Future FinTech Group Inc. Reports 18.58% Revenue Decline and $30.95 Million Net Loss in Q1 2025

Future FinTech Group Inc. reported a significant decline in its financial performance for the first quarter of 2025, with total revenue falling to $552,977, down 18.58% from $679,189 in the same period of 2024. The decrease was primarily attributed to a substantial drop in revenue from other services, particularly a reduction in debt recovery consulting fees and U.S. dollar bond service income. The company's supply chain financing and trading segment, however, saw a modest increase in revenue, rising 8.16% to $477,792, driven by higher sales of bulk goods where the company retained ownership.

The company's gross profit also decreased sharply, from $275,094 in Q1 2024 to $78,618 in Q1 2025, reflecting a gross margin decline from 40.50% to 14.22%. This decline was largely due to reduced profitability in the debt recovery consulting services. Operating expenses surged dramatically to $31.23 million, compared to $2.18 million in the previous year, primarily due to a $28.37 million provision for doubtful debts related to receivables from a subsidiary. As a result, the net loss from continuing operations ballooned to $30.95 million, compared to a loss of $3.34 million in the prior year.

In terms of strategic developments, Future FinTech has undergone significant organizational changes, including the dissolution of its variable interest entity (VIE) E-Commerce Tianjin, which had been generating minimal revenue since 2021. The company also completed a series of asset disposals, including the sale of several subsidiaries, which contributed to a gain of $28.24 million from discontinued operations in Q1 2025. The company’s total assets decreased to $23.64 million as of March 31, 2025, down from $25.90 million at the end of 2024, reflecting the impact of these divestitures.

Future FinTech's operational metrics indicate a challenging environment, with a notable increase in customer concentration risk, as one customer accounted for 84.2% of total revenues in Q1 2025. The company’s cash and cash equivalents stood at $4.44 million, a decrease from $4.77 million at the end of 2024, while working capital also declined to $6.50 million. The company has indicated that it is actively working to improve its financial position and operational efficiency, particularly through the implementation of new internal controls and accounting practices to address identified weaknesses.

Looking ahead, Future FinTech's management has expressed cautious optimism about its ability to execute its new business strategy focused on supply chain financing and trading services. However, the company continues to face substantial risks, including regulatory uncertainties in China and ongoing legal challenges related to past operations. The outlook remains contingent on the successful execution of its strategic initiatives and the stabilization of market conditions.