Executive Summary / Key Takeaways

• Transformative Strategy: iPower is strategically shifting from a hydroponics-focused online retailer to a diversified, technology-driven e-commerce services provider, with its SuperSuite platform as the core growth engine, aiming for enhanced resilience and efficiency.
• SuperSuite Momentum: The SuperSuite platform is rapidly gaining traction, contributing approximately 20% of total revenue in fiscal Q3 2025 and offering a comprehensive, data-driven solution for supply chain management, logistics, and merchandising.
• Supply Chain Diversification & "Made in USA": The company is actively diversifying its manufacturing base beyond China into Southeast Asia and the U.S. through initiatives like the "Made in USA" module and the United Package NV LLC joint venture, aiming to mitigate geopolitical risks and optimize costs.
• Financial Resilience Amidst Headwinds: Despite a 23.15% revenue decline in FY2025 and a net loss, iPower has significantly reduced total debt by 43% to $3.6 million by March 31, 2025, and renewed its JPM credit facility, demonstrating a commitment to balance sheet strength.
• Emerging Opportunities: iPower is exploring new growth avenues, including expanding into new sales channels like Temu and TikTok Shop, researching AI applications for its platform, and announcing a digital asset strategy to leverage blockchain infrastructure.

A New Blueprint for Growth: iPower's E-Commerce Evolution

iPower Inc. (NASDAQ:IPW) is undergoing a significant strategic transformation, moving beyond its roots as an online retailer of consumer home, pet, garden, outdoor, and consumer electronics products to emerge as a technology and data-driven e-commerce services powerhouse. The company, which began as BZRTH, Inc. in 2018 and launched its e-commerce platforms Zenhydro.com and simpledeluxe.com, has steadily built a foundation in online retail. Its Nasdaq listing in May 2021 marked a pivotal moment, enabling further expansion through acquisitions like Global Product Marketing Inc. and E Marketing Solution Inc. in 2021, and Anivia Limited in 2022, which provided crucial procurement and logistics capabilities in China.

This evolution is set against a backdrop of a highly competitive and fragmented online retail landscape. While iPower has historically operated in the hydroponics niche, it is now strategically broadening its product categories to include "hard lines" such as home, pet, furniture, and electronics, where management sees more meaningful growth. The overarching strategy is to leverage its proprietary data formulas, in-house ERP systems, and Business Intelligence (BI) platforms to become a comprehensive services provider. This platform-centric approach aims to connect supply chains, logistics, merchandising, and potentially financial services, facilitating sales across diverse online and offline channels globally.

Technological Edge: SuperSuite and Beyond

At the heart of iPower's strategic pivot is its SuperSuite platform, a core technological differentiator designed to provide a "turnkey solution" for third-party brands and suppliers. This platform integrates critical functions across logistics, merchandising, and data analytics, empowering partners to scale faster, operate more efficiently, and adapt to evolving consumer demands. SuperSuite's capabilities are built on iPower's proprietary data-driven methodologies, which have been refined over years to effectively bring products to market and drive sales.

The tangible benefits of SuperSuite are becoming increasingly evident. In fiscal Q3 2025, SuperSuite accounted for approximately 20% of iPower's total revenue mix, a significant milestone underscoring its accelerating adoption. Management projects SuperSuite to become the company's "biggest growth driver" in the future, offering a seamless bridge between supply chain inputs and e-commerce execution. Further enhancing this technological moat, iPower is actively researching artificial intelligence (AI) applications to bolster SuperSuite's predictive analytics, automate routine processes, and facilitate smarter decision-making. This focus on AI is expected to drive greater efficiency across the supply chain, fostering stronger engagement between suppliers, internal teams, and partners.

Innovation extends to new modules and strategic initiatives. The "Made in USA" module, a cornerstone of SuperSuite, aims to establish resilient domestic manufacturing lines. This initiative provides comprehensive support, including legal and regulatory guidance, facility sourcing and setup, local labor sourcing, funding opportunities, and access to iPower's established sales and fulfillment network. The first full-scale implementation of this module is the United Package NV LLC joint venture, focused on domestic packaging material production, with its production line already delivered and initial orders confirmed. This move addresses the increasing global trend of reshoring for supply chain resilience, offering partners faster lead times and reduced logistics risk. Additionally, iPower has announced plans for a Digital Treasury Strategy, intending to acquire Bitcoin as a primary treasury reserve asset to enhance financial resilience and explore blockchain-related retail services, including cloud mining resale and hardware wallet distribution.

Financial Performance and Liquidity: A Path to Stability

iPower's financial performance in fiscal year 2025 reflects a period of strategic recalibration amidst challenging market conditions. For the fiscal year ended June 30, 2025, total revenues decreased by 23.15% to $66.14 million, down from $86.07 million in the prior year. This decline was primarily attributed to reduced promotional activity due to lower inventory levels and a significant decrease in Amazon orders, influenced by tariff uncertainties in the latter half of the fiscal year. Costs of goods sold also decreased by 22.53% to $37.15 million, driven by lower logistics service costs, decreased product sales, reduced freight, and effective supply chain management.

The gross profit ratio saw a slight decrease to 43.84% in FY2025 from 44.29% in FY2024, mainly due to increased logistics service costs. Operating expenses, however, showed an improvement, decreasing by 10.81% to $34.86 million. This reduction was largely due to a $4.80 million decrease in selling and fulfillment expenses, partially offset by a $0.50 million increase in general and administrative costs, which included a notable $1.20 million increase in allowance for credit losses and inventory reserves. Consequently, the net loss attributable to iPower Inc. widened to $4.97 million in FY2025, an increase of $3.44 million from the prior year.

Despite the net loss, iPower has demonstrated a strong commitment to strengthening its balance sheet and improving liquidity. Cash and cash equivalents stood at $2.01 million as of June 30, 2025, a decrease from $7.38 million a year prior, primarily due to cash used in operating, investing, and financing activities.

However, total debt has been significantly reduced, falling by 43% to $3.6 million by March 31, 2025, compared to $6.3 million as of June 30, 2024.

The company's secured revolving credit facility with JPMorgan Chase (JPM) was renewed, extending its maturity to November 2027 with a $15 million commitment and an accordion feature for up to $40 million, providing substantial financial flexibility. As of June 30, 2025, iPower had approximately $1.80 million in unused credit under this facility. While the company was in default due to covenant violations under its ABL facility as of June 30, 2025, management believes existing cash and cash flows will be sufficient for the next 12 months, with further improvements expected as supply chain operations normalize.

Competitive Landscape and Strategic Positioning

iPower operates in a highly competitive and fragmented market, facing rivals ranging from niche hydroponics specialists like Hydrofarm Holdings Group (HYFM) and GrowGeneration Corp. (GRWG) to larger e-commerce players with broader product offerings. Competitors often possess greater capital resources, more extensive facilities, and diverse product lines. However, iPower strategically leverages its core strengths to carve out a differentiated position.

The company's competitive advantages stem from its pricing strategy, inventory and product availability, and a strong focus on customer service. Its ability to distribute both in-house brands (iPower, Simple Deluxe) and third-party brands provides a comprehensive product offering. The convenience of its e-commerce platform and its prominent position as an Amazon supplier are also key strengths. Management views Amazon's observed trend of reducing 1P relationships with smaller vendors as a "market share opportunity" for iPower, given its strong execution on Amazon's metrics.

The SuperSuite platform is a significant competitive differentiator, offering a turnkey solution that rivals cannot easily replicate. This integrated approach to supply chain, logistics, and merchandising positions iPower as a leader in providing value-added services to emerging brands. The "Made in USA" module further strengthens this by addressing the growing demand for localized manufacturing, offering a unique value proposition in terms of faster lead times and reduced geopolitical risk. While the broader hydroponics market faces weak demand, iPower's shift to a multi-category focus and its technological platforms enable it to "fare better" than some competitors by efficiently moving quality products across various categories. The company's ongoing optimization of its supply chain, including diversification into Vietnam and other regions, aims to reduce costs and enhance competitiveness against rivals.

Outlook and Risk Considerations

Looking ahead, iPower's management is focused on disciplined capital allocation and building a more robust supply chain. The company anticipates a normalization of ordering patterns from its largest channel partners, returning to pre-COVID levels of "steady growth and steady inventory turnaround." The SuperSuite platform is expected to be the primary growth driver, increasing its share of overall revenue and enhancing profitability. Management targets gross margins in the "mid-to-high 40s," although they note that the SuperSuite model's different revenue recognition could impact reported gross margins if it takes off significantly. Benefits from new manufacturing locations in Southeast Asia and ongoing supplier optimization are expected to accrue in future quarters, leading to reduced production and logistics costs, improved margins, and more competitive pricing.

However, investors must consider several key risks. The company's heavy reliance on third-party platforms, particularly Amazon (AMZN) (82% of FY2025 revenue), exposes it to potential disruptions or unfavorable actions by these platforms. Geopolitical tensions, especially U.S.-China trade relations and potential tariffs, could significantly impact supply chains and increase costs. The nascent Digital Treasury Strategy, if fully implemented, introduces risks associated with holding volatile cryptocurrency assets. Furthermore, iPower's growth remains substantially dependent on the U.S. cannabis market, which is subject to inconsistent and rapidly changing laws and regulations, and remains illegal under federal law. The company has also identified material weaknesses in its internal controls over financial reporting, which could impact investor confidence. Finally, iPower faces Nasdaq delisting risk due to its common stock trading below the $1 minimum bid price, with an extension granted until December 29, 2025, to regain compliance.

Conclusion

iPower Inc. is at a pivotal juncture, actively transforming its business model to capitalize on the evolving e-commerce and supply chain landscape. The company's strategic pivot towards its SuperSuite platform, coupled with aggressive supply chain diversification and the innovative "Made in USA" initiative, positions it for long-term resilience and growth. While recent financial results reflect the challenges of this transition and broader market headwinds, the significant reduction in debt and the renewed credit facility underscore a commitment to financial stability.

The investment thesis hinges on iPower's ability to execute its technology-driven strategy, particularly the expansion and adoption of SuperSuite, and its success in localizing manufacturing. The company's technological leadership in data-driven e-commerce services and its proactive approach to emerging opportunities like AI and digital assets could create a sustainable competitive advantage. Investors should closely monitor the growth trajectory of SuperSuite, the impact of supply chain diversification on margins, and the company's ability to mitigate geopolitical and regulatory risks, particularly concerning its platform reliance and the nascent digital asset strategy.