Richtech Robotics Inc. reported a net revenue of $1.257 million for the three months ending December 31, 2024, marking a 14% increase from $1.106 million in the same period of the previous year. The company's gross profit also saw a significant rise, reaching $1.134 million compared to $609,000 in the prior year, reflecting an 86% increase. This improvement in profitability is attributed to a strategic shift towards a Robotics-as-a-Service (RaaS) model, which has allowed the company to provide its robotic solutions on a subscription basis, thereby reducing upfront costs for customers and enhancing revenue predictability.
Operating expenses for the quarter increased to $5.032 million from $2.872 million year-over-year, primarily driven by a substantial rise in general and administrative costs, which surged to $4.303 million from $1.443 million. This increase is largely due to higher professional and legal fees associated with compliance as a newly public company, as well as increased payroll expenses from expanding the workforce. Research and development expenses also rose, reflecting the company's commitment to innovation and product development.
Richtech's transition to the RaaS model has resulted in a notable change in revenue streams. Product revenue increased significantly from $187,000 to $750,000, while leasing revenue rose from $13,000 to $138,000. However, service and rental revenue decreased from $799,000 to $133,000, indicating a shift in customer preferences towards leasing rather than outright purchases. The company has implemented a referral program to enhance customer acquisition while reducing marketing costs, which has contributed to maintaining a strong sales pipeline.
As of December 31, 2024, Richtech's cash and cash equivalents totaled $19.827 million, up from $14.566 million at the end of the previous fiscal year. This increase is primarily due to net proceeds of $9.244 million from the issuance of new shares. The company reported a net loss of $3.569 million for the quarter, compared to a loss of $2.748 million in the same period last year. The increase in losses is attributed to higher operating expenses and investments in growth initiatives.
Looking ahead, Richtech Robotics aims to continue expanding its RaaS offerings and enhancing its product portfolio. The company is focused on increasing market reach and building stronger customer relationships through its subscription-based model. However, it faces challenges such as rising competition, potential economic downturns, and supply chain uncertainties that could impact its operations and financial performance. The company remains committed to managing costs effectively while pursuing growth opportunities in the evolving robotics market.