Recon Technology, Ltd Reports Financial Results for the First Six Months of Fiscal Year 2026

Core Viewpoint - Recon Technology, Ltd reported significant financial improvements for the first six months of fiscal year 2026, with a notable increase in revenue and gross profit, alongside a reduced net loss compared to the same period in 2024 [1][2]. Financial Highlights - Net loss decreased to RMB7.2 million ($1.0 million) for the six months ended December 31, 2025, down from RMB20.7 million ($3.0 million) in the same period of 2024, representing a reduction of RMB13.5 million ($1.9 million) or 65.2% [1][2]. - Total revenue increased to RMB85.0 million ($12.2 million), a rise of RMB43.0 million ($6.2 million) or 102.2% from RMB42.0 million ($5.8 million) in the same period of 2024 [1][2]. - Gross profit rose to RMB28.5 million ($4.1 million), up from RMB13.4 million ($1.9 million), marking an increase of RMB15.1 million ($2.2 million) or 113.2% [1][2]. - Gross margin improved to 33.5% from 31.7% year-over-year [1][2]. Revenue Breakdown - Revenue from automation products and software surged by RMB41.4 million ($5.9 million) or 197.6%, primarily due to overseas oilfield projects [1][2]. - Revenue from oilfield environmental protection services increased by RMB2.8 million ($0.4 million) or 101.3%, driven by higher settlement prices from wastewater treatment clients [1][2]. - Revenue from equipment and accessories grew by RMB1.6 million ($0.2 million) or 10.2%, supported by offshore oilfield operations [1][2]. - Revenue from platform outsourcing services fell to zero due to strategic shifts by major clients [1][2]. Cost and Expenses - Cost of revenue increased to RMB56.6 million ($8.1 million) from RMB28.7 million ($4.1 million) in the previous year [2]. - Operating expenses remained stable, with selling expenses decreasing by 16.2% while general and administrative expenses rose by 19.3% [2]. Management Commentary - The CEO expressed optimism about the company's progress, highlighting stability in core business and growth driven by overseas projects and domestic oilfield recovery [1][2]. - The company is focused on diversifying revenue streams, particularly through its plastic chemical recycling project, which is expected to be completed by July 2026 [1][2]. Cash Position - As of December 31, 2025, the company had cash of approximately RMB75.1 million ($10.7 million), down from RMB98.9 million ($14.1 million) as of June 30, 2025 [2][3].