Executive Summary

Fiscal Q3 2025 revenue declined to $16.6M, gross margin softened to 43.3%, and EPS was $(0.01), driven by lower product sales to the largest channel partner; operating expense fell 15% YoY, and total debt was cut to $3.6M .
SuperSuite reached ~20% of total revenue mix, with management emphasizing supply chain diversification (Southeast Asia and U.S.) and a new “Made in USA” module to enhance resilience and agility .
No formal quantitative guidance was issued; management highlighted momentum in SuperSuite, cost optimization, and strengthening the balance sheet as key drivers ahead .
Stock reaction catalysts: accelerating SuperSuite penetration, U.S. manufacturing initiative (“Made in USA”), and continued deleveraging; near-term headwinds stem from demand caution and normalized purchasing by the largest channel partner .

What Went Well and What Went Wrong

What Went Well

SuperSuite hit ~20% of revenue mix; management sees a “strong pipeline” and continued expansion of logistics, merchandising, and data capabilities to drive partner sales (“SuperSuite now accounts for approximately 20% of our total revenue mix”) .
Operating expense reduced 15% YoY to $7.4M via cost optimization and lower selling/fulfillment tied to the largest channel partner .
Balance sheet progress: debt reduced by 43% to $3.6M since June 30, 2024, reflecting consistent paydown .

Quotes

CEO: “We’ve accelerated efforts to diversify our supply chain by expanding manufacturing into the U.S., as well as continuing to cultivate relationships with alternative suppliers in new geographies” .
CFO: “We continued to benefit from the optimization initiatives we implemented in fiscal 2024, resulting in a 10% improvement in operating expenses for the quarter…we reduced our total debt obligations by nearly 20% during the quarter” .

What Went Wrong

Revenue fell materially YoY due to lower product sales to the largest channel partner, despite SuperSuite growth; gross margin decreased to 43.3% (from 44.5% YoY) .
Net loss of $(0.34)M vs prior-year net income of $1.0M; diluted EPS $(0.01) vs $0.03 YoY .
Cash fell to $2.2M at quarter-end (from $7.4M at June 30, 2024), reflecting working capital dynamics amid channel demand caution .

Financial Results

Headline P&L vs Prior Periods (USD)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$19.01	$19.07	$16.57
Gross Profit ($M)	$8.49	$8.39	$7.18
Gross Margin (%)	44.7%	44.0%	43.3%
Total Operating Expenses ($M)	$11.23	$7.71	$7.45
Net Income ($M)	$(2.03)	$0.22	$(0.34)
Diluted EPS ($)	$(0.06)	$0.01	$(0.01)

Notes: Q3 YoY revenue $16.57M vs $23.31M (Q3 2024) . Q3 YoY gross margin 43.3% vs 44.5% .

Segment/Revenue-Type Breakdown (USD)

Revenue Type	Q1 2025	Q2 2025	Q3 2025
Product Sales ($M)	$18.28	$17.61	$15.55
Service Income ($M)	$0.73	$1.47	$1.02
Total Revenues ($M)	$19.01	$19.07	$16.57

KPIs and Balance Sheet Items

KPI / Balance Item	Q1 2025	Q2 2025	Q3 2025
SuperSuite Mix (% of Revenue)	~10%	~20%	~20%
Cash & Equivalents ($M)	$2.58	$2.88	$2.19
Total Debt ($M)	$3.50	$4.40	$3.60
Accounts Receivable ($M)	$12.28	$13.93	$10.18
Inventories ($M)	$8.67	$9.18	$9.77

Actual vs Estimates (S&P Global)

Metric	Q3 2025 Consensus	Q3 2025 Actual
Revenue ($M)	N/A*	$16.57
Primary EPS ($)	N/A*	$(0.01)

*Consensus unavailable; Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4 outlook	None provided	None provided	Maintained (no formal guidance)
Gross Margin	FY/Q4 outlook	None provided	None provided	Maintained (no formal guidance)
OpEx	FY/Q4 outlook	None provided	Continued optimization emphasized	Qualitative only
Debt/Leverage	Ongoing	Ongoing paydown	Continued reduction emphasis	Qualitative only

No formal quantitative ranges were issued; management focused on supply chain diversification, SuperSuite momentum, and cost optimization .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Supply Chain Diversification	Added Vietnam; diversifying suppliers; normalized lead times	Expanding into U.S.; “Made in USA” module launched	Strengthening; reshoring emphasis
SuperSuite Platform	Supplier portal launched; ~10% revenue mix; pipeline building	~20% mix; broader logistics/merchandising/data integrations	Accelerating adoption
AI/Technology Initiatives	Researching AI to enhance portal predictive analytics	Continued emphasis on data-driven platform capabilities	Ongoing development
Tariffs/Macro	Potential tariff increases; mitigation via diversification and pricing strategies	Cautious demand environment; diversified supplier base to reduce volatility	Persistent headwind; mitigations in place
Channel Strategy	Strengthening Amazon 1P; expansion on Temu, TikTok, AliExpress	Continued multichannel focus; SuperSuite drives omnichannel reach	Diversification continues
Product/Service Mix	Services disclosure increased with SuperSuite growth	Higher services income contributes; slight gross margin impact	Mix shift to services

Management Commentary

Strategic message: Build a more “agile and resilient” supply chain (U.S. manufacturing expansion; alternative geographies) to reduce volatility and support long-term growth .
SuperSuite as growth engine: “SuperSuite now accounts for approximately 20% of our total revenue mix…a comprehensive, data-driven platform” .
Cost discipline and balance sheet: “15% reduction in operating expenses…reduced total debt by nearly 20% during the quarter” .

Key quotes

CEO: “These actions are central to our strategy to build a more agile and resilient supply chain capable of supporting long-term growth” .
CEO on Made in USA: Platform to facilitate domestic manufacturing lines—compliance, facility setup, labor sourcing, funding, and sales channels .
CFO: “We faced a challenging comp…due to elevated purchasing volumes from our largest channel partner in the year-ago period” .

Q&A Highlights

Geographic exposure: Majority of supply from China remains; Southeast Asia growing; U.S. suppliers onboarded; working to diversify further .
Inventory strategy: Aim for 2–3 months of inventory; avoid overstocking amid a volatile macro; maintain flexibility .
“Made in USA” competency: iPower’s capabilities span sales channels, product analytics, local policy expertise, and resource access to support domestic manufacturing setup .
Prior quarter context: Commercial hydroponics business shuttered; consumer hydro still sold online; focus on multi-category retail and services .
Amazon dynamics: Amazon narrowing 1P relationships benefits well-executed larger partners; potential share opportunity for iPower .

Estimates Context

S&P Global Wall Street consensus for Q3 2025 EPS and revenue was unavailable; small-cap coverage appears limited. We benchmarked actuals to company-reported results and prior periods .
Given the YoY revenue decline and margin compression, models may need to adjust for lower run-rate product sales to the largest channel partner and a rising services mix via SuperSuite (which can modestly lower reported gross margin) .

Key Takeaways for Investors

SuperSuite is scaling as a durable growth vector (~20% mix), supporting omnichannel expansion and supplier services; continued partner pipeline should underpin topline resilience as product sales to the largest channel partner normalize .
Margin profile is stable but modestly lower vs YoY as services rise; expect near-term gross margin variability with mix, while optimization actions keep OpEx discipline intact .
Balance sheet progress through debt reduction continues; monitor cash trends and working capital as the company invests in SuperSuite and U.S. manufacturing initiatives .
Strategic “Made in USA” module and supplier diversification (Southeast Asia/U.S.) reduce geopolitical/logistics risk and can improve economics and lead times over time .
With no formal guidance, watch catalysts: partner additions, new channels (Temu/AliExpress/TikTok), U.S. manufacturing developments, and Amazon 1P relationship dynamics .
Near-term trading implications: revenue softness tied to channel partner volumes and cautious demand may cap upside; balance sheet deleveraging and SuperSuite momentum are supportive on dips .
Medium-term thesis: pivot from single-channel product concentration to data-driven services and diversified sourcing should enhance durability and valuation as execution de-risks supply chain and mix .

iPower Inc. (IPW)·Q3 2025 Earnings Summary