Hydrofarm Holdings Group, Inc. has released its financial results for the third quarter ended September 30, 2025.
The company reported net sales of $29.4 million, down from $44.0 million in the same quarter last year. Gross profit margin declined to 11.6% of sales from 19.4%, while adjusted gross profit margin fell to 18.8% from 24.3%. Selling, general, and administrative (SG&A) expenses decreased by 6.8%, and adjusted SG&A fell by 7.4%. Hydrofarm reported a net loss of $16.4 million compared to a $13.1 million loss a year ago. Adjusted EBITDA stood at negative $4.4 million, versus a small loss of less than $0.1 million last year.
Despite these declines, the company showed progress in cash management. Cash used in operations improved by $4.4 million, and free cash flow improved by $5.1 million compared to the same period last year.
Chief Executive Officer John Lindeman said the company achieved its strongest proprietary brand sales mix of 2025 during the quarter, reflecting its focus on higher-margin products. However, reduced manufacturing volumes negatively affected profit margins. To counter this, Hydrofarm plans to consolidate its two remaining U.S. manufacturing facilities over the next few quarters, which is expected to bring an additional $2 million in annual cost savings on top of the $3 million announced last quarter. The company also expects to realize another $4 million in annual savings through additional cost-control measures.
Lindeman emphasized that Hydrofarm has now achieved 13 consecutive quarters of year-over-year SG&A reductions and has made significant progress in restructuring its product portfolio and reducing inventory. "We are focused on what we can control," he said, "and will remain disciplined in managing costs while improving our proprietary brand performance and strengthening long-term value for our shareholders."
CEO transition
Hydrofarm also announced a leadership change. Effective December 1, 2025, Executive Chairman Bill Toler will return as Chief Executive Officer. Current CEO John Lindeman will remain with the company until that date to ensure a smooth transition.
Toler, who has served as Chairman since 2019 and previously led Hydrofarm as CEO until early 2025, expressed appreciation for Lindeman's leadership. "I want to thank John for his dedication and valuable contributions to Hydrofarm," said Toler. "I'm excited to return as CEO and remain fully committed to restoring the company to profitability and building on the progress we've made."
