leveraging AI to enhance productivity. Our focus for AI continues to be on creating operating leverage and scale for future growth, rather than immediate headcount reductions. For example, we have successfully implemented AI in our customer's experience operations, which has significantly improved service quality metrics even with a smaller team.

This implementation has led to Aterian's tech and customer experience teams being recognized as a 2025 recipient of the Genesys Orchestrator's Innovation Award. This CX transformation led to a 30% improvement in service level performance during seasonal peaks and up to a 20% improvement in talk time across brands. Email handle times also dropped even as voice support launched with no headcount increase, highlighting scalable gains in efficiency and productivity. Our experienced agents now handle more complex interactions across new voice and chat channels, improving key metrics and significantly reducing our total cost of ownership. Ultimately, we are hearing, listening, and addressing our customers better and faster than we have before.

Finally, we continue to see how AI deployed into our data platform along with some of our third-party tools can unlock efficiencies and insights to our operations. We see this as a continued area of opportunity for Aterian in finding ways to create savings and efficiencies. Two, accelerate resourcing. The financial incentive to move manufacturing out of China is less urgent due to the November 2025 agreement between China and the US, which reduced incremental tariffs to 20% from 30%. We continue to explore opportunities to diversify our supply chain when doing so can produce a material and substantial benefit.

We still see opportunities to source from outside China in categories which are not only expected to benefit from the reduced 2025 incremental tariffs, but also are still affected by the 2017 section 301 tariffs, which on average are an incremental 25% for certain of those products. For example, beverage refrigerators from China would be subject to approximately a 48% tariff. As such, we think opportunities to locate better sourcing for this product is prudent. We are currently reviewing our 2026 ordering plans and will provide better updated targets as part of our Q4 2025 reporting. Number three, pausing on launches in certain new categories.

As far as the tariff moves, we paused new category launches from China in Q2, particularly hard electronic goods. However, now that the reciprocal tariffs have been reduced and appear to be stable, we are restarting new product launches in the hard electronic goods space for 2026 with a much more focused approach. Number four, strategic pricing adjustments. As we said earlier, we implemented price increases to mitigate the effects of the shifting cost structure related to tariffs. Although we have defensively raised prices first in many categories, we do not foresee the need to take significant additional price increases across our portfolio. What we do believe is that our current competitors will eventually increase prices, including Amazon 1P.

As a result, our products should be priced more competitively in 2026, leading to improving run rates, assuming no material changes to consumer purchasing habits or additional changes to tariffs. New product launches in low tariff regions. We believe our push into consumables is still a strong strategic objective. Many of the items we are exploring can be sourced predominantly in the US and carry higher contribution margins in our broader product portfolio, which over time will drive a higher overall profitability. Further, the US-sourced nature of these products will limit our exposure to the continued risk related to tariffs and the uncertainty they can produce.

Today, we have launched Squatty Potty wipes, which are receiving great reviews, and just recently, we launched a line of Talos skincare under a healing solution brand that is crafted from nutrient-rich 100% grass-fed tallow. Initial reviews for these products have been positive as well. We will continue to expand consumable product launches in the coming months, all sourced from primarily the US or tariff nations with acceptable levies. With the stabilization of our operations substantially in hand, our focus has returned to growth. This will be our primary and most pressing objective for 2026 and be defined by thoughtful decision-making, patience, and a goal of complementing this growth with sustainable profitability.

Over the past quarter, we expanded our foundation of key marketplace channels by adding Home Depot, Best Buy, and Bed Bath and Beyond. This adds to our core US digital sales space, including walmart.com, target.com, eBay, our direct branded websites, and, of course, Amazon. In the past few months, we have also continued to expand our product offering in Amazon UK and expect to announce a few more sales channels over the coming months. As mentioned earlier, we have started to launch consumable products being led by our Squatty Potty wipes and healing solution, Talos. Both products are receiving high review scores and are really great quality products. However, I want to reconfirm. These will be long-term plays.

We have been very prudent in not overspending on marketing to allow us to further stabilize the overall business while still investing acceptable amounts to allow these products to grow. Over time, the contribution margin of consumable products will improve the company's overall profitability. In closing, we continue to deliver on our promises. Though the tariffs have impacted our run rates and velocity over this past several quarters, the swift actions we have taken have steadied Aterian. However, we still have a lot of work in front of us. We believe top-line growth is our biggest challenge, and we are committed to addressing it thoughtfully and profitably.

We will continue to expand our marketplace channels here and abroad, in order to broaden our reach and meet consumers where they shop. Our push into consumables is off to a good start, providing a solid foundation to drive sales of our current products and expand our consumer portfolio beginning in 2026 to deliver both higher sales and enhanced margin. The events of 2025 created a fundamental shift in our business and industry, causing the significant progress we made in 2024 to seem like a distant memory.

We are looking forward to 2026 with a renewed sense of optimism and a shared goal to build a growing profitable company supported by great products, great people, and a commitment to delivering long-term value to all our stakeholders. I want to thank our team for their dedication and tenacity, and to our shareholders, thank you for your continued support and patience. We believe the best is yet to come for Aterian. And with that, I will turn it over to Josh.

Josh Feldman: Thanks, Arti. Good evening, everyone. As Arti mentioned, Q3 was an important step forward for the business and a reflection of our ability to meaningfully address the disruption from this year's tariffs. When comparing our results to Q2 2025, revenue was broadly stable, contribution margin improved from 7.8% in Q2 to over 15% in Q3, and our adjusted EBITDA loss narrowed to just over $400,000 from a loss of $2.2 million in Q2. These results underscore the benefits of our cost reduction and our more disciplined approach to marketing and pricing in light of the new tariff environment.

The improvements show that the actions we have taken this year are having a real impact on our results and strengthening the foundation of the business. We remain focused on driving profitable growth, maintaining cost discipline, and protecting liquidity as we navigate the current environment. I will now walk through the Q3 results and our financial position in more detail. Net revenue for 2025 declined 27.5% to $19 million from $26.2 million in the year-ago quarter, primarily reflecting the reduction in consumer demand as we increased pricing to mitigate the impact of tariffs on our cost of goods sold. Our launch revenue was $200,000 during Q3 2025, compared to $600,000 in Q3 2024.

While we have postponed our Asian-sourced product launches for 2025, we plan on restarting these launches in 2026. We are also focused on consumables sourced in the US. Overall gross margin for the third quarter decreased to 56.1% from 60.3% in the year-ago quarter. The year-over-year decline was primarily related to product mix, impact of tariffs on our cost of goods sold, and a $400,000 charge relating to product remediation costs. Our overall Q3 2025 contribution margin, as defined in our earnings release, was 15.5%, a decrease from 17% in Q3 2024. Our contribution margin decrease primarily relates to the reduction in gross margin.

Looking deeper into our contribution margin for Q3 2025, our variable sales and distribution expenses as a percentage of net revenue decreased to 42.8% as compared to 43.3% in the year-ago quarter, primarily due to product mix and a decrease in logistics costs. Our operating loss of $2 million in 2025 increased from a loss of $1.7 million in the year-ago quarter, primarily driven by reduced sales volume and contribution margin compared to the prior year period. Our third quarter 2025 operating loss included $700,000 of non-cash stock compensation expense and $400,000 of product remediation costs, while our third quarter 2024 operating loss included $1.8 million of non-cash stock compensation expense.

Our net loss for 2025 of $2.3 million increased from a loss of $1.8 million in the year-ago quarter, primarily driven by the reduction in sales volume and contribution margin. Our adjusted EBITDA loss of $400,000, as defined in our earnings release, decreased compared to an EBITDA gain of $500,000 in 2024. This change was primarily driven by lower sales volumes stemming from tariff-related price increases as well as a decline in gross margin. Moving to the balance sheet. At 09/30/2025, we had cash of approximately $7.6 million compared to $18 million at 12/31/2024. Most of this reduction occurred in the first half of the year.

However, due to our fixed cost reductions and our pricing strategy, we significantly reduced the cash used in operations during Q3. Borrowings on our credit facility went from $6.9 million as of the end of 2024 to $6.2 million at the end of 2025. The credit facility balance is down $500,000 in the year-ago quarter. At 09/30/2025, our inventory level was at $17.2 million, up from $13.7 million at the end of 2024 and up from $16.6 million in the year-ago quarter end. Increased inventory levels are a result of lower expected demand for our seasonal air quality products, resulting in a higher proportion of our working capital being tied up in inventory.

As we noted in last quarter's call, we expect a reduction in this long inventory, which we purchased in advance of tariffs, over the next six to nine months. We also anticipate a working capital benefit in 2026 as we draw down this inventory to meet anticipated customer demand. As we look ahead to 2025, our focus remains on strengthening the business while positioning for renewed growth in 2026. The combination of targeted cost savings, US-sourced product launches, focused marketing, and disciplined cash management gives us confidence in our ability to navigate the ongoing tariff environment.

We are maintaining our initial guidance of net revenue for the six months ended 12/31/2025, of $36 million to $38 million and adjusted EBITDA of breakeven to a loss of $1 million. This compares to net revenue of $34.8 million and an adjusted EBITDA loss of $4.7 million for the six months ended 06/30/2025. Importantly, based on our liquidity position, the cost-saving measures, and our focus on preserving cash, we believe we are well-positioned to navigate the current environment without raising additional equity capital for the foreseeable future in support of our day-to-day operations due to the expected working capital benefit.

While tariff volatility is affecting the entire industry, Q3 showed that the actions we have taken to strengthen our balance sheet, streamline our cost structure, and sharpen execution are working. We have built a healthier foundation, and our focus as we look to 2026 is returning to sustainable top-line growth. Looking ahead, we are taking a disciplined and targeted approach, expanding our marketplace presence across key channels, leaning into consumables like Squatty Potty flushable wipes, and our tallow-based skincare line, continuing to use AI to drive efficiency and improve the customer experience. Over time, we believe these initiatives will support more durable growth and improve profitability. Our goal remains to build a stronger, growing, and profitable Aterian.

I want to thank our team for their execution and our shareholders for their continued support. With that, we will open up the lines for questions.

Operator: We will now begin the question and answer session. Again, if you would like to ask a question, just press star then the number one on your telephone keypad. And your first question comes from the line of Brian Kinstlinger with Alliance Global Partners. Brian, please go ahead.

Brian Kinstlinger: Hi, good evening. Thanks for taking my questions. I am wondering if you could dig into your new channel partners. So first, what percentage of revenue in the third quarter were sales through the Amazon channel versus other platforms? And then what are the early trends you are seeing on the new e-commerce sites? Which sites are you seeing more success versus maybe more challenges? Or a measured approach? You have got Home Depot, I think Best Buy, Bed Bath and Beyond, Target, Walmart. A lot of big names, some trying to assess, you know, where that success is coming from, if any, right now.

Arturo Rodriguez: Yeah. And, Brian, how are you doing? And it is a good question. So, you know, we are looking at it in the sense of we want to get the core channels up. And I think for the most part, we got all the big players in place. Some of those channels that we are launching, we are launching early. Such as Home Depot. We are getting it ready to understand how it works a bit better and how the marketing is going to work on that. But that is really a setup.

So the reality, Home Depot has been a very tiny amount of sales for the period because that is really an investment and setup for next season's dehumidifier season, right, where we do think that can play a significant role in us regaining some of that market share through other channels. Best Buy, we will know more about it during Q4 because the reality is we put our PureSteam steam mop on that one as part of a drive to sort of see how that channel will work during a holiday period. So we are still learning a lot about each of these channels.

I think a lot of our focus is now about thinking about how to really merchandise them because I do think certain of our products will do really well in a Best Buy, something like, as I mentioned earlier, the steam mop or some of the newer living products like the kettle. As opposed to Home Depot, where I think predominantly that is going to be a dehumidifier or environmental appliance channel. So far, Amazon is still predominantly, you know, probably over 95% of our revenue for the quarter.

But I would say that these are things that we are lining up to help us really start hitting the gas for in 2026, especially as we ramp up some of the marketing of those channels now that we feel comfortable with merchandising.

Brian Kinstlinger: Great. That is super helpful. And then when I look at launch revenue, I think it was a quarter of a million dollars in the quarter. How is that tracking to your plans? And then moreover, how should we think about the bear and bull case in light of your comments about carefully deploying capital for marketing for launches?

Arturo Rodriguez: Yeah. I will grab that, Josh. Yeah. So good question, Brian. You know, listen. The wipes are a bit different than some of our other products. Right? As we might have said in the past, you know, a lot of our Squatty Potty products are actually sold 1P. Right? We sell it wholesale to Amazon. So the wipes are no different. They are being sold to Amazon wholesale, so you do not get the same top-line dollar that we would theoretically see if we were selling directly. And so the numbers are probably a little bit muted there.

At the same time, with all the noise going on with tariffs, we did hold back a little bit on the marketing dollars. And even to that, you know, Amazon does not let you necessarily do promotionals within the first thirty days of certain launches. The ones we standardly do. Right? You can do buying programs and other items like that, but there are limitations. So we knew going into this, this is going to be kind of a slow step.

Some of the marketing that we kind of held back were more kind of, like, de-focused, more social-based marketing that I think we will reengage into 2026 since we will just get a natural kind of uplift as Q4 because of the holiday shoppers. In some aspects, we had to repivot some of the launch plans because of the tariff impact. That said, you know, end of the day, quality product is going to sell. It has got 4.6-star reviews, so we are very, very happy about how that is being how it is performing from a customer experience perspective.

I think as we kind of get through the holiday period, we are going to continue to see that grow over time. This is a long-term play. You know? And that is why I kind of emphasize this. That this market is going to continue to grow for us, and we are going to continue to expand even recently, we just put it on to Walmart and Target. That was not on the day one kind of ramp up. We wanted to give Amazon kind of, like, a thirty-day exclusive there. And so we are going to start putting that in other channels.

So I do see those numbers expecting to grow probably in Q2 in 2026 more than you see now. But keep in mind that, you know, the mix is a little bit different. It is more of a wholesale place, so the number is probably not as big as you would think.

Brian Kinstlinger: Great. My last question is you were clear with the changes in tariffs in China you are not in a race to get out anymore. Especially in certain SKUs. Depending on, again, the tariffs. But how quickly can you adjust sourcing once you do identify new sourcing as necessary for a SKU, for example, you talked about refrigeration and the high tariffs in China there. How quickly can you find new sourcing?

Arturo Rodriguez: It depends. I like, you know, our manufacturer for the beverage refrigerator, they do have facilities outside of China that actually manufacture that good. So in that case, Brian, it is just about making sure the good is still the same quality that we have gotten in China. And so we are very fortunate in that particular case. We are looking at sourcing that from outside of China, which will reduce the tariff impact significantly in that good. The dehumidifiers, you know, we did get out of China this year or a good second half, portion of those. But with the tariffs where they are today, you know, there is a question we are going through.

Like, where should we source that? Should we go back to China? Because I think in some aspects, the margins may actually be slightly better assuming the tariffs hold. And so it really depends on the manufacturer partners you pick. And the size of those and how flexible and strong they have in sense of additional capabilities outside of China. Unfortunately, in some cases, like a lot of our kitchen appliances, which still we have been able to raise prices on, like, you know, the new living products, you know, for the most part, they are sourced in China, so we are making it work that way.

But, really, where we are really focused on is our bigger, more cost goods, like a beverage refrigerator, like a dehumidifier. We do want to create optionality. And so it is about really making sure the manufacturers you partner with have that. And so it gives you some opportunities to sort of move as this continues to be volatile.

Brian Kinstlinger: Great. Nice work on the changes and pivots to the business.

Arturo Rodriguez: Thank you, Brian. Appreciate that.

Operator: Again, if you would like to ask a question, just press star then the number one on your telephone keypad. There are no further questions at this time. We will now turn the call back over to Mr. Sullivan. Please go ahead.

Devin Sullivan: Thank you, Mark. As usual, as part of Aterian's shareholder perks program, investors can sign up at aterian.io/perks. Participants have the ability to ask management questions during our earnings calls. I want to thank all of our Perks participants for their loyalty and their participation in the program, as well as for their questions. Management has picked a few of the more popular questions from the Perks program as well as from some other sources, and so I will read those now. Our first question, does the company have any plans to leverage its relationships with the big box retailers through which it sells merchandise, like Target or Walmart, to jointly spend on advertising?

And then sort of, in addition to that, have you considered selling your products either in-store or online at places like Sam's Club?

Arturo Rodriguez: I will grab that, Josh. Is that right? Thanks, Devin. Listen. Over time, we do believe big box retail is an important opportunity and strategic goal for Aterian, you know, including opportunities with the club stores. However, earlier this year with the unpredictability of tariffs, it made it difficult to progress that plan in 2025. We have put some products out there. We have PureSteam steam station going to Walmart this year and also our portable vacuum sealer from Living going to Walmart. So we have had some success there. But with the unpredictability of tariffs throughout the year, you know, the kind of process had to be put on hold and we had to refocus on the core business.

But I definitely think over time, especially from a long-term perspective, there is a tremendous amount of opportunity for our brands to be in big box retail, including the club stores.

Devin Sullivan: Okay. Great. The next question, does the company have any plans to break into the Amazon market in the EU and the UK, like the company has already done with MercadoLibre?

Arturo Rodriguez: You want me to try that? Thanks, Josh. Listen. We already sell in the UK and EU through our Photo Paper Direct brand. The amount of revenue related to that is relatively small to the rest of the business. We already have sales there. What we have done in 2025, especially with the tariffs, we have started expanding that. We are bringing a lot of our core SKUs, what we like to call internally our marquee SKUs. That includes our steam mop, some of our irons, our kettle, you know, our hand blenders. We have been moving them to be sold both in the UK and EU.

We have made good progress in the UK this year, and we are kind of excited to see how that is going to go for Q4 because it will be the first time, I think, we have a lot of these products lined up for the holiday season in the UK. Though it is obviously not as big as the US, but certainly, you will see an uplift. And so I think we are really bullish on the UK.

EU will probably use more of a 2026 expansion for those marquee products and SKUs just because there is a little bit more compliance and, you know, tax/legal things to go through as a company to make sure you are okay to sell there. But, certainly, we are quite bullish about the UK, and we are quite pleased with some of the progress, which we will be able to report in the Q4 2025 earnings.

Operator: Great. Thank you, Arti. The next question.

Devin Sullivan: What is the status of the share repurchase program?

Arturo Rodriguez: Hey, Devin. As we mentioned in the prepared remarks, obviously, the tariffs had a big impact on our business this year. We had to change our pricing strategy, our marketing strategy, and because of the uncertainty of the tariffs, we decided in May to suspend the share repurchase program. And so while we believe we have stabilized the business, barring no other changes in tariffs, we do still think the prudent measure is to preserve capital. So we will, you know, assess the program going forward, but right now, we are going to stick with the suspension.

Devin Sullivan: Okay. And our last question. Can you provide any insight regarding sales by the CEO and the CFO at the same time they are being compensated in shares?

Arturo Rodriguez: Sure. So a large portion of the executive compensation does include restricted stock units to tie, you know, the compensation to company performance. When these shares do vest, it does trigger an immediate tax liability. So the executives or we either cover this tax liability in cash or we go out and sell shares to cover the taxes. So this is specifically denoted on the form fours that are filed with the SEC. In the past two years or so, current management has not sold any shares outside of this sell to cover the tax liability.

In addition to that, the board and executive management are subject to stock ownership guidelines that require us to hold a set amount of shares. And as such, again, a large portion of our realized compensation is tied to the performance of our stock.

Devin Sullivan: Great. Thanks, Josh. That ends the perks question part of the call. We would like to thank everyone for their participation today. And have a good rest of the evening, and we look forward to speaking with you in conjunction with our fourth quarter financial results. Thank you, everyone. Good night.

Operator: That concludes today's call. You may now disconnect.