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Jun 30, 2025
Hydrofarm Q2 2025 Earnings Report
Hydrofarm posted a 28% revenue decline in Q2 2025 but improved cash flow and reduced expenses amid ongoing restructuring efforts.
Key Takeaways
Hydrofarm's Q2 2025 revenue dropped to $39.2 million due to industry headwinds and reduced demand for durable products. The company narrowed its net loss and delivered $1.4 million in free cash flow. Strategic cost-cutting and restructuring efforts continued to improve operational efficiency as Hydrofarm reaffirmed its full-year guidance.
Net sales fell to $39.2 million from $54.8 million YoY
Gross margin declined to 7.1% from 19.8% due to lower sales and restructuring
Adjusted EBITDA was $(2.3) million, down from $1.7 million in Q2 2024
Free cash flow reached $1.4 million despite continued industry softness
Forward Guidance
Hydrofarm reaffirmed expectations for improved margins and lower expenses in FY2025, supported by restructuring benefits, proprietary brand focus, and reduced inventory.
Positive Outlook
- Reaffirmed full-year improvement in adjusted gross margin
- Anticipates $3M+ in annual cost savings from restructuring
- Free cash flow expected to remain positive in second half of 2025
- Inventory reduction targeted for year-end
- Focused investment in proprietary brands to support margin growth
Challenges Ahead
- Persistent industry oversupply pressures sales volume
- Gross margin heavily impacted by restructuring costs
- Adjusted EBITDA turned negative YoY
- SG&A as a percentage of sales rose to 41.1%
Historical Earnings Impact
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Avg. Return Before/After Earnings
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