Karat Packaging Inc. reported net sales of $124.5 million for the third quarter of 2025, a 10.4% increase compared to $112.8 million in the same quarter of the previous year. Gross profit decreased to $42.9 million from $43.5 million, with gross margin declining to 34.5% from 38.6% due to higher costs of goods sold related to elevated tariffs. Net income was $7.6 million, down from $9.3 million in the prior-year quarter, and net income margin decreased to 6.1% from 8.2%. Net income attributable to Karat was $7.3 million, or $0.36 per diluted share, compared to $9.1 million, or $0.45 per diluted share last year. Adjusted EBITDA was $13.1 million, compared to $14.7 million in the prior-year quarter, with an adjusted EBITDA margin of 10.5%, down from 13.0%. For the first nine months of 2025, net sales rose 9.7% to $352.1 million and net income increased 2.0% to $25.5 million. The company reported income from subleasing its City of Industry warehouse, which began in April 2024. Other income for the third quarter increased to $1.3 million, primarily due to gains from foreign currency transactions.