Onfolio Holdings Loss Widens in Q1, Revenues Surge 77% Y/Y

Core Viewpoint - Onfolio Holdings, Inc. has experienced a decline in stock price despite significant revenue growth, indicating investor caution regarding the company's financial performance and future profitability [1][12]. Revenue & Earnings Performance - The company reported a 77% increase in revenues for Q1 2025, reaching $2.81 million, up from $1.59 million in Q1 2024, driven by organic growth and contributions from acquisitions [2]. - Gross profit rose 70% to $1.71 million from $1 million year-over-year, reflecting improved service revenues and margin gains despite rising costs [2]. - A net loss of $0.9 million was reported, widening 61% from a loss of $0.6 million in the previous year, with loss per share increasing to 18 cents from 11 cents [3]. Cost and Expense Analysis - Cost of revenues surged 90% year-over-year to $1.10 million, aligning with growth in service delivery and product sales [4]. - Operating expenses increased 71% to $2.49 million from $1.46 million, driven by higher selling, general and administrative costs, professional fees, and a one-time spike in stock-based compensation [4]. - Stock-based compensation accounted for $272,930 of the expense increase, primarily non-recurring [4]. Adjusted EBITDA and Cash Flow - Adjusted EBITDA for the quarter was negative $88,310, an improvement from negative $472,163 in Q1 2024, indicating a more favorable trend in core earnings when excluding one-time costs [5]. - Cash burn was reduced to $145,049 in Q1 2025 from $431,007 in the same period last year, reflecting operational improvements [6]. Business Segmentation and Growth Drivers - B2B services, particularly from RevenueZen and Eastern Standard, significantly contributed to revenue growth, with B2B revenues soaring to $1.69 million from $678,122 year-over-year [7]. - The gross profit margin improved due to a decline in product sales' cost ratio and the addition of higher-margin service revenues [7]. Interest Expenses and Financial Obligations - Interest expenses increased more than fivefold year-over-year to $100,720, influenced by debt-financed acquisitions and preferred stock dividends totaling $103,921 for the quarter [8]. Management Guidance and Strategy - Management remains confident in achieving profitability in the second half of 2025, contingent on successful execution of organic growth initiatives and targeted acquisitions [10]. - The company is expanding its AI integration strategy, focusing on automated content production and marketing efficiencies to enhance margins [10]. Recent Developments - No new acquisitions were closed in Q1 2025, but the company continued integrating its 2024 acquisitions, funded through a mix of seller notes, preferred equity, and debt [11]. - Onfolio successfully raised $700,000 in Series A Preferred Shares during the quarter to strengthen its balance sheet for future expansion [11].