PETMED EXPRESS INC
For the period ended Dec 31, 2025. Filed Feb 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 5, 2026
PETS$1.22-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-12-19.
0001040130-25-000108
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001040130-26-000007
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 79 current paragraphs.
49 unchanged; 24 reworded; 6 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
During the first quarter of our fiscal year ending 2026, because of the triggering events the Company performed the quantitative test which resulted in additional impairment related to the PCRx trade name of $0.6 million, due to a reduction in actual and forecasted revenues. During the third quarter of fiscal year 2026, there was no impairment triggering event identified.
Current report
(2) Included in interest expense (income), net is $0.4 million of interest expense related to the sales tax liability and $0.2 million of interest income for the three months ended December 31, 2025. Included in interest expense (income), net is $0.4 million of interest expense related to the sales tax liability and $0.5 million of interest income for the three months ended December 31, 2024.
Current report
(2) Included in interest expense (income), net is $1.5 million of interest expense related to the sales tax liability and $0.8 million of interest income for the nine months ended December 31, 2025. Included in interest expense (income), net is $1.2 million of interest expense related to the sales tax liability and $1.5 million of interest income for the nine months ended December 31, 2024
Current report
General and administrative expenses increased by approximately $1.4 million, or 13.1%, to approximately $12.2 million for the quarter ended December 31, 2025, from approximately $10.8 million for the quarter ended December 31, 2024. General and administrative expenses increased by approximately$13.2 million, or 50.3%, to approximately $39.3 million for the nine months ended December 31, 2025, from approximately$26.2 million for thenine months ended December 31, 2024.
Current report
The increase to general and administrative expenses for the quarter ended December 31, 2025 was mainly due to a $2.0 million increase in professional fees, a $0.4 million increase in enterprise business system related expenses, offset by a $0.2 million decrease in bank service fees, a $0.2 million decrease in payroll severance and a $0.6 million decrease in other general and administrative expenses.
Current report
As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, on October 7, 2025, the Company publicly reported the conclusion of the previously disclosed investigation by the Audit Committee of the Company’s Board of Directors. Total costs incurred in connection with the investigation through the nine months ended December 31, 2025, were approximately $4.5 million, consisting of $3.3 million of legal and professional fees and $1.2 million of severance-related costs. These amounts were recorded within general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company does not expect to incur additional material costs related to the investigation.
Removed paragraphs (1)
Previous report
General and administrative expenses increased by approximately $3.7 million, or 35.1%, to approximately $14.2 million for the quarter ended September 30, 2025, from approximately $10.5 million for the quarter ended September 30, 2024. General and administrative expenses increased by approximately$11.8 million, or 76.5%, to approximately $27.1 million for the six months ended September 30, 2025, from approximately$15.4 million for thesix months ended September 30, 2024.The increase to general and administrative expenses for the quarter ended September 30, 2025 was mainly due to a $2.3 million increase in professional fees, of which$2.1 million were related to the whistleblower investigation, a$0.4 million decreasein payroll and payroll related expenses, offset by$0.9 million increase from payroll severance, $1.2 million increase in other general and administrative expenses related to Illinois sales tax settlement gain in thequarter ended September 30, 2024, offset by a$0.3 million decreasein bank service fees.
Reworded paragraphs (24)
Previous wording
As described in the explanatory note in Note 1 to unaudited condensed consolidated financial statements, we have restated our consolidated financial statements and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Affected Periods.
Current wording
As described in the explanatory note in Note 1 to the unaudited condensed consolidated financial statements, we have restated our consolidated financial statements and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Affected Periods.
Previous wording
PetMed Express, Inc. and subsidiaries, d/b/a PetMeds®, and PetCareRx, Inc. is a leading nationwide direct-to-consumer pet pharmacy and online provider of prescription and non-prescription medications, foods, supplements, supplies and vet services for dogs, cats and horses. PetMeds markets and sells directly to consumers through its websites, toll-free numbers, and mobile application. We offer consumers an attractive alternative for obtaining pet medications, foods, and supplies in terms of convenience, price, speed of delivery, and valued customer service.
Current wording
PetMed Express, Inc. and subsidiaries, d/b/a PetMeds®, and PetCareRx, Inc., a subsidiary of PetMed Express Inc., d/b/a PetCareRx® (collectively, the “Company”), is a leading nationwide direct-to-consumer pet pharmacy and online provider of prescription and non-prescription medications, foods, supplements, supplies and partner with providers to offer various vet services for dogs, cats and horses. PetMeds markets and sells directly to consumers through its websites, toll-free numbers, and mobile application. We offer consumers an attractive alternative for obtaining pet medications, foods, and supplies in terms of expertise, convenience, price, speed of delivery, and valued customer service.
Previous wording
Presently, our product line includes approximately 6,000 of the most popular pet medications, health products, food and supplies for dogs, cats, and horses.
Current wording
Presently, our product line includes approximately 7,200 of the most popular pet medications, health products and food for dogs, cats, and horses.
Previous wording
We market our products through national advertising campaigns which aim to increase the recognition of the “PetMeds®” brand name, and "PetCareRx" brand name, increase traffic to our websites atwww.petmeds.com andwww.petcarerx.com, acquire new customers, and maximize repeat purchases. Our sales consist of products sold mainly to retail consumers. The average purchase was approximately $98 and $96 for the quarters ended September 30, 2025, and September 30, 2024, respectively.
Current wording
We market our products through national advertising campaigns which aim to increase the recognition of the “PetMeds®” brand name, and "PetCareRx" brand name, increase traffic to our websites atwww.petmeds.com andwww.petcarerx.com, acquire new customers, and maximize repeat purchases. Our sales consist of products sold mainly to retail consumers. The average purchase was approximately $97 for both the quarters ended December 31, 2025, and December 31, 2024.
Previous wording
During the three months ended June 30, 2025, the Company identified triggering events for the Company’s long-lived asset group. These triggering events included a downward revision to the Company’s forecast and a decrease in the Company’s market capitalization which fell below the Company’s carrying value for a sustained period beginning in the fourth quarter of fiscal 2025. As a result of the identified triggering events, the Company performed a recoverability test for the identified long-lived asset group. The undiscounted cash flow projections were based on estimates made by management of current and future strategic and operational plans and future financial performance projected using various assumptions regarding revenues, gross profits, operating expenses, and working capital through the remaining useful life of the primary asset in the asset group. The results of the test indicated that the carrying amounts for the long-lived asset group were expected to be recoverable.
Current wording
During the three months ended June 30, 2025, the Company identified triggering events for the Company’s long-lived asset group. These triggering events included a downward revision to the Company’s forecast and a decrease in the Company’s market capitalization which fell below the Company’s carrying value for a sustained period beginning in the fourth quarter of fiscal 2025. As a result of the identified triggering events, the Company performed a recoverability test for the identified long-lived asset group. The undiscounted cash flow projections were based on estimates made by management of current and future strategic and operational plans and future financial performance projected using various assumptions regarding revenues, gross profits, operating expenses, and working capital through the remaining useful life of the primary asset in the asset group. The results of the test indicated that the carrying amounts for the long-lived asset group were expected to be recoverable. During the third quarter of fiscal year 2026, there was no impairment triggering event identified.
Previous wording
In accordance with ASC 820, Fair Value Measurement, the fair value measurement for the goodwill impairment is categorized as a Level 3 fair value measurement. This is due to the significant unobservable inputs used in the valuation, including the forecasted revenues, discount rate, and terminal growth rate, which require significant management judgment and estimation.
Current wording
In accordance with ASC 820, Fair Value Measurement, the fair value measurement, on a non-recurring basis, for the goodwill and trade name impairments are categorized as a Level 3 fair value measurement. This is due to the significant unobservable inputs used in the valuation, including the forecasted revenues, discount rate, and terminal growth rate, which require significant management judgment and estimation.
Previous wording
Three Months Ended September 30, 2025 Compared With Three Months Ended September 30, 2024 and Six Months Ended September 30, 2025 Compared With September 30, 2024
Current wording
Three Months Ended December 31, 2025 Compared With Three Months Ended December 31, 2024 and Nine Months Ended December 31, 2025 Compared With December 31, 2024
Previous wording
Sales decreased by approximately$13.7 million, or 23.6%, to approximately $44.4 million for the quarter ended September 30, 2025, compared to approx imately$58.0 million for the quarter ended September 30, 2024. Sales decreased by approximately $28.7 million, or 23.1%, to approximately $95.5 million for the six months ended September 30, 2025, compared to approx imately$124.3 million for thesix months ended September 30, 2024. The decrease in sales for the quarter ended andsix months ended September 30, 2025 was primarily driven by a reduction in gross advertising, higher consumer promotional usage, and a decline in prescription medication sales.
Current wording
Sales decreased by approximately $11.3 million, or 21.7%, to approximately $40.7 million for the quarter ended December 31, 2025, compared to approximately $52.0 million for the quarter ended December 31, 2024. Sales decreased by approximately $40.0 million, or 22.7%, to approximately $136.2 million for the nine months ended December 31, 2025, compared to approx imately$176.2 million for thenine months ended December 31, 2024. The decrease in sales for the quarter ended and nine months ended December 31, 2025 was primarily driven by a decline in prescription medication sales and higher consumer promotional usage.
Previous wording
Reorder sales decreased by approximately $11.3 million, or 23.2%, to approximately $37.4 million for the quarter ended September 30, 2025, compared to approximately $48.7 million for the quarter ended September 30, 2024. Reorder sales decreased by approximately $22.8 million, or 22.5%, to approximately $78.7 million for the six months ended September 30, 2025, compared to approximately $101.5 million for the six months ended September 30, 2024. The decrease in reorder sales for the three and six months ended September 30, 2025 is primarily due to a decline in prescription medication sales.
Current wording
Reorder sales decreased by approximately $10.2 million, or 23.0%, to approximately $34.0 million for the quarter ended December 31, 2025, compared to approximately $44.2 million for the quarter ended December 31, 2024. Reorder sales decreased by approximately $33.0 million, or 22.6%, to approximately $112.7 million for the nine months ended December 31, 2025, compared to approximately $145.7 million for the nine months ended December 31, 2024. The decrease in reorder sales for the three and nine months ended December 31, 2025 is primarily due to a decline in prescription medication sales.
Previous wording
New order sales decreased by approximately $1.9 million or 26.5%, to approximately $5.3 million for the quarter ended September 30, 2025, compared to $7.3 millionfor the quarter ended September 30, 2024. New order sales decreased by approximately $4.8 million or 26.0%, to approximately $13.6 million for the six months ended September 30, 2025, compared to $18.3 millionfor thesix months ended September 30, 2024.The decrease for thethree and six months ended September 30, 2025 in new order sales is primarily due to decreased and less efficient variable marketing spend.
Current wording
New order sales decreased by approximately $0.9 million or 15.5%, to approximately $5.0 million for the quarter ended December 31, 2025, compared to $6.0 million for the quarter ended December 31, 2024. New order sales decreased by approximately $5.7 million or 23.4%, to approximately $18.6 million for the nine months ended December 31, 2025, compared to $24.3 million for the nine months ended December 31, 2024. The decrease for the quarter ended December 31, 2025 in new order sales is primarily due to less efficient variable marketing spend. The decrease for the nine months ended December 31, 2025 in new order sales is primarily due to decreased and less efficient variable marketing spend.
Previous wording
We acquired approximately 58,000 new customers for the quarter ended September 30, 2025 compared to approximately 77,000 new customers for the quarter ended September 30, 2024. We acquired approximately 143,000 new customers for the six months ended September 30, 2025 compared to approximately 197,000 new customers for six months ended the September 30, 2024. The following tables illustrates revenue by various revenue classifications:
Current wording
We acquired approximately 59,000 new customers for the quarter ended December 31, 2025 compared to approximately 63,000 new customers for the quarter ended December 31, 2024. We acquired approximately 202,000 new customers for the nine months ended December 31, 2025 compared to approximately 260,000 new customers for nine months ended the December 31, 2024. The following tables illustrate revenue by various revenue classifications:
Previous wording
The Company changed the definition of a new order sale on July 1, 2024, to include sales from customers who have not previously ordered from the Company over the past twelve months compared to the prior definition which was thirty-six months. The reorder and new order sales amounts for the three and six months ended September 30, 2025, and the reorder and new order sales amounts for the three and six months ended September 30, 2024 reflect this new definition.
Current wording
The Company changed the definition of a new order sale on July 1, 2024, to include sales from customers who have not previously ordered from the Company over the past twelve months compared to the prior definition which was thirty-six months. The reorder and new order sales amounts for the three and nine months ended December 31, 2025, and the reorder and new order sales amounts for the three and nine months ended December 31, 2024 reflect this new definition.
Previous wording
Under the previous definition of a new customer, reorder and new order sales were $52.7 million and $3.3 million, respectively, for the three months ended September 30, 2024. Under the previous definition of a new customer, reorder and new order sales were $111.1 million and $8.7 million, respectively, for the six months ended September 30, 2024.
Current wording
Under the previous definition of a new customer, reorder and new order sales were $47.0 million and $3.1 million, respectively, for the three months ended December 31, 2024. Under the previous definition of a new customer, reorder and new order sales were $158.1 million and $11.8 million, respectively, for the nine months ended December 31, 2024.
Previous wording
Recurring net sales, which includes AutoShip & Save subscriptions, and membership revenue, as a percentage of total gross sales was 60.8% for the most recent quarter ended September 30, 2025, up from 53.4% for the same period last year.
Current wording
Recurring net sales, which includes AutoShip & Save subscriptions, and membership- related revenue, as a percentage of total gross sales was 61.5% for the most recent quarter ended December 31, 2025, up from 56.2% for the same period last year.
Previous wording
Cost of sales decreased by approximately$7.3 million, or 18.6%, to approximately $31.9 million for the quarter ended September 30, 2025, from approximately $39.3 million for the quarter ended September 30, 2024. Cost of sales decreased by approximately $17.7 million, or 20.5%, to approximately $68.7 million for the six months ended September 30, 2025, from approximately $86.4 million for the six months ended September 30, 2024. Cost of sales, as a percentage of sales, was 72.0% for the quarter ended September 30, 2025, compared to 67.7% for the quarter ended September 30, 2024. Cost of sales, as a percentage of sales, was 71.9% for the six months ended September 30, 2025, compared to 69.6% for the six months ended September 30, 2024. The year over year increase for cost of sales, as a percentage of sales for thethree and six months ended September 30, 2025 compared to thethree and six months ended September 30, 2024 was primarily due to higher discount activity and higher freight costs.
Current wording
Cost of sales decreased by approximately $4.6 million, or 12.9%, to approximately $31.2 million for the quarter ended December 31, 2025, from approximately $35.8 million for the quarter ended December 31, 2024. Cost of sales decreased by approximately $22.3 million, or 18.3%, to approximately $99.9 million for the nine months ended December 31, 2025, from approximately $122.3 million for the nine months ended December 31, 2024. Cost of sales, as a percentage of sales, was 76.7% for the quarter ended December 31, 2025, compared to 69.0% for the quarter ended December 31, 2024. Cost of sales, as a percentage of sales, was 73.4% for the nine months ended December 31, 2025, compared to 69.4% for the nine months ended December 31, 2024. The three and nine months ended December 31, 2025 includes the impact of the inventory write-down (see Note 2 for additional information). The year over year increase for cost of sales, as a percentage of sales for the three and nine months ended December 31, 2025 compared to the three and nine months ended December 31, 2024 was primarily due to the impact of the inventory write-down and higher promotional usage.
Previous wording
Gross profit decreased by approximately $6.4 million, or 33.9%, to approximately $12.4 million for the quarter ended September 30, 2025, from approximately $18.8 million for the quarter ended September 30, 2024. Gross profit decreased by approximately $11.0 million, or 29.1%, to approximately $26.8 million for the six months ended September 30, 2025, from approximately $37.8 million for the six months ended September 30, 2024. The gross profit decreases for the quarter and six months ended September 30, 2025 compared to the quarter ended and six months ended September 30, 2024 were primarily due to lower sales and higher cost of sales. The gross margin percentage decreased by approximately 4.4%, to approximately 28.0% for the quarter ended September 30, 2025, from approximately 32.3% for the quarter ended September 30, 2024, primarily due to higher freight costs and higher consumer promotional usage. The gross margin percentage decreased by approximately 2.4%, to approximately 28.1% for the six months ended September 30, 2025, from approximately 30.4% for the six months ended September 30, 2024, primarily due to higher consumer promotional usage and higher freight cost.
Current wording
Gross profit decreased by approximately $6.7 million, or 41.4%, to approximately $9.5 million for the quarter ended December 31, 2025, from approximately $16.1 million for the quarter ended December 31, 2024. Gross profit decreased by approximately $17.7 million, or 32.8%, to approximately $36.3 million for the nine months ended December 31, 2025, from approximately $53.9 million for the nine months ended December 31, 2024. The gross profit decreases for the quarter and nine months ended December 31, 2025 compared to the quarter ended and nine months ended December 31, 2024. The gross margin percentage decreased by approximately 7.8%, to approximately 23.3% for the quarter ended December 31, 2025, from approximately 31.0% for the quarter ended December 31, 2024. The gross margin percentage decreased by approximately 4.0%, to approximately 26.6% for the nine months ended December 31, 2025, from approximately 30.6% for the nine months ended December 31, 2024. The decrease in gross profit and gross margin percentage for the three and nine months ended December 31, 2025 compared to the three and nine months ended December 31, 2024 were primarily due to the impact of the inventory write-down, higher consumer promotional usage and lower sales.
Previous wording
The increase to general and administrative expenses for the six months ended September 30, 2025 was primarily due to a $8.5 million increase in stock-based compensation expense, primarily related to reduced stock compensation associated with an executive departure for the six months ended September 30, 2024 , a $3.2 million increase in professional fees, of which$3.1 million were related to the whistleblower investigation, a $1.7 million decrease in payroll and payroll related expenses, offset by$0.9 million increase from payroll severance, $1.2 million increase in other general and administrative expenses related to Illinois sales tax settlement gain in the six months ended September 30, 2024, offset by a 0.3 million decrease in other general and administrative expenses.
Current wording
The increase to general and administrative expenses for the nine months ended December 31, 2025 was primarily due to a $8.3 million increase in stock-based compensation expense primarily associated with executive departures, a $5.1 million increase in professional fees, of which$3.2 million were related to the whistleblower investigation, a$1.1 million increase in enterprise business system related expenses, a$0.7 million increase from payroll severance, $1.3 million increase in other general and administrative expenses primarily related to Illinois sales tax settlement gain in the nine months ended December 31, 2024, offset by a $1.7 million decrease in payroll and payroll related expenses, $1.0 million decrease in bank services fees, and $0.5 million decrease in other general and administrative expenses.
Previous wording
Advertising expenses decreased by approximately $1.7 million, or 28.5%, to approximately $4.3 million for the quarter ended September 30, 2025, from approximately $6.1 million for the quarter ended September 30, 2024. Advertising expenses decreased by approximately $3.7 million, or 26.5%, to approximately $10.4 million for the six months ended September 30, 2025, from approximately $14.1 million for the six months ended September 30, 2024 The decrease for the quarter ended andsix months ended September 30, 2025 can be mainly attributed to lower gross media spend. As a percentage of sales, advertising expense was 9.8% and 10.5% for the quarters ended September 30, 2025 and 2024, respectively. As a percentage of sales, advertising expense was 10.9% and 11.4% for six months ended September 30, 2025 and 2024, respectively. The advertising percentage may fluctuate quarter to quarter due to seasonality and advertising availability.
Current wording
Advertising expenses increased by approximately $1.1 million, or 26.7%, to approximately $5.3 million for the quarter ended December 31, 2025, from approximately $4.2 million for the quarter ended December 31, 2024. The increase for the quarter ended December 31, 2025 can mainly be attributed to higher gross media spend. Advertising expenses decreased by approximately $2.6 million, or 14.2%, to approximately $15.7 million for the nine months ended December 31, 2025, from approximately $18.3 million for the nine months ended December 31, 2024. The decrease for the nine months ended December 31, 2025 can be mainly attributed to lower gross media spend. As a percentage of sales, advertising expense was 13.1% and 8.1% for the quarters ended December 31, 2025 and 2024, respectively. As a percentage of sales, advertising expense was 11.5% and 10.4% for nine months ended December 31, 2025 and 2024, respectively. The advertising percentage may fluctuate quarter to quarter due to seasonality and advertising availability.
Previous wording
The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $75 for the quarter ended September 30, 2025 compared to $79 for the quarter ended September 30, 2024. The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $73 for the six months ended September 30, 2025 compared to $72 for the six months ended September 30, 2024. The decrease to customer acquisition costs for the quarter ended September 30, 2025, was due to a more efficient variable marketing spendand a higher proportion of spending funded by third party partners. The increase to customer acquisition costs for the six months ended September 30, 2025, was due to a less efficient variable marketing spend. The advertising cost of acquiring a new customer can be impacted by the advertising environment, the effectiveness of our advertising creative, spending, and price competition. Historically, the advertising environment fluctuates due to supply and demand. A more favorable advertising environment may positively impact future sales, whereas a less favorable advertising environment may negatively impact future sales.
Current wording
The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $90 for the quarter ended December 31, 2025 compared to $66 for the quarter ended December 31, 2024. The advertising costs of acquiring a new customer, defined as total advertising costs divided by new customers acquired, was $78 for the nine months ended December 31, 2025 compared to $70 for the nine months ended December 31, 2024. The increase to customer acquisition costs for the quarter and nine months ended December 31, 2025, was due to less efficient variable marketing spend. The advertising cost of acquiring a new customer can be impacted by the advertising environment, the effectiveness of our advertising creative, spending, and price competition. Historically, the advertising environment fluctuates due to supply and demand. A more favorable advertising environment may positively impact future sales, whereas a less favorable advertising environment may negatively impact future sales.
Previous wording
Depreciation and amortization expense was $2.3 million and $1.7 million for the quarters ended September 30, 2025 and September 30, 2024, respectively. Depreciation and amortization expense was $4.6 million and $3.4 million for the six months ended September 30, 2025 and September 30, 2024, respectively.
Current wording
Depreciation and amortization expense was $2.4 million and $1.6 million for the quarters ended December 31, 2025 and December 31, 2024, respectively. Depreciation and amortization expense was $7.0 million and $5.0 million for the nine months ended December 31, 2025 and December 31, 2024, respectively.
Previous wording
Other income, net decreased to approximately $(0.1) million for the quarter ended September 30, 2025 compared to approximately $0.4 million for the quarter ended September 30, 2024. Other income, net decreased to approximately $(0.1) million for the six months ended September 30, 2025 compared to approximately $0.7 million for the six months ended September 30, 2024. The decrease to other income for the quarter andthe six months ended September 30, 2025 was due to lower invested balances, and higher interests expense accrual on sales tax liabilities. Interest income may decrease in the future based on several factors, including utilization of our cash balances on future investments or partnerships, or on our operating activities. Additionally, interest income could increase or decrease if the current interest rate environment changes.
Current wording
Other (expense) income, net decreased to approximately $(0.1) million for the quarter ended December 31, 2025 compared to approximately $0.2 million for the quarter ended December 31, 2024. Other (expense) income, net decreased to approximately $(0.2) million for the nine months ended December 31, 2025 compared to approximately $0.9 million for the nine months ended December 31, 2024. The decrease to other (expense) income for the quarter andthe nine months ended December 31, 2025 was due to lower invested balances, and higher interests expense accrual on sales tax liabilities. Interest income may decrease in the future based on several factors, including utilization of our cash balances on future investments or partnerships, or on our operating activities. Additionally, interest income could increase or decrease if the current interest rate environment changes.
Previous wording
For the quarters ended September 30, 2025 and 2024, the Company recorded an income tax provision of approximately $0.0 million and a tax benefit of approximately $1.4 million, respectively. For the six months ended September 30, 2025 and 2024, the Company recorded an income tax provision of approximately— and a tax benefit of approximately $0.4 million, respectively The increase in the tax provision for the three and six months ended September 30, 2025 is related to the cancellation of the former CEO’s performance stock units resulting in additional $8.7 million of income during the quarter. The effective tax rate for the quarter ended September 30, 2025 was approximately (0.1)%, compared to approximately (151.5)% for the quarter ended September 30, 2024. The effective tax rate for the three months ended September 30, 2025 differs from the statutory rate primarily as a result of the goodwill impairment and the Company maintaining a valuation allowance against the majority of our deferred tax assets.
Current wording
For the quarters ended December 31, 2025 and 2024, the Company recorded an income tax provision of approximately $11 thousand and a tax provision of approximately $0.5 million, respectively. For the nine months ended December 31, 2025 and 2024, the Company recorded an income tax provision of approximately $29 thousand and a tax provision of approximately $22 thousand, respectively The increase in the tax provision for the three and nine months ended December 31, 2025 is related to the cancellation of the former CEO’s performance stock units resulting in additional $8.7 million of income during the period. The effective tax rate for the quarter ended December 31, 2025 was approximately (0.1)%, compared to approximately (192.1)% for the quarter ended December 31, 2024. The effective tax rate for the three months ended December 31, 2025 differs from the statutory rate primarily as a result of the goodwill impairment and the Company maintaining a valuation allowance against the majority of our deferred tax assets.
Previous wording
Our working capital at September 30, 2025 and March 31, 2025 was $2.8 million and $16.1 million, respectively. The $13.3 million decrease in working capital was attributable to the $19.4 million decrease in current assets, primarily cash, which were partially offset by the $6.1 million decrease in current liabilities, primarily accounts payable and deferred revenue. Net cash used in operating activities was $14.4 million for the six months ended September 30, 2025, compared to cash used in operating activities of $1.1 million for the six months ended September 30, 2024. The $13.3 million decrease in cash provided by operating activities is due to the $48.8 million decrease in net income reduced by $10.2 million of non-cash operating adjustments and partially offset by the $2.0 million decrease in current liabilities net of current assets excluding cash. Net cash used in investing activities was $3.9 million for the six months ended September 30, 2025, compared to $1.9 million used in investing activities for the six months ended September 30, 2024. Net cash used in financing activities was $261 thousand and $0.2 million for the six months ended September 30, 2025 and the six months ended September 30, 2024, respectively.
Current wording
Our working capital at December 31, 2025 and March 31, 2025 was $6.3 million and $16.1 million, respectively. The $22.4 million decrease in working capital was attributable to the $30.4 million decrease in current assets, primarily cash, which were partially offset by the $8.0 million decrease in current liabilities, primarily accounts payable and deferred revenue. Net cash used in operating activities was $23.7 million for the nine months ended December 31, 2025, compared to cash used in operating activities of $2.3 million for the nine months ended December 31, 2024. The $21.4 million decrease in cash used in operating activities is due to the $58.6 million decrease in net income reduced by $39.5 million of non-cash operating adjustments and partially offset by the $2.3 million decrease in current liabilities net of current assets excluding cash. Net cash used in investing activities was $3.9 million for the nine months ended December 31, 2025, compared to $2.7 million used in investing activities for the nine months ended December 31, 2024. Net cash used in financing activities was $0.3 million and $0.2 million for the nine months ended December 31, 2025 and the nine months ended December 31, 2024, respectively.
Previous wording
As of September 30, 2025, we had $0.8 million in outstanding lease commitments assumed as part of the PetCareRx acquisition for the leases on two buildings. Other than the foregoing leases, we are not currently bound by any material long-term or short-term commitments for the purchase or lease of capital expenditures. Any material amounts expended for capital expenditures would be the result of an increase in the capacity needed to adequately provide for any future increase in our business. To date we have paid for any needed additions to our capital equipment infrastructure from working capital funds and anticipate this being the case in the future. Our primary source of working capital is cash from operations. We presently have no alternative sources of working capital and have no commitments.
Current wording
As of December 31, 2025, we had $0.7 million in outstanding lease commitments assumed as part of the PetCareRx acquisition for the leases on two buildings. Other than the foregoing leases, we are not currently bound by any material long-term or short-term commitments for the purchase or lease of capital expenditures. Any material amounts expended for capital expenditures would be the result of an increase in the capacity needed to adequately provide for any future increase in our business. To date we have paid for any needed additions to our capital equipment infrastructure from working capital funds and anticipate this being the case in the future. Our primary source of working capital is cash from operations. We presently have no alternative sources of working capital and have no commitments.