ATER - Earnings call transcript Q3 2021

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Operator

Good day. Thank you for standing by, and welcome to the Aterian Inc. Q3 Earnings Report Conference Call. At this time, all participants are in a listen-only mode. After this speakers' presentation, there will be a question-and-answer session. you. Thank Instructions] [Operator to conference like speaker to today, Mr. hand would over the your I of and Investor Director Grozovsky, Ilya Relations Corporate Development. The yours. floor is

Ilya Grozovsky

that remind for would CEO; on judgment statements Relations website in today, copy and of to the place statements. undue today presentation only Accordingly, certain a differ Rodriguez, our earnings will Investor call we this joining these on of press on like Officer. third aterian.io. forward-looking you reliance of Arturo Yaniv at you based may A number Financial are are and XXXX make business. today's these results. you and Aterian's factors materially should release statements forward-looking expectations Aterian's discuss Co-Founder section forward-looking from and Sarig, as today's to of and Chief quarter I On not statements. actual Thank Aterian's results us reflect current is Aterian's analysis available affecting

not our update whether our release discussion earnings as We thorough well result of refer obligation or you a as and events made forward-looking call we webcast, more any statements with third in uncertainties and included otherwise. on the the this future SEC. a as do or alter any quarter statements, disclaimer be undertake to filings forward-looking is information, new forward-looking the of statements to regarding to For with conference associated risks that the

I be the call. filed in over release the will of addition, the In may can that, Yaniv. certain call today. on refer Company found turn With to earlier Explanation metrics to these metrics non-GAAP this earnings

Yaniv Sarig

joining And Ilya. today. thank us Thank you, everyone, for you,

build, grateful on software But Thanks rates. chain next brand marked due approximately disruption Amazon Amazon and Aterian, expansion and we've quarter supply Global in and our integration, very competitive very shipping term. our for views stepping in various we we soaring for to product assist improve in by a In to create specifically welcome sellers this launches, benefits XX% raw we're secure on opportunities left culture move their past to our above international third-party shipping cultivate of revenue I'm their a reap of as to XX its quarter, to programs to material infrastructure, adapt development. by a chain our of cost At to in obstacles adaptability the daily, platform. product supply challenges including relentless M&A continued as and global growth was stones failures building global we from on the our and everything and business becomes ourselves often business take many third consumer challenges to to to crisis. things stepping leading the We Our that all wake projected -- strengthen pressure and Logistics, general, how seen centers. been to of shipping provided to our with help of logistics share that thank fulfillment teams resilience to logistics partners. want adapting brought it our chain relationships containers ability glad to we opportunity an ecosystem months. rates us I manufacturers our strategic in to our for supply the us by perseverance, we've from their able path

in us helped as to manufacturing well partners partners as China, reduced have other which leverage We their with relationships shipping some companies. Flex other on logistics and rates also the XPO secured Board Chinese with side

all-hands-on-deck that the [rolled we out] our the mentality disruptions process our intense work company. hard are debt global us. the opportunity million. yet and following Directors. believe In feel plan chain This aspects our crisis important for year. impact under mitigating an to by our thank with of that three into to Board the disruptions In on going that to shipping, all take growth overseen to of agreement the finalized, products not a we the we competitors. parallel, internal the manufacturing emphasize and rebuild months being next strategy impact important sustainable to behind on addition conservative, around worked internal chain million securing designed It's most an of optimized from while plan by to still an $XX entire our went additional yet ran We're some an closely is better supply shipping rates reduce the the to We the to reached into Board and drive $XX facility on process I challenging our lender myself of to want for directly supply can that Company. base we team strong, presented for our plan are mitigate

consolidation current to high many not While wish belief shipping also our by of we're and competitors we will we we reignite swan believe of lot strong foresee, be we of be position of consider M&A strategy. that sportsmanship, our opportunities ourselves the side soon other success with have any events a can't of black crisis, there should degree ample excited this a We the kind to excluding again crisis. on our a that in

to have looking result paying quarter see not of of scale. access low-cost when to we total employee the [$X the billion. results. leading we We're the is technology technology capital tedious brands is the years expertise $X.X execution. the infrastructure, and investment abundant aggregators but pay to been software to should of long platform to manual continue our on brands third of our in in billion our community a the believe excited platform the the a competitors And per being for $XX pioneered alone, approximately One treated attention the processes that put our million] aggregated revenue attention Most today, that sustainable engineered employee. consumer in with build approximately based performed us Aterian's raised our invested per e-commerce current that revenue supply automates on aggregators financially investment data have our to direct succeed. space of for of ahead vision believe execution that And really In critical and required investment are marketplaces. target is infrastructure. As in that XXXX. companies SMB into to pack approximately by chain agile TTM to point that execution efficiency for model close In long-term evaluating term, we investors in is is on proprietary regards

to us of website XXXX, 'XX international important speak regarding will those in environment in heard remind additional we itself to in in forward saw continue products us for through chains XXXX, more decline organic effect diversifying the between investors brick-and-mortar we beyond. supply business As based chain have for and new looking It's many become started growth by through of U.S., around in e-commerce our compared push at and when the Europe. generate as comparing more direct-to-consumer government to from and channels, supply macro XXXX e-commerce sales shipping core a our to the the and and tapering and business costs, are most of organically the XXXX M&A same America strategy, leveraging growth We'll We've suffered strategy investing important of storm pandemic. detail year by reopening CAGR inflation started to and increasing a similar Likewise, traditional competitors of our created very before launching the expansion. the a settles, the in shift who perfect to a M&A we've been disappointing Like Eastern XXXX to own grew in concerns in recently our that companies, focus more follow strategy it's going certain growth operated growth a our brand organically Directionally, also XXXX. in it organic At similar some to important months. issues. realize COVID-XX time, the assistance, this Amazon our on of with as results. in level about the dealing We're of South combination priorities include previous products shareholders sales the It's retail, through especially business. compared that with the initiatives boosted put macro the lot from year to organic environment. dust our when and our our and our the year-over-year launching few we'll XXXX. and dramatic at XX% for normalizes exciting other to share challenging our were next

proprietary fulfillment oversized we shipping Although advantage impacted by several the oversized long gives by because in a our who our us impacted more strongly organic dominated uniquely it cost that businesses by been is in adversely goods. term, smaller our products, and categories in items believe investment led the have strategic core network are

retail products Our us quarter, revenue the to organic made open ecosystem as bigger our we over called platform acquisitions and our recent to decision in affiliate e-commerce community, business years, and from that This Typically, past such promote continuous platforms to as two Amazon on the Walmart. brand we've we well and products. paid as in through investment seen directly. will internal grow publishers publishers take web these the products many marketing base invest also a our in designed our and In content allow to build expansion channel years additional have a to channels benefit seller role a continue strong affiliate DealMojo. by online the as past

additional push using the for influencers vision, in continues sales revenue have already more making an ourselves, we're visits. strategy. creating a platform potentially driven us sellers us. our most the by and discovering forward sales our e-commerce and to opportunities own the term, of and a our was ambitious product third-party us the products total while benefit available be publishers them In our with turning publishers financial reflected become it collaboration We our to generating on DealMojo large the stream promote and another we scale of we offer important sales believe we will allow XXX to short revenue was for we're designed way publishers products. further products. the traffic Arty the will aggregate revenue that, on through not more for to Aterian the around seller drives to share additional than platform that to a I'll promote walk leading our part of to publishers corner With that monthly our it sprint, a streamlining quarter. This other of allow in platform to As you through to e-commerce. number lot work listed content the several with Today, of consumer pass and million to do. results product working marathon, to is DealMojo felt believe with monthly of that a

Arturo Rodriguez

and everyone. Yaniv, day, good Thanks,

of Here are details the performance financial third our quarter.

in $X.X of the $XX.X million a our purchase; net $XX.X $X.X ago past offset increased revenue $XX quarter brands year reduction and of is revenues revenue. XX% business, of organic quarter our organic million increase revenue $XX.X net million business, which our XXXX, and wholesale, third million $XX.X our our net revenue million million to $X.X million organic For acquisitions; business. of quarter acquired of of revenue which wholesale $XX.X acquisitions, of of million in decrease and the net our the primarily from The million; current from revenue from net from predominantly brands acquisitions; mergers business; from our $X.X net was and pass. quarter comprised of of mergers by PPE; after of $XX.X one comprised was million is year and year revenue of net in The ago in $XX.X from net built of million million an revenue wholesale

same decrease The As business global a phase in organic by chain material million to excluding and million initial products changing which affected sustained habits phase is during $XX.X an has products pricing, due consumer the impacts $XX.X approximately phase the from to year the reduced of million approximately increased products quarter acquisition pricing XXXX. $XX.X demand performance our decrease. M&A million sold on not did of in of of million velocity, sales represents happened to the $XX.X COVID-XX's but our last and first which in related a opening when of $XX.X due and million of well decrease led initial reopening; of COVID-XX have to disruptions, our revenue; from in which supply reminder, our $X third the to repeat the retail

launched grew, last raise a in success has also year-to-date the than business a we market the in the XX of organic year-to-date pricing in need demand products. saw increase products of $X.X rate year's chain same launches launch decrease recently conditions longer launched led to originally our not supply product due as versus eight Even in slight we of zero We performance phase our in this have $X.X and to certain versus to quarter Our staying also their prior of our Year-to-date, revenue planned. has introduced quarter. have million products same did period. though million. led the disruptions to products phase and launch This XX

As have normalizes. we the Yaniv the our being until supply previously, to mentioned products launching decided pause for chain of time

line revenue and the seasonality M&A PPD Potty expectations with and Our acquisitions. Smash the of in and timing outside of $XX.X of of million for is those closing Squatty the

previously capabilities sellers' our That due with Healing product. the as We new purchase is Solutions of believe branded the still As chain previously within we Solutions its pleased vendors said, mentioned, acquisition long-term accessible strength an still are manufacturers expectations from in supply to purchase planned. third-party off difficulties upfront price shift acquisition our to falls and Healing multiple.

ago net to which to million gross pricing. from the margin on current we the The to compared an approximately of in XX.X% in increased million the ago third increase XX.X% as year shorts we XX.X% gross estimate quarter inventory and prior XXXX. quarter increase primarily quarter, mix Overall, to inventory sequential approximately shorts QX in margin quarter, is over in year for due the an product from of quarter $X the suffered be impact $X Finally, in in revenue, period from period.

Our gross gross by in brands X.X% our the to approximately versus mix alone. inclusion impacted margin of the the product in from our increased cost believe We pursuant year last predominantly shipping is favorable containers margin third acquired improvement M&A. the quarter of

see We larger QX. a slightly in impact expect to

our when inventory which by were in Our and impacted chain margin to XX.X% cost disruptions, acquisitions, last-minute impacts global supply quarter. the excluding higher is from year's mile XX.X%. CM, fulfillment decreased sales from step-up overall compared CM the distribution QX of costs prior charges XXXX noncash our contribution tightness Within drove which given negatively carrier than

as distribution XX.X% compared of to revenue year Our to QX net quarter. the XX.X% and sales variable as in a increased percentage ago expenses

action for pressures supply continue of $X.X XXXX. the disruptions We was quarter expect in chain XXXX. quarter. increased items in decrease to Adjusted we XXXX due third Outside sustained and of to XXXX defined mile our impacts we'll quarter the in XXXX remainder to discussed, the contribution the cost. current global of million as last products see to XX.X% in $X.X EBITDA these margin continue believe QX the QX XX.X% to our saw earnings compared million versus of release third for the CM see

XX, to $X.X September and XXXX. loss operating income related of decrease a value June includes price expense the primarily at includes the in versus change from Our for million quarter liabilities stock-based in fair $X.X of contingent XX compensation which also share is million,

for by leading a stock High by equitization our $XXX million. impacted the to offset loss of the the to loss valuations $X.X from Trail net Our warrant due in debt, million, fluctuations our price of quarter majority of distinguishment change been of income has

the Turning sheet. to balance

to of our September the of As net $XX.X million lender, driven in reported working predominantly XX. $XX million of by had cash loss we $XX.X compared million is cash The and cash XX, payment June previously at decrease to cash capital. end

This of XXXX order requirements ACs navigate initially supply pressure on as XXXX we will the and seasonal early chain for in to our than and products our inventory need to minimum humidifiers. disclosed, inventory increase build liquidity such previously earlier will during we part we disruption, summer as purchase put hand As on the global our through anticipated.

issuing of September of leaving As equitized maturity on previously a loan debt our the majority XX High loan million Trail terms under debt mentioned, we the by XXXX. X.X the April the million in bullet $XX approximately shares with in agreement, of

of as our with all compliance We are XX. in covenants September

to by us visibility we disruptions, are results. chain diminished our these the We temporary, forecast and be to caused our continue believe impacted that issues ability COVID-XX to have and supply global they and

as will the been is and has our million. resume very will strongest supply a We improves. said third we In our the visibility the fourth have environment. closing, closer comparables revenues our disruptions, quarter, guidance giving global difficult that, quarter quarter $XX chain impacted to uniquely fourth year-over-year as Having believe against COVID-XX difficult soon our business in are and by figures

to in continue products organic our bestsellers stated, Amazon. the of previously As some be

related strong and very confident on is and the in acutely brand to pressure direct to have chain We help taken key believe the portfolio. us product brands well, are their supply and performed a The help actions towards back us will this Overall, we have remain current have through We navigate different and to disruption. and progress future products our us we global organic environment profitability. the profitability continue successes. for acquired

contribution which Company disclosed to and QX would assuming example, in EBITDA the For figure. our believe not similar, prior its normative we with year's be than if the achieved future believes the XXXX adjustments, typical better, be XXXX adjusted still margins,

Although been With and we business, questions. Aterian the importantly, the our dedicated supply the and one, industry. in be the impacted hard-working most a be open disruptions, and products, to to of both network; the will that globe. that, of organic across operator overcome our Together, confident it pandemic leader logistics to global and turn and I'll to continue people we these we've challenges chain we continue have COVID-XX by technology, our believe proud our call acquired; we're related built; our to very proud and our

Operator

of Brian line Nagel question Instructions] [Operator first the from Your from comes Oppenheimer.

Brian Nagel

versus or a rebound business the here. I a in couple quarter look, So nice the of of rebound the third here mean, QX. a beginning questions

not recognizing question the stabilize guidance. last the trajectory should months, of about But official first think have, on a you're even giving to few the just actions we've weeks and I the lot I mean several how internal year-end? continued seen heels of here, the taken given rebound the the you've business into over we So

Yaniv Sarig

general, stabilization I chains convinced storm we're understand ranges, to is another before the storm is The quarter I'll right? -- think other, business Again, the stable, mean, last I supply going the speak months as a that in hard extremely any question. that we're well, we've bit taken still everything swan with completely healthy we just but But here coming. happy another and me just not of still time we that could for I it look, to about as a right? it's that probably that, as thanks believe, what be be to well type that stabilization other a last back a we're possible. worked Brian, of to done through in the will possible think the Yes. wave bringing place their and get passes, to in there a our all also. and time. happen there's to to revert bit power convinced COVID to cost the think the really until little that get control gone, over in matter right? of unbeknownst that completely this potential could black little is So as of general, I being I events Arty to happen, and [few] measure right? breath that while We're holding it everyone kind and we've I'll think possibly And impact storm can is wave, have, we can where every was

add approached you just growth, a this? -- caution future to ground and right? do to that's the this of ping more up so want Arty, with And we lot for

Arturo Rodriguez

said mentioned think, Yes. typically in -- there third is strongest our I Brian, I And is I what think QX I quarter.

a see little a bit always you step-down QX. from of So

think in of a see we I kind So listen, of pointed we aspects, in has a how front QX with few just a and in our quarter timing think, the the range softer of Solutions, said, ingested in sense to. Smash because that what CM of Healing sorry, first in what and very you'll from I maybe some containers, It's excited revenue this with previous than season lower of we're little others. But our timing. season goods we And bit holiday XXs, us. a of saw Christmas still --

that still the it's to through So season we're going we're though going even storm. a still very be good optimistic

Brian Nagel

of talking and What a Okay, a issues those. follow-up are supply in that's I of shipping COVID navigated perspective? has least mostly impacting you the here consumers the bigger to we where or helpful. demand least we're And you're costs just That's the in from there pulling of at or from consumer, As United mean kind States, look generally question. trend, then and lately online-only crisis, picture seeing this some more also nature. successfully through as you stores. at across trend, the are how some returning the away players. about been type But chain

you supply -- perspective? behind are all a seeing what the from seeing chain, are So what demand you

Yaniv Sarig

Brian, the question. for thank you

of complicated to of at lot not with growing to convinced the are different at see at from so terms we're right? and growth well the long very happens of right? level, in a and the benefit and that factors our there's also changing going starting, right? of there any going here. that believe take to sooner. In positioned a general, is e-commerce look just marathon the of lot we're term, it's term, maybe perspective. that term, just account, recently, power in there's we've we're right, it's we are into I extremely categories. of it's direction the that a lot Overall, adoption perspective, think because seen, from a short If always stores some long blip broad not at our and subsidizing, in but play on acceleration between they from on that not to currents right, what think, travel, of plus scope easy continue the macro to look government that factors we in time waves but reopening, demand across nothing is are here radar, the has stop And e-commerce XXXX changed And Obviously, in the buying I the that

see I lot we that, think macro do But doing been term, longer a last can XXXX to be probably guess, we're And I of and different that if months. you I level and of but work on right, ourselves You'll behaviors don't again terms think do it's add set up that's the in for explained the how events. success I that anything the we've focusing, by on in few the want Arty, know the immediate. can the in best like I beyond.

Operator

question next from ROTH Koranda the Your line of comes from Matt Capital.

Mike Zabran

on Zabran for Mike Koranda. is Matt This

costs how go-forward those secured peaking think try on and So shipping And had you average competitive you XX,XXX. an competitive quarter, rates. shipping to help in out terms margin? about container are exactly you're terms Could in about what to now of pending cost guys quantify per rates those having basis, of highlighting last gross a us

Yaniv Sarig

Yes.

right we built that over how are. time this quarter. incredibly of piece we're very, this an been relationship about the although happy So lot of quite reasons. pay on for the what companies, these done talk helpful, to partners in on And we been the exactly it's a the we for and with that macro But sure competitive getting been I'm price tough other again, environment companies have believe we certain given share with very has helped level competitive they've us rates logistics side important

level again, say. because the recent prices satisfied tough for we're I so to of surrounding that paying, but share us macro we've very competitive numbers reasons, And events the us given all been with with, would really the are

Mike Zabran

also Got what of anticipate and FDA plan hand that's funds guys attack there on talk about the of amount source on go-forward Yes, basis? Could M&A sort it. your being and of you activity fair. restart cash a how thinking for your aggregation and of you're about you the given

Yaniv Sarig

Sure.

back but So has to think look, passed, type any on is Company I behind pending the storm I taken so us, side. event said completely its path say, go we to of earlier, as think growth right, mean, to we've I'd want foresee, right, we, the prepare we again, swan M&A worst black not can step yes, the the right believe I that the, the and on on

if right? chain. definitely a of amount that think on we and of of that that to investors, of and just the of remarks there the if interest of because, lot up But doubt. M&A, also and us look to Otherwise, are be for you I do on marathon, top stability that there What's a lot of by model, type right, lot lot on we'll one realize it deals. of been the for lot I as again us, right, to need do other can that my will And There's it the there of I of be storm, the sources if M&A, clarity I those that, the restored. as hope, affected is chain pounce opportunity, the also the a obviously, soon has of on comes obviously, I And that go the that it we of comes mentioned aggregator further, side to supply at the amount the chain other in crisis for on burden again, companies think those of to capital, excitement capital in companies when hopefully, the out deals look something will the believe that right? of then to is once context a try this. a the you earlier, think setting I ourselves no additional to that pursue gives stability the terms we're in investment at believe as overall, is to opportunities opportunities to supply think will the this, execute supply before good best passed of have I in to industry business consolidate community also us there's industry. I And execute this we have

Operator

Your of Brian next line comes Global Alliance from Partners. from Kinstlinger question the

Brian Kinstlinger

profitability we see quicker return to Great thought. all than

talk a maybe to of shipping getting Was the you it can much a down quarter? will the there Amazon? benefit through First, partners that be like the about terms And containers of profile in more benefit in you're the much of third impact because get turns? if that the to a that results line a inventory it in how better-than-expected of in as bigger or turning road the sense it's quarters trying was bottom much Is Just quickly? some for margin future. of

Yaniv Sarig

want you that? Yes. Arty, address to do

Arturo Rodriguez

that. the can days I these partners we rates to mind, gotten would over say that that bigger think keep the achieve Yaniv, a I taking impact great, with we've address And kind in. that's timing to deals who've it's of like as of been and just containers, been XXXX. approach in I XX the we've able Yes, that

So the reality is Rough today, January, until goods like something in aren't the right? math, from that. coming right, booking container

the and is towards a question. hope impacts the definitely, things XXXX. answers secured So that I focus we've that more of your

Brian Kinstlinger

better opens shipping curious, means great. yet. really for I That's mean, these were And you as so you. able containers, it It secure I'm up that you yes. without benefit that course, lower-priced did much Of then to

months in SKU strategy how the think and on from that longer containers? of launches. timing time or timing the context is might again that hold frame Or about the curious if launches on So SKU changes stabilize? shipping you I'm six to to economics better Do being think a management's three new it things now, in be

Yaniv Sarig

need It's very a getting timing can also not getting that price, when lot it meaningful right? around There's P&L, the all other have amount price the preserve And just that had. well, of about important factors to it business launching you go remember dollars are question. a to your to it's not of a stable launch still thing about complexities pretty time. and can into just That's that is the But the on is the great plan right? and that correctly, is goods to success does product Especially these a right? critical have the a effect. delays, model, going the you right, to P&L marketing and continuity And of having the important,

a And be I launch products. right, we're comfortable with comes other before as we at invest launching mentioned, that to lot so a as products we remarks, tests exceptions also in as to we way will there's it's just there, other that say looking it the But before feel right? that make to sense? the that previous and and you supply from in at really a too something stability materialize a There's geographies. coming expect, high to some you here that, expect back in because, Does once risky chains potential us go can to doesn't place meaningful said do of take beginning, level, time back see I'd going my in where should

Brian Kinstlinger

wrote and more, One I absolutely. not down I'm numbers the fast sure get Yes, then enough. queue. I'll in the back

containers are yourself either I think market inquiries components you've past, the touched because can want you about about have increase on the ahead too not able it. out. to as and price you But you to talked talk or far increasing don't trends? as get of the being the fast to prices pricing others In

forward. been about that six how you've So three to increases you the a, and achieve pricing to the able do maybe see last going Talk over months

Yaniv Sarig

of it's might the increasing think And think, explained, previous there, Yes. a getting that losing increase And spot business business, done pressure we market going competitors part we As margin losing It's what's around good as that. we've right, upward to prices, sensitivity that. and thing, for and I competitors, other the delicate it past, outprice need that starting in sustain well, say right? we've is done also is if to the that believe -- through sweet really performance able I inventory very news, very which of market we the another cost that we here we've dangerous which on can exactly a middle pricing to long-term ground kind at mentioned well, obviously share you you the and and longer in little bit market as very to question. storm obviously much the marketplace, our in seeing and good of share. your been is in to important where a getting We're that. versus and of enough also see the We overall, but predict happen. basis market our it's lower you're obviously kind the too to model. wanted without quite out find of around difficult much think overall, nothing can't not I we calls can finding But share, The margin have a hurt between just too is example,

things. a all taking well that out. quite terms on done navigating I of think somewhat we're in So conservative that But considered we've things view overall,

Operator

the from comes Victoria question next Davidson. from Your of line D.A. James

Victoria James

thoughts my your what additional structure? And So the needing to are your issue of past shares to current debt? we capital question down point pay are on is,

Yaniv Sarig

Yes.

on I'll us let Arty, So you thoughts why and Arty, end. a this? your you I'll more take the don't on that, give thoughts add maybe But few

Arturo Rodriguez

to work. Yes, million Yaniv. we our $XX covenant. We're in listen, Thanks, and compliance a of we're see down debt, lot with in

I of significant on debt, we're the we think time. That that, long-term continue profile and the something think us. work levels leverage these plan. equitization we'll continues think and we've I at debt improve our behind to update ways over the moves working if is made progress on be And That's and I we'll plan on said, on forward to to accordingly. And to debt move continue that. been

Operator

with from of question the the Fong next line to proceed BTIG. We'll Marvin

Marvin Fong

few I apologize. only a ago. minutes on hopped the call I

capital you of already, curious, M&A on could just side the the players. big perhaps you've Yaniv, some raising business. from seen We've Just expand mentioned of more it the

a that Potty. transaction business transactions. of And thoughts any part second Maybe be that you saw has about Squatty how to was and in earn-out that the an side been on might doing your the could of pipeline. by and of I question, earned us there recent other that Just terms update active you how

Yaniv Sarig

right that by, the right? chain of for of passes Company supply a Marvin, chance costs, performing not pause So is chain crisis definitely supply on the with Yes. there's the until given earlier, the on again. as see expect, so and M&A we right, we Thanks. that's now as is further now, we encumbering even pause. mentioned, pressure M&A also stability Yes, the storm Otherwise, by passes

about have I At because end you I are these great storm what the As to position world, winning think excitement lot lot crisis a companies. And M&A think is vision. capital we're be, a I And the being day, by more to create as removed as go because probably a the have best of a approach you equity different better approach. there, they're very mentioned, on companies the more to of market that of on. additional raised, to money, so the back of that's a other right, think, from will infrastructure continue the taken going to that in we're after has and us chain we believe and Aterian, benefiting And again I go the said, of lot of is are the private said that very itself in term, excited right, earlier execute the we and think of well, companies executing early-stage same acquisitions. going risk the the going out be going the side to battle-tested think in a I raising again, opportunities and more at other is supply experience, for been in as do long have the this I lot all on believe, well we're again, immense. mindset, to I And opportunities as the

right? if your had very of what's other And piece. on so And was Squatty piece That the soon will you market the side this we're on the tell as sorry, a second question strategy Potty, as right? second of very, and time on right. excited we're But reigniting M&A conditions permit,

that think level So to yes, given perspective, and really potential. earlier, the happy enormous performance continue the way for Again, hindered reasons But all the the there's that doing to and acquired macro with the different Squatty base term and it Smash, conditions the solve. brands grow to brands. we supply it. is Healing issues. our But issues well and doing by from continue we we'll happy has how to as Arty wanted, at quite that there the PPD also scale a long look bit not Potty in that about Solutions, and are things factors, with to with little we're acquisition. trying some quite invest well. Potty, right, really with And gone one that But overall, mentioned, we're happy has I the overall, Squatty continue when really is affect overall, think and all for the the all explained still obviously, different these we opportunity we acquisition enormous were believe as True again, mentioned we're chain

Marvin Fong

rest the questions of off-line. take my I'll Great.

Operator

[Operator Instructions]

Ilya Grozovsky

It looks on questions the like we have further line. no

wanted questions. it's This shareholder perks as few update have call. that for the they efforts. option at participants ask their to up to So on a have our can shareholder have relevant questions of us investors you, for your their sign questions for our which aterian.io/perks, recently Platform-as-a-Service I earnings management launched one Please the thank program, part asked. of looks I all and picked perks Yaniv. on loyalty like participants

Yaniv Sarig

side also the Service Ilya. potentially in a overall with oversized this earlier so that to specifically looking as look And to calls, to the in there. point, mentioned limited from going definitely of so continue to been business. larger few clients are And our the it. that said a transition definitely, the carrying we we'll around happy have solution to again, promise. at At still We think lot it. to focusing a of term, seller. have we brand products, results And invest Platform recently I but are this far, are in want we promising as continue it's I Thanks, vendor to point resources longer quite very are Yes, that earlier, doing as invest in brands

Ilya Grozovsky

Thanks.

came question that do outlook what you regions sales? most international what for Another in is interesting? was, And the find

Yaniv Sarig

Yes.

general, a lot definitely we'd to unfolds, crisis as I it's can like around for think to potential work of is affecting already supply even put U.S. but hopefully. amount chain where see probably also supply efforts hold that in we've big somewhat started something the Europe, that replicate But are world continue that But India, Europe general, And chain the expanding crisis world the Europe. with in because well, e-commerce as on is strategy. I of of we've in region our have top have China, the us. the opportunity beyond Japan, XXXX there potentially So markets of than that done, in priority the accelerate believe been we the those more into

focus term, we But in as the Europe. now, long these will look well. at is the on for So

Ilya Grozovsky

from the perks Great. resume price do program, to share certain And M&A? the last then level at question be you to need a

Yaniv Sarig

Yes.

and taking going we're and side, the On potentially look the at cautiously, about But be going at. that arise. deals, off when our potentially course, right? previously holding That's companies leveraging be large shares, something excited to seen general, of could We've right? if really to approach conditions in we opportunistic, are continue M&A point, we're smaller that this again, other we're this M&A

Ilya Grozovsky

side. the to for perks on the you thank all from us participants call the joining it And today. That's Great.

Annual terms the the with ROTH forward on calls. future look XX XXth Aterian calendar, December ends our will to This be X Annual and you in Valley participating on management XX. Conference, call. the XXth to of ROTH and Technology upcoming Conference We In November Deer speaking XX

you. Thank disconnect. now may You

Operator

concludes That call. participating. conference this Thank all for you

You now may disconnect.

Aterian (ATER) 9 Nov 212021 Q3 Earnings call transcript