Ispire releases Q1 financial report for fiscal year 2025: US market sales decrease by $8.1 million, net loss reaches $5.6 million

Ispire releases Q1 financial report for fiscal year 2025: US market sales decrease by $8.1 million, net loss reaches $5.6 million

Wuma Technology's revenue for the first quarter of fiscal year 2025 decreased by 8.2% year-on-year to 39.3 million US dollars; The gross profit increased by 13.2% year-on-year to 7.7 million US dollars; The net loss increased by approximately 330.8% year-on-year to 5.6 million US dollars. The decline in its revenue is mainly due to a decrease of $8.1 million in product sales in the US market.

On November 11, 2024, Ispire (NASDAQ: ISPR) released its financial results for the first quarter of fiscal year 2025, ending on September 30, 2024. Its revenue decreased by 8.2% year-on-year to $39.3 million; Gross profit increased by 13.2% year-on-year to 7.7 million US dollars; The net loss increased by 330.8% year-on-year to 5.6 million US dollars.

Wuma Technology stated in the announcement that its revenue decline was mainly due to a decline in product sales in the US market, from $17.8 million in the previous period to $9.7 million in the current period, resulting in a decrease of $8.1 million in sales. But it was partially offset by sales of electronic cigarette products in the European market and sales in other regions, with sales in the European market increasing by $2.1 million (from $19.9 million to $22 million) and sales in other regions increasing by $3.7 million (from $0.06 million to $3.8 million), mainly due to an increase of $2.9 million in sales in the South African market.

The total operating expenses for this period increased by 67.5% year-on-year to 12.9 million US dollars. Wuma Technology stated that the increase in operating expenses was mainly due to an increase of 700000 US dollars in marketing activities, an increase of 1 million US dollars in stock compensation expenses for sales personnel, and an increase of 100000 US dollars in employee and salary expenses for Aspire Science. The company also added $1 million in stock compensation expenses for the three months ending September 30, 2024, to incentivize management, employees, and service providers, as well as $1.9 million in bad debt expenses as a provision for credit losses on the company's accounts receivable.

As of September 30, 2024, Ispire had $37.7 million in cash and cash equivalents, as well as $16.6 million in working capital.

Michael Wang, Co CEO of Wuma Technology, stated that Wuma Technology has recently expanded its business in the Middle East and North Africa region, as well as global duty-free markets, through a landmark 5-year main distribution agreement signed with ANDS. This collaboration will bring the Hidden Hills Club nicotine product portfolio into new markets.

Jim McCormick, Chief Financial Officer of Wuma Technology, stated:

Our performance in the first quarter of fiscal year 2025 met internal expectations as we adjusted our US market strategy and were also affected by some delayed shipments. Despite facing obstacles, our financial performance in the first quarter remained strong, with gross profit increasing by 13.2% year-on-year and gross profit margin increasing from 16.0% in the first quarter of fiscal year 2024 to 19.5% in fiscal year 2025.