10-Q: iPower Inc. Reports Q3 2025 Results: Revenue Declines Amid Tariff Uncertainty

iPower Inc.'s Q3 2025 results reveal a revenue decrease primarily due to tariff uncertainties and reduced Amazon vendor orders, despite growth in service income.

Summary

• iPower Inc. reported a 28.9% decrease in revenue for the three months ended March 31, 2025, totaling $16.57 million compared to $23.31 million in the same period last year.
• The decline is attributed to tariff uncertainties and reduced Amazon vendor orders, partially offset by increased retail channel and service revenues.
• Cost of revenues decreased by 27.4% to $9.39 million, aligning with the decrease in sales.
• Gross profit decreased to $7.18 million, with the gross profit margin slightly decreasing to 43.3% from 44.5%.
• Operating expenses decreased by 15.1% to $7.45 million, driven by lower general and administrative expenses.
• The company reported an operating loss of $0.27 million, compared to an operating income of $1.60 million in the prior year.
• Net loss attributable to iPower Inc. was $0.34 million, compared to a net income of $1.02 million in the same quarter of the previous year.
• For the nine months ended March 31, 2025, revenue decreased by 18.0% to $54.65 million compared to $66.62 million in the prior year.
• The company experienced a net loss of $2.16 million for the nine-month period, slightly better than the $2.19 million loss in the previous year.
• The company's management believes that existing cash, cash equivalents, cash flows from operations, and the revolving line of credit will be sufficient to finance operations during the next 12 months.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to decreased revenue and a net loss, but the company is taking steps to address these issues and believes it has sufficient resources to continue operating.

Positives

• Service income increased by 43.1% for the three months ended March 31, 2025.
• Operating expenses decreased by 15.1% for the three months ended March 31, 2025.
• The company is actively working on a cost-restructuring plan to reduce costs and expenses in order to achieve profitability.
• The company believes that existing cash, cash equivalents, cash flows from operations, and the revolving line of credit will be sufficient to finance operations during the next 12 months.
• Net loss for the nine months ended March 31, 2025, was slightly better than the previous year.

Negatives

• Revenue decreased by 28.9% for the three months ended March 31, 2025, due to tariff uncertainties and reduced Amazon vendor orders.
• The company reported a net loss of $0.34 million for the three months ended March 31, 2025, compared to a net income of $1.02 million in the same quarter of the previous year.
• Gross profit decreased to $7.18 million for the three months ended March 31, 2025.
• The company's internal controls over financial reporting were not effective as of March 31, 2025.

Risks

• Uncertainty in trade stability and global economic disruption due to tariffs and international conflicts may negatively impact sales revenues.
• Supply chain disruptions may make it harder for the company to find favorable pricing and reliable sources for materials.
• Failure to comply with the continued listing requirements of the Nasdaq Stock Market could result in delisting.
• Changes in U.S. and international trade policies, particularly with respect to China, could materially and adversely impact the business and results of operations.
• The company's internal controls over financial reporting were not effective as of March 31, 2025.

Future Outlook

The company anticipates general economic disruption and uncertainty in trade stability during the near term. The company believes that its existing cash, cash equivalents, cash flows from operations, and the revolving line of credit will be sufficient to finance operations during the next 12 months. The company is actively working on a cost-restructuring plan to reduce costs and expenses in order to achieve profitability.

Management Comments

• Our core strategy continues to focus on expanding our geographic reach across the United States and internationally through organic growth, both in terms of expanding customer base as well as brand and product development.
• We are actively developing our in-house branded products and through supply chain partners, which to date include the iPower and Simple Deluxe brands and more, some of which have been designated as Amazon best seller product leaders and Amazon Choice products, among others.

Industry Context

The company operates in the consumer goods sector, specifically focusing on hydroponics equipment, general gardening supplies, and consumer home goods. The demand for hydroponic gardening products depends on the uncertain growth of new and emerging industries or segments, including the growing of cannabis, which is subject to varying, inconsistent, and rapidly changing laws and regulations.

Comparison to Industry Standards

• It is difficult to provide a direct comparison to industry standards without specific data on competitors in the hydroponics and gardening supplies market.
• Companies like Scotts Miracle-Gro and GrowGeneration Corp. are key players in the broader gardening and hydroponics industry, but their financial performance and market strategies may differ significantly from iPower Inc.
• Scotts Miracle-Gro, for example, has a more diversified product portfolio and a larger market capitalization, while GrowGeneration focuses primarily on hydroponics and indoor gardening.
• iPower's reliance on Amazon as a primary sales channel also distinguishes it from companies with broader retail distribution networks.
• Given the unique challenges iPower faces, such as tariff uncertainties and supply chain disruptions, comparing its performance to industry averages may not provide a complete picture of its financial health and strategic positioning.

Legal Proceedings

• The company was previously involved in a legal dispute with Boustead Securities LLC, which has been settled.
• The company is required to retain PPP loan documentation through 2026 and permit authorized representatives of the SBA to access such files upon request.

Related Party Transactions

• During the year ended June 30, 2024, the Company started selling products through MII Strategy Inc. (MII), a company owned by the Companys CEO, Mr. Chenlong Tan.
• On April 1, 2024, the Company borrowed $ 350,000 short-term loan from an entity owned by Mr. Allan Huang, one of the majority shareholders of the Company.

Stakeholder Impact

• Shareholders may be concerned about the decreased revenue and net loss, as well as the potential delisting from Nasdaq.
• Employees may be affected by the cost-restructuring plan.
• Customers may experience changes in product availability and pricing due to supply chain disruptions and tariffs.
• Suppliers may be affected by the company's efforts to manage payment terms and find alternative sources of supply.

Next Steps

• The company plans to increase investments in product and brand development.
• The company is actively working on a cost-restructuring plan to reduce costs and expenses in order to achieve profitability.
• The company will continue to monitor the closing bid price of its common stock and may consider available options to regain compliance with the Minimum Bid Price Requirement of Nasdaq.

Key Dates

Keywords

iPower, revenue, tariffs, Amazon, financial results, Q3 2025, net loss, operating expenses, cost of revenues, gross profit, hydroponics, gardening supplies, home goods