Aterian, Inc. reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable decline in net revenue, which fell to $26.2 million for the three months ended September 30, 2024, down 33.9% from $39.7 million in the same period of 2023. For the nine months ended September 30, 2024, net revenue was $74.4 million, a decrease of 32.2% compared to $109.8 million in the prior year. This decline was primarily attributed to SKU rationalization and competitive pricing pressures across all business categories.

Despite the drop in revenue, Aterian improved its profitability metrics. The gross profit margin increased from 49.4% in Q3 2023 to 60.3% in Q3 2024, driven by a favorable product mix and reduced liquidation of excess inventory. Operating loss for the three months ended September 30, 2024, was $1.7 million, a significant improvement of 73.4% from a loss of $6.5 million in the same quarter of 2023. The net loss for the quarter also decreased to $1.8 million from $6.3 million year-over-year, reflecting a 71.7% improvement.

For the nine-month period, Aterian reported a net loss of $10.6 million, down from $66.9 million in the previous year, marking an 84.2% improvement. Total operating expenses for the nine months ended September 30, 2024, were $56.1 million, a substantial decrease of 53.8% from $121.5 million in 2023. This reduction was largely due to cost-cutting measures, including workforce reductions that impacted approximately 17 employees and 26 contractors globally, resulting in restructuring charges of $0.6 million for the nine months.

The company’s cash position also declined, with cash as of September 30, 2024, reported at $16.1 million, down from $20.0 million at the end of 2023. Total assets decreased to $52.1 million from $61.9 million during the same period. Aterian remains in compliance with its financial covenants under the MidCap credit facility, which was amended in February 2024 to reduce the minimum liquidity requirement.

Strategically, Aterian has shifted its technology platform to an integrated third-party model and continues to pursue mergers and acquisitions as part of its growth strategy. The company has also faced challenges related to its reliance on Amazon for a significant portion of its revenue, which exposes it to risks associated with changes in Amazon's terms of service.