Exceed World, Inc. Reports 38% Revenue Decline and Increased Net Loss for December 2024 Quarter

Exceed World, Inc. reported a significant decline in financial performance for the three months ended December 31, 2024, with revenues totaling $3,005,008, down 38% from $4,827,149 in the same period of the previous year. The company's gross profit also decreased to $1,859,637 from $2,483,577, reflecting the impact of reduced recruitment activities for premium Force Club members. The net loss for the quarter widened to $774,189, compared to a loss of $277,946 in the prior year, primarily attributed to the drop in revenue.

Operating expenses for the quarter were $2,617,743, a decrease from $2,763,922 in the previous year. This reduction was driven by lower costs associated with advertising and research and development, which amounted to $99,161 and $277,129, respectively, compared to $101,056 and $737,437 in the prior year. The company also reported a notable increase in depreciation and amortization expenses, which rose to $113,738 from $46,459, indicating a shift in asset utilization or investment in new assets.

In terms of operational metrics, Exceed World, Inc. continues to focus on its educational services through the Force Club platform, which remains its primary revenue stream. The company has also launched a new Connector Plan membership, contributing $1,019,955 in revenue during the quarter. However, the overall customer engagement appears to have declined, as evidenced by the significant drop in Force Club Membership Fee revenue, which fell to $1,968,768 from $4,745,649 year-over-year.

Geographically, the company reported that nearly all its revenue was generated in Japan, where it operates through its subsidiaries. As of December 31, 2024, Exceed World, Inc. maintained a cash balance of $14,289,019, down from $17,963,261 at the end of the previous fiscal period, indicating a net decrease in cash flow of $4,168,293. The company’s working capital also decreased to $10,625,225 from $13,800,283, reflecting the challenges faced in maintaining liquidity amid declining revenues.

Looking ahead, Exceed World, Inc. plans to enhance its sales network and provide additional benefits to premium members to stimulate growth. The company acknowledges the need to adapt to changing market conditions and improve its recruitment strategies to regain momentum. However, the management has also highlighted potential risks, including economic fluctuations and competitive pressures, which could impact future performance.