Longduoduo Reports 52% Revenue Decline, Net Loss in Q3 2024

Longduoduo Company Limited reported significant financial challenges for the three months ended September 30, 2024, compared to the same period in 2023. Total revenues decreased by 52% to $769,072 from $1,587,433, primarily due to a decline in healthcare service revenue and a reduction in commission revenue from sales agent activities. The gross profit mirrored this trend, falling to $736,796 from $1,525,082, also a 52% decrease.

The company experienced a substantial operational loss of $62,076, a stark contrast to the income of $434,282 reported in the prior year. This shift resulted in a net loss of $59,504 for the quarter, compared to a net income of $294,744 in the same quarter of 2023. The net income attributable to common stockholders also reflected this downturn, with a loss of $57,303 compared to a profit of $284,217 in the previous year.

Operating expenses were reduced, with advertising and promotion expenses dropping to $308,910 from $654,452, and salaries and benefits expenses decreasing to $135,321 from $186,651. However, the overall decrease in revenue outpaced these cost-cutting measures, leading to a net cash used in operating activities of $(534,998), compared to $(383,169) in the prior year.

As of September 30, 2024, Longduoduo's cash and cash equivalents stood at $849,840, down from $1,404,042 at the end of June 2024. Total current assets also decreased to $1,213,681 from $1,659,845, while total assets fell to $1,653,444 from $2,063,401. The company reported total current liabilities of $865,949, down from $1,264,236, and an accumulated deficit of $(6,686,935), slightly increased from $(6,629,632).

Strategically, Longduoduo has been focusing on its new revenue stream from agent sales of preventive healthcare solutions, which began in June 2023. However, the reliance on a single customer for 99.9% of commission revenue during the quarter raises concerns about revenue concentration risks. The company also noted that it has identified material weaknesses in its disclosure controls and procedures, which could impact its financial reporting.

Overall, Longduoduo's financial performance in the latest quarter reflects significant challenges, with management anticipating a potential return to profitability in early 2025, contingent on favorable government policies promoting economic recovery.