Aterian Issues Letter to Shareholders

Core Viewpoint - Aterian, Inc. is undergoing a significant transformation aimed at stabilizing operations and positioning for sustainable growth in 2025, following a comprehensive reassessment of its business model and strategic initiatives [2][3][11]. Business Model and Strategy - Over the past 18 months, Aterian has evaluated its brand portfolio, marketing strategies, inventory management, and supply chain to implement a turnaround strategy [2]. - The company streamlined its product portfolio to six foundational brands, enhancing efficiency and cost savings by transitioning to a third-party tech platform [4]. - Aterian is committed to an omnichannel sales approach, expanding its presence on platforms like Target+, Amazon, and Walmart, while modernizing its brand websites [6]. Financial Performance - In the third quarter of 2024, Aterian reported a significant improvement in financial metrics, narrowing its net loss by $56.3 million, or 84$2.2 million, a $10.6 million increase from the previous year, with cash on hand at$16.1 million as of September 30, 2024 [8]. - For the fourth quarter of 2024, Aterian expects net revenue between $24.2 million and$25.0 million, indicating a positive trend towards breakeven adjusted EBITDA [9]. Future Outlook - Aterian anticipates evolving into a growth company in 2025, driven by omnichannel expansion, organic product launches, and prudent capital allocation strategies [11]. - The company is taking a conservative approach to its 2025 expectations, considering potential impacts from increased tariffs on imports and planning to adjust pricing and manage costs accordingly [12][13]. - Aterian aims to maintain a strong balance sheet to adapt to trade policy uncertainties while focusing on long-term growth and profitability [13].