HeartCore Enterprises, Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues totaling $3.59 million, a decrease of 28.9% from $5.05 million in the same period of 2024. The company also experienced a net loss of $3.14 million, compared to a loss of $1.48 million in the prior year, marking an increase in losses of 112.3%. The gross profit margin fell to 30.7%, down from 40.3% a year earlier, primarily due to reduced sales in on-premise software and consulting services.
The company's total operating expenses decreased by 13.7% to $2.34 million, driven by a reduction in general and administrative costs, which fell by 19.8% to $1.93 million. However, selling expenses rose by 32.5% to $291,160, attributed to increased salaries and commissions following a restructuring of the sales department. Research and development expenses also increased by 39% to $123,893, reflecting investments in new product development.
HeartCore's operational metrics showed a decline in customer engagement, with revenues from on-premise software licenses dropping significantly due to fewer large orders compared to the previous year. The company also reported a decrease in revenues from customized software development and consulting services, impacted by heightened competition and market uncertainties. As of March 31, 2025, HeartCore had 22,075,333 shares of common stock outstanding, a slight increase from 21,937,987 shares at the end of 2024.
In terms of strategic developments, HeartCore continues to expand its consulting services for Japanese companies seeking to go public in the U.S. market, with 14 active consulting agreements. The company also formed new subsidiaries, including HeartCore Luvina in Vietnam, which began operations in February 2024. Despite the challenges faced in the first quarter, HeartCore is focused on enhancing its product offerings and exploring opportunities for geographic expansion.
Looking ahead, HeartCore is monitoring its compliance with Nasdaq's minimum bid price requirement after receiving a notice of noncompliance. The company has until November 3, 2025, to regain compliance. Management remains optimistic about future growth, particularly in its consulting services and software development sectors, as it navigates the current market conditions.
About HeartCore Enterprises, Inc.
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