Core Viewpoint - Youxin Technology Ltd reported a 21% year-over-year revenue growth in the first half of fiscal year 2025, driven by the resumption of customized CRM system development services, despite facing near-term margin pressures and a net loss [2][4][6]. Financial Overview - Total revenues for the first half of fiscal year 2025 were $346,013, an increase of 21% from $285,392 in the same period of the previous year [4][6]. - Gross profit was $129,627, down from $193,746 year-over-year, resulting in a gross margin of 37%, compared to 68% in the prior year [10][23]. - The net loss for the period was $1.7 million, compared to a net loss of $0.9 million in the same period last year [6][13]. Revenue Breakdown - Revenue from professional services reached $326,793, a significant increase of 169% from $121,366 year-over-year [4][14]. - Revenue from payment channel services decreased by 88% to $17,098, down from $140,663, attributed to reduced client demand [8][14]. - Revenue from subscription services was $97,128, a decrease of 15% from $114,789, due to a decline in customized CRM system development services [14]. Cost and Expenses - Cost of revenues increased by 136% to $216,386 from $91,646 in the previous year [9]. - Operating expenses totaled $1.4 million, up from $1.2 million year-over-year, with significant increases in general and administrative expenses [11][15]. - Research and development expenses decreased by 83% to $140,262, primarily due to reduced labor-related costs [15]. Cash Flow and Financial Condition - As of March 31, 2025, cash was $1,636,920, a substantial increase from $18,372 as of September 30, 2024 [6][17]. - Net cash used in operating activities was $2.3 million, compared to $0.6 million in the same period last year [17]. - Net cash provided by financing activities was $7.2 million, significantly higher than $0.3 million in the previous year [18]. Strategic Outlook - The company aims to optimize its PaaS platform and SaaS services to enhance customer value and loyalty, while also collaborating with strategic vendors to meet client needs [2].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 decreased by 5.8% to $4.2 million compared to $4.5 million in the same period last year [11] - SaaS revenue grew by 9.8% to $1.5 million, driven by early successes in payables automation [11] - Professional services revenue decreased by 13.2% to $2.2 million, accounting for 51% of total revenue compared to 55% last year [12] - Consolidated gross margin increased by 322 basis points to 67.6% due to a better revenue mix and improved SaaS margins [12] - Net loss for Q1 was $728,000 compared to a net loss of $175,000 in the same period last year [13] - Adjusted EBITDA for the quarter was $77,000, down from $673,000 in Q1 2024 [14] Business Line Data and Key Metrics Changes - SaaS revenue, including hosting, showed growth while professional services experienced a decline [11][12] - The company closed multiple orders with partners, indicating a strong pipeline for SaaS products [5][9] Market Data and Key Metrics Changes - The company noted a significant order intake week with over $2.4 million in new project contracts, expected to be recognized over the next six to seven months [9] - Recent political events and economic conditions, such as high interest rates in the building industry, have created some uncertainty but are expected to improve [10][25] Company Strategy and Development Direction - The company is focusing on transforming into a predominantly SaaS-driven business with a diverse suite of solutions [6] - Investments in sales and marketing, as well as IT infrastructure, are aimed at accelerating growth and enhancing customer trust [8] - The company plans to continue scaling its business and enhancing development capabilities to bring new features to market more quickly [6][8] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a strong competitive position and growth opportunities in the market [35] - The company expects to grow revenues year-over-year for fiscal 2025, particularly in SaaS, while maintaining positive adjusted EBITDA [17] Other Important Information - The company has paused aggressive debt prepayments to focus on sales and marketing initiatives [15] - A shelf registration was filed to strengthen the balance sheet and enable quick capital actions [16] Q&A Session Summary Question: How many implementations will you have and what would those mean in terms of annual recurring revenue? - The company expects to have about 22 to 23 customers using the SaaS product [20] Question: How is the implementation of purchase orders progressing? - The first release of payables order was launched in April, with positive initial feedback [21][22] Question: Are there any customer hesitations regarding implementation timing? - Hesitations are more related to market conditions rather than the company's products [24][25] Question: Are the new orders in professional services stable in terms of margin opportunities? - The company has a strong backlog with over $3 million of work queued, which should help restore historical performance levels [27] Question: Is the company still serving over 600 K-12 customers? - Yes, the company has launched new products in the K-12 market and is seeing positive growth [28][30]