2025 Guidance maintained: Sales of $28M to $32M, adjusted EBITDA of -$2M loss to $2M profit
Toronto, Ontario--(Newsfile Corp. - May 26, 2025) - American Aires Inc. (CSE: WiFi) (OTCQB: AAIRF) ("Aires" or the "Company"), a pioneer in advanced technology designed to optimize electromagnetic field (EMF) environments to support health and well-being, announces filing its unaudited Q1/2025 results on https://www.sedarplus.ca. Unless otherwise indicated, all dollar amounts are reported in Canadian dollars.
During the three months ended March 31, 2025, the Company's reported sales increased by 164% year-over-year, for a first quarter record of $5.38 million compared to combined sales of $2.04 million in the year ago quarter. The quarter's increase in reported sales was driven largely by the efficient deployment of scaled-up advertising and marketing budgets, which included strategic partnerships the Company entered into during 2024 with the UFC, the WWE, Canada Basketball, and high profile athletes, including NHL star John Tavares and NBA star RJ Barrett; to note, 2025 will mark the Company's first full year of leveraging its partnerships with UFC, WWE, and Canada Basketball. The quarterly performance extends the Company's multi-year trend of strong revenue growth through widening its user base, opening new market segments, and expanding its overall reach and brand name recognition. To date, Management is pleased with its ability to maintain the strong sales momentum created in late 2024 through the seasonally slow first quarter, which was a key part of the Company's overall strategy for 2025.
Cash as of March 31, 2025 was reported at $1.55 million, and Inventory was reported at $2.20 million. Continued investments in scaling up promotional efforts contributed to increased advertising and marketing expenses in Q1 (see details below), which resulted in an adjusted EBITDA loss reported at $1.56 million compared to a combined adjusted EBITDA loss of $0.88 million in the year ago quarter. Management anticipates adjusted EBITDA to improve over the coming quarters as the Company continues to realize incremental benefits from the partnerships mentioned above and from multiple line items that the Company has renegotiated to lower Aires' Cost of Goods, including lowered product and fulfillment costs.
Aires CEO, Josh Bruni, commented: "Delivering triple-digit revenue growth in Q1 is a clear signal that our strategy is working - and that our long-term investments are compounding. While we remain in an intentional investment phase, every move we're making is designed to build durable value - expanding our reach, deepening our impact, and setting the foundation for long-term profitability.
As Aires remains focused on shaping the future of environmental wellness, electromagnetic environments are finally being recognized as critical to human performance, comfort, and resilience [1,2]. The results we delivered in Q1 position Aires to continue leading this movement, unlocking new revenue streams, and accelerating toward profitability."
2025 Guidance Update
Taking into account the traditional seasonality of the Company's performance, where order volumes and sales generally increase progressively over Q2, Q3 and Q4, Management reconfirms 2025 guidance ranges announced on January 27, 2025, with the expectation of Sales in the $28 million to $32 million range and adjusted EBITDA in the range of a $2 million loss to a $2 million profit. As noted when Management first provided 2025 guidance, the Company has demonstrated consistent and substantial organic revenue growth over the past three years, with year-over-year increases of 128% in 2022, 79% in 2023 (using the combined Aires and HUCK non-IFRS revenue figures for 2023 - more detailed information is provided in the Annual 2024 MD&A), and 73% in 2024 (using the combined Aires and HUCK non-IFRS revenue figures for 2023). This historical performance provides the basis for the 2025 projection, with Management anticipating continued revenue growth in the 55% to 77% range. This range of revenue growth reflects the Company's strategic focus on optimizing operational efficiency to improve profitability while maintaining healthy growth rates. As the year progresses and additional data on the efficiency and performance of the Company's growth initiatives becomes available, the Company will revise these ranges if appropriate.
Advertising expenses have been the primary driver of organic revenue growth, with a strong correlation between increased spending and higher sales. While the Company sees advertising expenses increasing year-over-year in 2025, management's strategic focus on optimizing advertising efficiency, and profitability in general, is expected to lower the advertising expenses as a percentage of revenue. This assumption is based on management's expectation that existing marketing initiatives and partnerships (from late 2024) will yield higher efficiency over time and are expected to contribute positively to the advertising-expenses-over-revenues metric. Unlike previous years, the Company does not anticipate launching new high-profile and high-cost partnerships in 2025, which is expected to reduce the need for incremental advertising investment while still supporting revenue growth. Marketing expenses are expected to increase year-over-year, reflecting the high-profile partnerships the Company entered into in late 2024.
Lastly, management has initiated several cost-cutting measures which are expected to reduce cost of goods sold (through lower product costs, fulfillment costs and payment processing fees) and, as a result, improve gross margin percentage. Overhead expenses are expected to increase modestly with the overall increase in business activity.
Q1/2025 Financial Highlights
Reported sales increased by 164% year-over-year to a first quarter record of $5.38 million compared to combined sales of $2.04 million in the year ago quarter. Gross Profit increased 184% year-over-year to $3.48 million from $1.23 million in the year ago quarter, and Gross Margin percentage was reported at 65% versus 60% in the same period last year. The improvement in Gross Margin percentage was the combined result of multiple Company strategies, including realization of lowered products costs during the year based on higher purchasing volumes as well as reductions in certain fulfillment costs.
During the three months ended March 31, 2025, Advertising and Promotion expenses increased 122% year-over-year to $2.40 million and Marketing expenses saw an increase of 241% year-over-year to $1.89 million. The increase in Advertising expenses was consistent with Management expectations as the Company continued executing its full-year strategy focused on strong, high-double-digit sales growth and building Aires into a well-recognized brand in the EMF optimization segment. The Company has historically found strong advertising investment in Q1 is essential for continuing and building sales momentum following the seasonally strong holiday shopping in Q4, while also continuing to engage consumers to lay the foundation for the Company's progressive quarter over quarter sales growth over Q2, Q3 and Q4.
The increase in Marketing expenses was also consistent with Management expectations primarily due to the continued amortization of marketing partnership contracts such as with UFC, WWE, Canada Basketball and Minnesota Timberwolves. Q1/2024 did not include any of those partnerships as the Company entered into the aforementioned agreements in late 2024 and early 2025. The Company notes that the marketing partnerships it has developed, together with the ability to create and leverage related co-branded content for use in the Company's marketing strategy and campaigns, helped drive order volume and sales growth in Q1/2025. In addition, as the Company sought to diversify its marketing agency engagements to improve sales performance, two new marketing agencies were engaged during Q1/2025 while the Company was simultaneously ramping down its engagement with its previous marketing company during the quarter.
Table 1: Condensed Consolidated Interim Statements of Financial Position (Unaudited) (in Canadian Dollars)
Revenue
Q1 2025
Q1 2024
POP %
Sales
$
5,376,114
$
2,037,395
164%
Cost of sales
$
(1,894,942)
$
(811,865)
133%
Gross margin
$
3,481,172
$
1,225,529
184%
Gross margin %
65%
60%
Expenses
Advertising and promotion
$
(2,402,103)
$
(1,083,848)
122%
Marketing
$
(1,890,057)
$
(554,874)
241%
Office and general, rent and travel
$
(199,759)
$
(130,242)
53%
Consulting, salaries and benefits
$
(625,828)
$
(440,105)
42%
Legal and professional
$
(147,163)
$
(21,187)
595%
Share-based compensation
$
(79,578)
$
-
N/A
Interest charges
$
(115,849)
$
(44,882)
158%
Depreciation
$
(33,713)
$
(33,334)
1%
Net Income (Loss)
$
(2,012,879)
$
(1,082,942)
86%
Management reconciliation to non-GAAP measures
Net Income (Loss)
$
(2,012,879
)
$
(1,082,942
)
86%
Interest charges
$
115,849
$
44,882
158%
Depreciation
$
33,713
$
33,334
1%
Investor relations consulting
$
222,493
$
127,829
74%
Share-based compensation
$
79,578
$
-
N/A
Adjusted EBITDA
$
(1,561,245
)
$
(876,897
)
78%
About American Aires Inc.
American Aires Inc. is a Canadian-based nanotechnology company committed to enhancing well-being and environmental safety through science-led innovation, education, and advocacy. The company is selling a line of proprietary patented silicon-based resonator products that optimize electromagnetic field (EMF) environments to support health and well-being.* Aires' Lifetune products diffract EMF radiation emitted by consumer electronic devices such as cellphones, computers, baby monitors, and Wi-Fi, including the more powerful and rapidly expanding high-speed 5G networks. The Aires Certified SpacesTM (AiresCertifiedSpaces.com) standard is a set of protocols for implementing EMF modulation solutions to create authorized EMF-friendly spaces that support well-being in a tech-driven world. Aires is listed on the CSE under the ticker 'WiFi' and on the OTCQB under the symbol 'AAIRF'. Learn more at www.investors.airestech.com and airestech.com/blogs/emf-education.
*Note: Based on the Company's internal and peer-reviewed research studies and clinical trials. For more information please visit https://airestech.com/pages/tech.
This news release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under International Financial Reporting Standards including "Adjusted EBITDA" (termed "Non-IFRS measures"). Non-IFRS measures are used by management to assess the financial and operational performance of the Company. The Company believes that these Non-IFRS measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards, enable investors to evaluate the Company's operating results, underlying performance and prospects in a similar manner to the Company's management. As there are no standardized methods of calculating these Non-IFRS measures, the Company's approach may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these Non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards. The Corporation defines EBITDA as earnings before interest tax depreciation and amortisation. Adjusted EBITDA removes irregular and non-recurring items that distort EBITDA.
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding future financial position and financial measures, YoY sales growth in 2024, sales growth resulting from advertising and promotion expenses, marketing partnerships, international expansion, ability to attract US-based investors, efficiency and effectiveness of the Company's advertising model, future market position, growth, innovations, global impact, business strategy, achieving universal brand awareness and brand development, product adoption, use of proceeds, corporate vision, proposed acquisitions, strategic partnerships, joint ventures, 2024 being our best year ever, continuing our trajectory of revenue growth, relationships with athletes, celebrities and performers, the size and growth of the consumer market focused on wellbeing and EMF protection, strategic alliances and co-operations, budgets, cost and plans and objectives of or involving the Company. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "predicts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. A number of known and unknown risks, uncertainties and other factors may cause the actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company including, but not limited to, the impact of general economic conditions, industry conditions, the occurrence of force majeure events, developments and changes in laws and regulations, competitive factors, and dependence upon regulatory approvals. Certain material assumptions regarding such forward-looking statements may be discussed in this news release and the Company's annual and quarterly management's discussion and analysis filed at www.sedarplus.ca. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by securities laws.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The Shares have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States, or to or for the account or benefit of any person in the United States, absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any common shares in the United States, or in any other jurisdiction in which such offer, solicitation or sale would be unlawful. We seek safe harbour.
Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this news release.
