Ispire Technology (ISPR) - 2025 Q3 - Quarterly Results

Financial & Operational Highlights The company reported decreased revenue and increased net loss in Q3 FY2025, alongside strategic operational advancements in cost reduction and product innovation Financial Performance Summary | Financial Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Revenue | $26.2 million | $30.0 million | | Gross Profit | $4.8 million | $6.1 million | | Gross Margin | 18.2% | 20.4% | | Total Operating Expenses | $15.4 million | $11.8 million | | Net Loss | ($10.9) million | ($5.9) million | - Accounts Receivable decreased from $67.7 million in the prior year's quarter to $60.4 million, marking a first-time reduction and improving the company's financial position by focusing on higher quality customers[1][3][5] - The company is transitioning manufacturing to Malaysia, a move expected to reduce annual operating expenses by $8 million[3] - Post-quarter, IKE Tech, a joint venture, filed a component Premarket Tobacco Product Application (PMTA) with the FDA for its blockchain-based, point-of-use age-gating technology[1][3] - Launched 'Sprout,' an advanced all-in-one cannabis vapor device, in collaboration with Raw Garden[1][3] Management Commentary Management emphasized strategic execution, including de-risking production and improving financial stability, to drive long-term growth and shareholder value - Co-CEO Michael Wang stated the company is delivering on its strategic priorities, including transitioning manufacturing to Malaysia to de-risk production and reduce operating expenses by an anticipated $8 million annually[3] - The company received an interim license for manufacturing nicotine products in Malaysia and anticipates receiving the final federal license soon, which would be a first in the country[3] - CFO Jim McCormick highlighted the successful reduction in accounts receivable to $60.4 million from $67.7 million year-over-year, achieved by focusing on larger, higher-quality customers[5] Detailed Financial Performance The company reported a revenue decline for both the quarter and nine-month periods, with increased operating expenses leading to a significant rise in net loss, despite some gross margin improvements Three-Month Period Ended March 31, 2025 (Q3 FY2025) Q3 FY2025 saw a 12.7% revenue decline to $26.2 million, a contracted gross margin of 18.2%, and a nearly doubled net loss of $10.9 million due to increased operating expenses | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $26.2M | $30.0M | -12.7% | | Gross Profit | $4.8M | $6.1M | -21.3% | | Net Loss | ($10.9M) | ($5.9M) | +84.7% | | EPS (Diluted) | ($0.19) | ($0.11) | +72.7% | Nine-Month Period Ended March 31, 2025 For the nine months ended March 31, 2025, revenue decreased by 6.3% to $107.4 million, while gross margin improved to 18.8%, yet a significant rise in operating expenses led to a doubled net loss of $24.5 million | Metric | Nine Months FY2025 | Nine Months FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $107.4M | $114.6M | -6.3% | | Gross Profit | $20.2M | $19.2M | +5.2% | | Gross Margin | 18.8% | 16.8% | +2.0 p.p. | | Net Loss | ($24.5M) | ($11.3M) | +116.8% | | EPS (Diluted) | ($0.43) | ($0.21) | +104.8% | Financial Statements The unaudited condensed consolidated financial statements detail the company's financial position as of March 31, 2025, highlighting changes in cash, accounts payable, and accumulated deficit Unaudited Condensed Consolidated Balance Sheets As of March 31, 2025, the balance sheet shows a decrease in cash to $23.5 million, a rise in related party accounts payable to $77.1 million, and a working capital deficit of ($2.1) million | Balance Sheet Item | March 31, 2025 (USD) | June 30, 2024 (USD) | | :--- | :--- | :--- | | Cash | $23,518,560 | $35,071,294 | | Accounts receivable, net | $60,425,835 | $59,734,765 | | Total current assets | $94,026,657 | $102,571,605 | | Accounts payable – related party | $77,121,850 | $67,046,472 | | Total liabilities | $100,942,604 | $88,184,626 | | Total stockholders' equity | $14,785,122 | $34,456,340 | - As of March 31, 2025, the company had cash and cash equivalents of $23.5 million and working capital of ($2.1) million[11] Unaudited Condensed Consolidated Statements of Operations The statement of operations details the net loss for both the three and nine-month periods, driven by increased general and administrative expenses despite revenue and gross profit figures Income Statement Item (Q3 FY2025) | Income Statement Item (Q3 FY2025) | Amount (USD) | | :--- | :--- | | Revenue | $26,190,725 | | Gross profit | $4,775,905 | | General and administrative expenses | $13,704,819 | | Loss from operations | ($10,585,441) | | Net loss | ($10,856,495) | Income Statement Item (Nine Months FY2025) | Income Statement Item (Nine Months FY2025) | Amount (USD) | | :--- | :--- | | Revenue | $107,356,898 | | Gross profit | $20,172,854 | | General and administrative expenses | $36,670,781 | | Loss from operations | ($23,208,365) | | Net loss | ($24,450,154) | About Ispire Technology Inc. Ispire Technology develops and distributes branded e-cigarettes and cannabis vaping products globally, leveraging an extensive intellectual property portfolio of over 200 patents - The company develops and distributes branded e-cigarettes and cannabis vaping products[15] - Tobacco products are marketed under the 'Aspire' brand and sold worldwide, excluding the U.S., China, and Russia[15] - Cannabis products are marketed under the 'Ispire' brand, primarily as an ODM in the U.S., with recent marketing activities starting in Canada and Europe[15] Conference Call Information The company will host a conference call and Q&A session on Monday, May 12, 2025, at 8:00 am ET, with details for live access and replay availability - A conference call is scheduled for Monday, May 12, 2025, at 8:00 am ET[13][17] - Dial-in numbers are 888-880-3330 (North America) or +1 646-357-8766 (International)[17] - A live webcast is available, and a replay can be accessed by dialing 800-770-2030 with passcode 9733287 until May 15, 2025[13][14]