Financial Performance - For the three months ended June 30, 2024, total revenue was $16,667,000, representing a 2% increase from $16,330,000 in the same period of 2023[190]. - Cost of revenue increased by 7% to $12,657,000 from $11,883,000, resulting in a gross profit of $4,010,000, down 10% from $4,447,000[191]. - Operating expenses surged by 457% to $20,430,000 compared to $3,670,000 in the prior year, leading to an operating loss of $16,420,000[191]. - Net loss attributable to shareholders was $14,821,000 for the three months ended June 30, 2024, a significant decline from a net income of $421,000 in the same period last year[191]. - The effective tax expense for the period was $1,091,000, compared to a tax benefit of $218,000 in the previous year, indicating a shift in tax liabilities[191]. - For the three months ended June 30, 2024, the company's consolidated revenue increased by $0.3 million or 2%, reaching $16.7 million compared to $16.3 million for the same period in 2023[194]. - The cost of revenue for the same period increased by $0.8 million or 7%, totaling $12.7 million, primarily due to a $1.6 million rise in employee compensation and benefits[195]. - Gross profit decreased by $0.4 million or 10%, resulting in a gross profit margin decline of 300 basis points, attributed to reduced business from project-based consulting[196][197]. - Selling, general and administrative expenses surged by $16.8 million or 457%, amounting to $20.4 million, driven by a $11.4 million increase in stock-based compensation[198]. - The company reported a net loss of $15.3 million for the three months ended June 30, 2024, raising concerns about its ability to continue as a going concern[205]. Cash Flow and Financing - Cash and cash equivalents stood at $4.2 million as of June 30, 2024, with positive cash flows totaling $2.1 million for the same period[208]. - Net cash provided by financing activities was $4.4 million, primarily from proceeds of a PIPE transaction[212]. - The company acquired approximately $8.7 million in cash following the Business Combination, but may face challenges in meeting future cash obligations[206]. - The company experienced a decrease of $1.8 million in net cash used in operating activities, primarily due to a decline in net income[211]. Operational Insights - Aeries had over 30 clients across various industries, including e-commerce, telecom, security, healthcare, and engineering, as of June 30, 2024[179]. - Aeries' operational performance is influenced by macroeconomic conditions, including inflation and geopolitical uncertainties, which have impacted business operations[181]. - The company focuses on digital transformation and leveraging AI to enhance operational efficiencies and drive innovation for clients[176]. - Aeries aims to maintain strong customer relationships to mitigate risks associated with potential contract terminations, which could significantly impact revenue[183]. Accounting and Estimates - The preparation of condensed consolidated financial statements requires estimates and assumptions that affect reported amounts of assets, liabilities, revenue, and expenses[217]. - Current assumptions, judgments, and estimates used in financial statements are deemed appropriate, but actual results may differ under different conditions[217]. - There have been no material changes to the Company's critical accounting estimates since the 2024 Form 10-K[217]. Credit Facilities - The company amended its revolving credit facility in May 2023, increasing the total borrowing capacity to $3.8 million[186]. Adjusted Metrics - Adjusted EBITDA for the three months ended June 30, 2024, was $0.4 million, with an Adjusted EBITDA margin of 2.4%[203].
Aeries Technology(AERT) - 2024 Q2 - Quarterly Report