Ispire Technology (ISPR) - 2025 Q2 - Quarterly Results

Revenue and Profitability - Revenue for the fiscal second quarter 2025 was $41.8 million, a slight increase of 0.3% from $41.7 million in the same quarter of fiscal 2024[4]. - Gross profit increased by 23.5% to $7.7 million, up from $6.3 million in the prior year, resulting in a gross margin of 18.5%, compared to 15.0% in the second quarter of fiscal 2024[4][8]. - Revenue for Q4 2024 was $41,827,860, a slight increase from $41,685,561 in Q4 2023, while revenue for the first half of 2024 decreased to $81,166,173 from $84,550,208 in the same period last year[24]. - Gross profit increased to $7,722,571 in Q4 2024, compared to $6,252,898 in Q4 2023, and for the first half of 2024, gross profit rose to $15,396,949 from $13,097,746[24]. Operating Expenses - Total operating expenses rose by 48.0% to $15.1 million, compared to $10.2 million in the same quarter of fiscal 2024[4][9]. - Total operating expenses for Q4 2024 were $15,082,626, up from $10,173,122 in Q4 2023, with a significant increase in general and administrative expenses from $8,778,715 to $13,020,962[24]. Net Loss - The net loss for the quarter was $8.0 million, or ($0.14) per share, compared to a net loss of $4.0 million, or ($0.07) per share in the second quarter of fiscal 2024[10]. - The net loss for Q4 2024 was $7,998,643, compared to a net loss of $3,991,912 in Q4 2023, and for the first half of 2024, the net loss increased to $13,593,659 from $5,333,499[24]. - Net loss per share for Q4 2024 was $0.14, compared to $0.07 in Q4 2023, and for the first half of 2024, it was $0.24 versus $0.10 in the same period last year[24]. - The company reported a loss before income taxes of $7,538,612 in Q4 2024, compared to a loss of $3,639,732 in Q4 2023[24]. - Comprehensive loss for Q4 2024 was $7,925,173, compared to a comprehensive loss of $3,877,585 in Q4 2023[24]. Cash Position and Financial Strategy - Cash position as of December 31, 2024, was $34.4 million, with working capital of $6.1 million[11]. - The company has authorized a stock repurchase program of up to $10 million, reflecting confidence in its long-term potential[6]. Business Expansion and Market Strategy - The company plans to expand its BrkFst brand into over 2,000 retail locations in Africa within the next six months, having already established a presence in over 500 locations[3]. - Ispire's joint venture's component PMTA strategy is expected to tap into a legal U.S. market for electronic nicotine delivery systems valued at approximately $11 billion, with an additional $7 billion potential in alternative markets[5]. - Ispire has made significant regulatory progress in Malaysia, obtaining critical nicotine import and export licenses and preparing for a manufacturer's license to scale operations to 70 production lines[6]. Other Financial Metrics - Interest income decreased to $59,755 in Q4 2024 from $203,101 in Q4 2023, reflecting a decline in interest-earning assets[24]. - The company experienced a foreign currency translation adjustment gain of $73,470 in Q4 2024, compared to a gain of $114,327 in Q4 2023[24]. - Weighted average shares outstanding increased to 56,658,012 in Q4 2024 from 54,270,236 in Q4 2023, indicating a dilution effect on earnings per share[24]. - The increase in gross profit and margin was primarily due to a favorable product mix with higher margin products sold during the quarter[8].