Revenue Performance - Total revenue for the three months ended September 30, 2024, was $16.873 million, compared to $17.578 million for the same period in 2023, representing a decrease of approximately 4%[212] - Revenue from North America was $15.728 million for the three months ended September 30, 2024, down from $13.879 million in the same period of 2023, indicating an increase of about 13%[212] - Revenue from Asia Pacific and Other regions was $1.145 million for the three months ended September 30, 2024, compared to $3.699 million in the same period of 2023, reflecting a significant decrease of approximately 69%[212] - The total revenue for the six months ended September 30, 2024, was $33.540 million, slightly down from $33.908 million for the same period in 2023, showing a decrease of about 1%[212] Client and Market Information - Aeries had more than 30 clients across various industries, including e-commerce, telecom, security, healthcare, and engineering as of September 30, 2024[196] - The company plans to focus on organic growth in North America and does not intend to enter into new customer contracts outside this region[234] Financial Position and Liabilities - As of September 30, 2024, the company had a working capital deficit of $9.8 million, primarily due to current liabilities related to liquidity arrangements[241] - The company is actively pursuing capital raising alternatives to address remaining liabilities of $7.5 million owed to FPA holders[246] Operating Results - For the three months ended September 30, 2024, the company's net revenue decreased by $0.7 million or 4%, to $16.9 million from $17.6 million in the same period of 2023[215] - The cost of revenue increased by $0.6 million or 4%, to $13.3 million, primarily due to a $1.6 million increase in employee compensation and benefits[216] - Gross profit for the three months ended September 30, 2024, decreased by $1.2 million or 26%, resulting in a gross profit margin decline of 2,600 basis points to 21%[217][218] - Selling, general and administrative expenses surged by $4.3 million or 130%, reaching $7.7 million, driven by a $2.5 million provision for expected credit loss on customer receivables[219] - Total other income for the three months ended September 30, 2024, was $1.3 million, a significant increase of $1.2 million or 953% compared to the previous year[220] - The income tax benefit for the three months ended September 30, 2024, was $(0.5) million, reflecting a $1.2 million decrease compared to a provision of $0.7 million in the same period of 2023[221] - For the six months ended September 30, 2024, net revenue decreased by $0.3 million or 1%, totaling $33.5 million compared to $33.9 million in the same period of 2023[224] - The cost of revenue for the six months ended September 30, 2024, increased by $1.3 million or 5%, to $25.9 million, driven by a $3.3 million increase in employee compensation and benefits[225] - Selling, general and administrative expenses for the six months ended September 30, 2024, increased by $21.0 million or 301%, reaching $28.1 million, largely due to stock-based compensation and legal charges[229] - The income tax benefit for the six months ended September 30, 2024, was $(1.6) million, a decrease of $2.5 million or 280% compared to a provision of $0.9 million in the same period of 2023[231] - For the six months ended September 30, 2024, the company reported a net loss of $17.6 million[240] Cash Flow and Financing - The company generated a net operating cash inflow of $0.2 million for the six months ended September 30, 2024[244] - Net cash provided by financing activities during the six months ended September 30, 2024, was $2.3 million, primarily from proceeds of the PIPE transaction of $4.7 million[253] - The company had cash and cash equivalents of $3.6 million as of September 30, 2024, an increase from $1.9 million at the end of the previous period[244] Tax and Risk Management - The effective tax rate for the company varies based on jurisdiction and tax planning strategies, with operations in India, Mexico, Singapore, and the United States[203] - The company is exposed to risks from inflation and fluctuations in currency exchange rates, which could negatively impact operating results[212] - The company focuses on maintaining strong customer relationships to mitigate risks associated with potential early termination of long-term contracts[201] Adjusted EBITDA - Adjusted EBITDA for the three months ended September 30, 2024, was $(2.3) million, compared to $2.9 million for the same period in 2023[238] - Core adjusted EBITDA for the three months ended September 30, 2024, was $183,000, down from $1.0 million in the same period in 2023[238]
Aeries Technology(AERT) - 2024 Q3 - Quarterly Report