Armlogi Holding Corp. Reports Revenue Growth but Net Loss for Six Months Ended December 31, 2024

Armlogi Holding Corp. reported a significant decline in financial performance for the six months ended December 31, 2024, compared to the same period in 2023. The company generated total revenue of $93.6 million, an increase of 12.5% from $83.2 million in the prior year. However, it recorded a net loss of $6.3 million, a stark contrast to the net income of $6.5 million reported in the previous year. The gross profit margin also fell sharply, from 15.5% to a negative 3.3%, primarily due to increased costs associated with freight and lease expenses.

The company's costs of sales surged by 37.5% to $96.7 million, driven by higher freight expenses and increased operational costs as Armlogi expanded its warehouse and operations team. Notably, revenue from transportation services rose by 8.3%, while warehousing services saw a more substantial increase of 24.7%. Despite these revenue increases, the overall profitability was adversely affected by rising operational costs, including a significant uptick in lease expenses and temporary labor costs.

In terms of operational metrics, Armlogi's customer base expanded to 298 active customers as of December 31, 2024, up from 105 in the previous year. This growth reflects the company's strategic focus on enhancing its logistics and warehousing capabilities to meet the demands of cross-border e-commerce. The company currently operates ten warehouses across the U.S., with a total gross floor area of approximately 3.9 million square feet, equipped with advanced sorting systems and heavy-duty equipment.

The company also undertook strategic financing initiatives, including a Standby Equity Purchase Agreement (SEPA) with YA II PN, Ltd., allowing it to sell up to $50 million in common stock. This agreement is expected to provide necessary capital to support ongoing operations and expansion efforts. As of December 31, 2024, Armlogi had cash and restricted cash totaling $7.4 million, down from $10 million at the end of the previous fiscal period, indicating a need for careful cash management moving forward.

Looking ahead, Armlogi Holding Corp. anticipates that its ongoing investments in infrastructure and customer acquisition will position it for future growth. However, the company acknowledges the challenges posed by rising operational costs and market conditions, which may impact profitability in the near term. Management remains focused on optimizing operations and enhancing service offerings to improve financial performance in the upcoming quarters.