Executive Summary

Fiscal Q2 2025 delivered a return to GAAP profitability: revenue rose 14% year over year to $19.1M, gross margin expanded to 44.0%, and EPS was $0.01; operating expenses declined 22%, driving positive operating income of $0.68M .
Momentum in SuperSuite and improved pricing negotiations underpinned gross margin expansion; management officially shuttered the legacy commercial hydroponics business to focus on a data-driven, multi-category retail and services model .
Balance sheet actions remained a focus: total debt was 31% lower vs June 30, 2024 ($4.4M vs $6.3M); cash was $2.9M at quarter-end, reflecting debt paydown and working capital needs .
No formal quantitative guidance was issued; S&P Global consensus estimates were unavailable at the time of analysis, limiting “vs estimates” comparisons. Investors should watch for continuing SuperSuite mix shift (~20% of sales run-rate) and channel partner dynamics with Amazon 1P as key stock-reaction catalysts .

What Went Well and What Went Wrong

What Went Well

Gross margin expansion and operating leverage: gross margin rose 40 bps YoY to 44.0%; operating expenses fell 22% YoY to $7.7M, enabling a swing to GAAP profitability .
SuperSuite momentum and platform enhancements: management cited accelerating demand and integrations across logistics, merchandising, data analytics; supplier portal progress and AI research aimed at predictive analytics and automation .
- “Our SuperSuite platform is gaining further momentum… We are making steady progress with our recently launched SaaS platform…” — CEO Lawrence Tan .
Strategic shift away from legacy commercial hydroponics, aligning with higher-growth multi-category retail and services; cost optimization initiatives continue to deliver .

What Went Wrong

Sequential revenue was flat and cash declined: Q2 revenue ~$19.07M vs Q1 ~$19.01M; cash fell to $2.88M from $2.58M in Q1 and $7.38M at June 30, reflecting operations and debt activity .
Debt dynamics sequentially mixed: while down vs June 30, 2024, total debt increased sequentially from $3.5M (Q1) to $4.4M (Q2), indicating higher revolver utilization before declining again to $3.6M in Q3 .
Estimates unavailable, limiting external benchmark comparisons; investors lack a consensus anchor for EPS/revenue and may default to qualitative drivers and YoY comparisons (S&P Global consensus unavailable at time of analysis).

Financial Results

Sequential Performance (Q1 → Q2 → Q3 FY2025)

Metric	Q1 FY2025 (Sep 30, 2024)	Q2 FY2025 (Dec 31, 2024)	Q3 FY2025 (Mar 31, 2025)
Revenue ($USD Millions)	$19.01	$19.07	$16.57
Gross Profit ($USD Millions)	$8.49	$8.39	$7.18
Gross Margin %	44.7%	44.0%	43.3%
Total Operating Expenses ($USD Millions)	$11.23	$7.71	$7.45
Income from Operations ($USD Millions)	$(2.75)	$0.68	$(0.27)
Net Income Attributable ($USD Millions)	$(2.03)	$0.22	$(0.34)
EPS (Basic/Diluted, $)	$(0.06)	$0.01	$(0.01)

Q2 YoY Comparison (Three months ended Dec 31)

Metric	Q2 FY2024	Q2 FY2025	YoY Change
Revenue ($USD Millions)	$16.80	$19.07	+14%
Gross Profit ($USD Millions)	$7.32	$8.39	+15%
Gross Margin %	43.6%	44.0%	+40 bps
Total Operating Expenses ($USD Millions)	$9.87	$7.71	−22%
Net Income Attributable ($USD Millions)	$(1.91)	$0.22	+$2.13M
EPS (Basic/Diluted, $)	$(0.06)	$0.01	+$0.07

Reported vs Consensus (Q2 FY2025)

Metric	Reported	S&P Global Consensus	Result vs Estimates
Revenue ($USD Millions)	$19.07	N/A	N/A
EPS ($)	$0.01	N/A	N/A

Note: Wall Street consensus from S&P Global was unavailable at the time of analysis; “vs estimates” comparisons cannot be determined. Values were intended to be retrieved from S&P Global.

Segment/Channel Breakdown (Revenue Composition)

Metric	Q1 FY2025	Q2 FY2025	Q3 FY2025
Product Sales ($USD Millions)	$18.28	$17.61	$15.55
Service Income ($USD Millions)	$0.73	$1.47	$1.02
Total Revenues ($USD Millions)	$19.01	$19.07	$16.57

KPIs and Balance Sheet Highlights

Metric	Q1 FY2025	Q2 FY2025	Q3 FY2025
Cash and Equivalents ($USD Millions)	$2.58	$2.88	$2.19
Total Debt ($USD Millions)	$3.50	$4.40	$3.60
Accounts Receivable ($USD Millions)	$12.28	$13.93	$10.18
Inventories ($USD Millions)	$8.67	$9.18	$9.77
SuperSuite Share of Revenue (%)	N/A	~20% (Q2 run-rate)	~20% (mix)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025/Q3-Q4	None provided	None provided	Maintained (no guidance)
Gross Margin	FY2025/Q3-Q4	None provided	None provided	Maintained (no guidance)
Operating Expenses	FY2025/Q3-Q4	None provided	None provided	Maintained (no guidance)
EPS	FY2025/Q3-Q4	None provided	None provided	Maintained (no guidance)

Note: No quantitative guidance ranges were disclosed in Q1/Q2/Q3 FY2025 press releases or the Q2 FY2025 earnings call .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 FY2025 and Q3 FY2025)	Current Period (Q2 FY2025)	Trend
SuperSuite platform adoption	Q1: Launch of SaaS platform; strong pipeline; channel expansion (AliExpress, TikTok, Temu) . Q3: SuperSuite ~20% of revenue; strong pipeline; comprehensive platform messaging .	Continued momentum; supplier portal progress; AI research to enhance predictive analytics; ~20% sales contribution run-rate cited .	Strengthening; growing mix in revenue.
Supply chain diversification	Q1: First PO from Southeast Asia; diversification priority . Q3: Expanding manufacturing in U.S.; relationships in new geographies .	Expanded manufacturing base to Vietnam; diversification to reduce import and lead-time risks .	Accelerating; multi-geo sourcing.
Cost optimization and operating leverage	Q1: OpEx down YoY; margin expansion despite tough comp . Q3: OpEx improved 15% YoY .	OpEx down 22% YoY; positive operating income; margin +40 bps YoY .	Sustained operating leverage.
Channel partner dynamics (Amazon 1P vs 3P)	Q3: Lower purchasing volumes from largest channel partner weighed on product sales .	Amazon shifting away from some smaller 1P vendors; iPower relationship strengthened; potential share opportunity .	Favorable positioning with Amazon 1P.
Portfolio shift (hydroponics)	Q1: Deemphasis continued . Q3: Continued mix shift .	Legacy commercial hydroponics shuttered; hydro remains in consumer portfolio .	Strategic exit completed.
Technology/AI	Q1: SaaS platform launch . Q3: Platform evolution .	Active AI research for predictive analytics and automation in SuperSuite .	Increasing tech enablement focus.

Management Commentary

“We delivered strong results across all key financial metrics in our fiscal second quarter while further enhancing our SuperSuite platform.” — CEO Lawrence Tan .
“Our SuperSuite platform is gaining further momentum… refining its capabilities to improve supplier collaboration, streamline operations, and better align partners with evolving market demands.” — CEO Lawrence Tan .
“Our ongoing efforts to optimize our cost structure have delivered meaningful results… We have also officially shuttered our legacy commercial hydroponics business…” — CFO Kevin Vassily .
“We are actively researching artificial intelligence applications to further enhance the platform’s predictive analytics, automate routine processes and provide smarter decision-making tools.” — CEO Lawrence Tan .
“Last quarter, we took a significant step forward by expanding our manufacturing base to Vietnam… we expect to see meaningful benefits, including lower production and logistics costs.” — CEO Lawrence Tan .

Q&A Highlights

Product seasonality: Hydroponics historically more seasonal; overall mix evolving toward multi-category retail and services .
Hydroponics exit clarified: Commercial hydro business shuttered; hydro remains in consumer online portfolio; strategic focus shifts to SuperSuite and multi-category .
SuperSuite scale: ~20% of sales in the December quarter, ~$16M annual run-rate; healthy partner pipeline and ongoing onboarding .
Amazon 1P dynamics: Amazon has reduced some smaller 1P relationships; iPower believes their 1P execution improved relationship strength, potentially creating share opportunities .

Estimates Context

S&P Global Wall Street consensus estimates for Q2 FY2025 (revenue, EPS) were unavailable at the time of analysis; therefore, “vs estimates” comparisons cannot be determined. Values were intended to be retrieved from S&P Global.

Where estimates may need to adjust:

Given positive GAAP profitability, reduced OpEx, and margin expansion, sell-side models (if/when available) may consider higher gross margin assumptions and lower fulfillment/selling expense ratios. SuperSuite mix trajectory toward ~20% supports more resilient revenue composition and potentially steadier margins .

Key Takeaways for Investors

GAAP profitability returned with EPS of $0.01, driven by margin expansion and lower operating expenses; watch durability of operating leverage in lower revenue environments .
SuperSuite is scaling (~20% revenue run-rate) with AI-enabled enhancements, supplier portal progress, and multi-channel expansion (AliExpress, TikTok, Tmall), supporting a differentiated services-led thesis .
Supply chain diversification (Vietnam, U.S., alternative suppliers) mitigates import/lead-time risks and may support margin stability amid macro/tariff fluctuations .
Debt reduced materially vs June 30 baseline (to $4.4M), but sequential fluctuations suggest revolver usage; monitor cash and working capital intensity as SuperSuite scales .
Channel partner dynamics at Amazon 1P appear constructive for iPower; potential share tailwind vs smaller vendors exiting 1P .
No formal guidance and unavailable consensus limit near-term estimate anchoring; use YoY/seq trend evidence (margin, OpEx, SuperSuite mix) for interim positioning .
Near-term trading: catalysts include continued margin resilience, debt reduction, and SuperSuite announcements; medium-term thesis hinges on services/platform mix shift and execution with key channels and suppliers .

iPower Inc. (IPW)·Q2 2025 Earnings Summary