iPower Inc. Q2 FY2025 earnings call

• Delivered strong financial metrics in fiscal Q2 2025 while enhancing the SuperSweet platform.
• Optimized operations and strengthened presence across established (e.g., Amazon) and emerging (e.g., TikTok, T-Mobile) sales channels.
• Shuttered legacy commercial hydroponics business to focus on core consumer products/services and the SuperSweet platform, transitioning to a multi-category retailer and supply chain services provider.
• Diversified supply chain, reducing inventory by ~12% since June 2024, and expanded manufacturing to Vietnam to enhance resilience.
• Enhanced SuperSweet by integrating logistics, merchandising, and data analytics functions; launched SuperSuite supplier portal; researching AI applications to improve predictive analytics and efficiency.

Total revenue in fiscal second quarter 2025 increased 14% to $19.1 million. Gross profit increased 15% to $8.4 million, with gross margin at 44% (up 40 basis points from year-ago). Operating expenses improved 22% to $7.7 million. Net income was $0.2 million. SuperSweet supply chain business contributed about 20% of sales last quarter, with a roughly $16 million annual run rate, up from prior year figures.

• Continue expanding sales channels and investing in SuperSweet to enhance its capabilities.
• Commit to building a resilient and efficient supply chain to support ecommerce, supply chain management, and logistics.
• Confident in executing strategic initiatives for long-term sustainable growth, including capitalizing on potential M&A opportunities.

• Forward-looking statements subject to uncertainties, risks, and circumstances outside the company's control.
• Supply chain fluctuations and global trade restrictions could impact operations and costs.
• Dependence on key channel partners and market dynamics related to sales channel performance.

Q: A few questions on product sales, including seasonality and closure of commercial hydroponics business.

A: Lawrence Tan notes hydroponics categories have seasonality, with consumer hydroponics continuing to perform but commercial hydroponics shuttered to focus on core categories and SuperSweet platform. Kevin Vassily clarifies commercial hydroponics is shuttered while consumer hydroponics remains in online channels.

Q: Update on SuperSweet partners and pipeline.

A: Lawrence Tan states SuperSweet contributed about 20% of sales last quarter and has a strong pipeline, with Kevin Vassily noting a roughly $16 million annual run rate for SuperSweet, up from prior year. Lawrence mentions actively engaging with a number of partners in the pipeline.

Q: Amazon reducing 1P relationships and impact on iPower.

A: Lawrence Tan and Kevin Vassily state iPower isn't impacted, and Amazon's focus on larger partners presents a market share opportunity for iPower, as iPower has executed well on Amazon's metrics.