Senmiao Technology Reports Revenue Decline and Increased Net Losses for Three and Nine Months Ended December 31, 2024

Senmiao Technology Limited reported its financial results for the three and nine months ended December 31, 2024, revealing a decline in revenue and an increase in net losses compared to the previous fiscal period. For the three months, total revenues amounted to $919,836, a decrease of approximately 17% from $1,108,207 in the same period last year. The nine-month revenue also fell to $2,544,725 from $3,480,453, marking a decline of about 26.9%. The company attributed this decrease primarily to a reduction in the number of automobiles leased for operating purposes, which significantly impacted rental income.

The company's gross profit for the three months ended December 31, 2024, was $176,387, down from $288,450 in the prior year, while the nine-month gross profit decreased to $526,256 from $741,763. Operating expenses also saw a reduction, with total operating expenses for the three months decreasing to $882,611 from $1,190,814, largely due to a decrease in selling, general, and administrative expenses. Despite these reductions, Senmiao reported a net loss from continuing operations of $583,378 for the three months, an improvement from a loss of $703,034 in the same period last year. For the nine months, the net loss was $1,558,002, down from $2,154,948.

Strategically, Senmiao has undergone significant changes, including the discontinuation of its online ride-hailing platform services, which were sold to Jiangsu Yuelaiyuexing Technology Co., Ltd. in August 2024. This decision was driven by ongoing losses in that segment. The company now focuses solely on automobile transaction and related services, which include operating leases, financing, and management services for ride-hailing drivers. As of December 31, 2024, Senmiao had 4 employees in its sales department, reflecting a streamlined operational focus.

Operationally, the company reported a decrease in the average number of automobiles leased for operating purposes, which fell to approximately 662 in the latest quarter from 871 in the previous year. The average utilization rate of these vehicles improved to approximately 85.9% from 80.6% year-over-year. However, the company faces challenges in maintaining its customer base and managing credit risks associated with automobile purchasers. As of December 31, 2024, Senmiao had accounts receivable of approximately $40,300, with an allowance for credit losses of $1,529.

Looking ahead, Senmiao's management expressed concerns regarding its ability to continue as a going concern, citing a working capital deficit of approximately $3.4 million and an accumulated deficit of around $43.3 million. The company is exploring various financing options, including equity financing and support from related parties, to address its liquidity needs. However, management acknowledged that there is no assurance that these plans will be successful, and the company may need to curtail or cease operations if significant revenue generation does not occur.