HeartCore Enterprises, Inc., a software development company based in Tokyo, Japan, reported significant financial performance for the fiscal year ending December 31, 2024, with total revenues reaching $30.4 million, a 39.2% increase from $21.8 million in the previous year. The company experienced a net loss of $5.2 million, slightly higher than the $4.9 million loss reported in 2023. The increase in revenue was primarily driven by a substantial rise in consulting services related to initial public offerings (IPOs), which generated $14.7 million, compared to $6.2 million in the prior year. This growth was complemented by a notable increase in on-premise software sales, which rose by 70.3% to $2.7 million.
In terms of operational metrics, HeartCore's customer base consisted of 982 total customers as of December 31, 2024, with 724 (73.7%) being paying customers. The company also reported 280 non-paying customers who had previously utilized paid services but were now using a free version of the customer experience management (CXM) platform. The net retention rate for paying customers was 95%, indicating strong customer loyalty and potential for upselling. The company has made strategic investments in its sales and marketing efforts, employing 12 staff members in these areas to enhance its presence in the Japanese software market.
HeartCore has undertaken several strategic developments, including the acquisition of a 51% stake in Sigmaways, a software development company in the United States, which was finalized in February 2023. Additionally, the company launched HeartCore Financial to support its GO IPO consulting services and established a new subsidiary, HeartCore Luvina, in Vietnam, which began operations in February 2024. These initiatives are part of HeartCore's broader strategy to expand its market reach and enhance its service offerings.
Despite the growth in revenue, the company faced challenges, including a decrease in revenue from customized software development services due to increased competition. The total operating expenses rose to $17.8 million, primarily due to impairments related to intangible assets and goodwill, which amounted to $3.9 million and $3.3 million, respectively. The company’s cash and cash equivalents increased to $2.1 million, up from $1.0 million in the previous year, indicating improved liquidity.
Looking ahead, HeartCore Enterprises aims to continue its international expansion and enhance its product offerings. The company plans to leverage its existing customer base while pursuing new clients, particularly in the growing automation and digital transformation markets. The management remains optimistic about future growth, although it acknowledges the potential risks associated with market competition and economic conditions.
About HeartCore Enterprises, Inc.
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