Koss (KOSS) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 2025 increased 5.4% year-over-year to $2.78 million; nine-month sales up 1.8% to $9.54 million, driven by higher export and OEM sales, partially offset by declines in some domestic segments.

• Gross margin improved to 39.0% for Q3 2025 from 31.9% in Q3 2024, reflecting lower freight costs and a favorable customer mix.

• Net loss for Q3 2025 was $317,000, nearly flat year-over-year; nine-month net loss improved to $642,000 from $841,000, reflecting higher SG&A expenses and minimal tax benefit.

• Basic and diluted net loss per share was $0.03 for Q3 and $0.07 for the nine months ended March 31, 2025.

• Cash and cash equivalents stood at $2.9 million, with $10.1 million in short-term investments and no outstanding borrowings on a $5 million credit facility.

Financial highlights

• Gross profit for Q3 2025: $1.08 million (39.0% margin); nine months: $3.66 million (38.4% margin), both up year-over-year.

• SG&A expenses for Q3 2025: $1.60 million (up 10.5% year-over-year); nine months: $4.96 million (up 8.5%).

• Operating loss for Q3 2025 was $519,000, improved from $610,000 in Q3 2024; nine-month operating loss narrowed to $1.30 million from $1.55 million.

• Interest income for Q3 2025 was $208,000; nine-month interest income totaled $667,000.

• Operating cash flow for nine months: $320,000 provided; investing cash flow: $(375,000) used; financing cash flow: $152,000 provided.

Outlook and guidance

• Elevated freight and tariff costs expected to persist, with new tariffs on China-sourced products potentially raising duty rates to 145%.

• Management is monitoring the impact of new tariffs and developing mitigation strategies.

• Inflation, higher interest rates, and global trade tensions may dampen consumer sentiment and increase costs.

• Management will continue to monitor macroeconomic and geopolitical risks, adjusting pricing and supply chain strategies as needed.

• Forward-looking statements caution about risks from economic conditions, inflation, supply chain, and geopolitical instability.