Ispire Technology Inc. Reports Revenue Decline and Increased Net Loss in Latest Financial Filing

Ispire Technology Inc. reported a significant decline in financial performance for the three and nine months ending March 31, 2025, as detailed in its latest 10-Q filing. The company generated revenues of $26.2 million for the third quarter, a decrease of 12.7% from $30.0 million in the same period last year. For the nine-month period, revenues fell to $107.4 million, down 6.3% from $114.6 million. The gross profit for the quarter was $4.8 million, representing an 18.2% gross margin, compared to 20.4% in the prior year. The net loss for the quarter was $10.9 million, or $(0.19) per share, compared to a loss of $5.9 million, or $(0.11) per share, in the same quarter of the previous year.

The decline in revenue was attributed to a significant drop in sales in North America, which fell by $3.6 million to approximately $8.8 million, and a decrease in sales in the Asia Pacific region by $0.8 million. However, the company did see an increase in sales in Europe, which rose by $10 million to $59.2 million for the nine-month period. The increase in operating expenses, which rose by 23.3% to $15.4 million for the quarter, was primarily driven by higher general and administrative costs, including a notable increase in credit loss expenses.

Ispire has made strategic moves to expand its operations, including the establishment of several wholly-owned subsidiaries in the UAE, California, and the UK to enhance its sales and marketing capabilities. The company is also focusing on product development and has plans to launch new nicotine products under the Ispire brand, leveraging licensing arrangements with partner brands. As of March 31, 2025, Ispire's total assets were reported at $115.7 million, down from $122.6 million at the end of the previous fiscal year, while total liabilities increased to $100.9 million from $88.2 million.

The company has also faced challenges in managing its accounts receivable, with the allowance for credit losses rising to $14.6 million, up from $5.9 million a year earlier. This increase reflects the company's assessment of its receivables and the economic conditions affecting its customers. Ispire's cash and cash equivalents decreased to $23.5 million from $35.1 million, indicating a tightening liquidity position. Looking ahead, Ispire anticipates that its current cash reserves, along with future cash flows from operations, will be sufficient to meet its working capital needs over the next 12 months, although it acknowledges the potential need for additional financing if market conditions do not improve.