ZW Data Action Technologies Reports Significant Revenue Decline and Increased Net Loss for First Half of 2025

ZW Data Action Technologies Inc. reported a significant decline in financial performance for the six months ended June 30, 2025, with total revenues dropping to $2.2 million from $9.95 million in the same period last year. The company attributed this decrease primarily to the winding down of its distribution of search engine marketing services, which had previously generated substantial revenue. For the three months ended June 30, 2025, revenues were $548,000, down from $6.42 million in the prior year. The gross profit for the first half of 2025 was $207,000, compared to $400,000 in the same period of 2024, reflecting a gross margin of 9.4%.

Operating expenses for the first half of 2025 totaled $1.47 million, a slight decrease from $1.62 million in the previous year. The company did not incur any sales and marketing expenses during this period, contrasting with $133,000 in the same period last year. General and administrative expenses remained relatively stable at $1.47 million compared to $1.49 million in 2024. The net loss attributable to ZW Data Action Technologies Inc. for the first half of 2025 was $1.17 million, slightly higher than the $1.08 million loss reported in the same period of 2024.

In terms of strategic developments, ZW Data Action Technologies completed the acquisition of Rahula Digital Media (HK) Limited for $600,000 in March 2025. This acquisition is expected to enhance the company's capabilities in marketing data management and targeted marketing systems. The company is also focusing on optimizing its internet resources and improving cash flow through better accounts receivable management and negotiations with suppliers for favorable payment terms.

Operationally, ZW Data Action Technologies reported a cash and cash equivalents balance of $1.71 million as of June 30, 2025, an increase from $812,000 at the end of 2024. The company experienced a net cash inflow from investing activities of $456,000 during the first half of 2025, primarily from repayments of short-term loans. The company’s total liabilities decreased to $5.67 million from $5.97 million at the end of 2024, while total equity stood at $3.57 million, down from $3.72 million.

Looking ahead, ZW Data Action Technologies plans to continue its focus on higher-margin business segments and is actively seeking to acquire businesses that can enhance its competitive advantage in the digital marketing space. However, the company has expressed uncertainty regarding its ability to maintain compliance with U.S. regulations, particularly concerning the PCAOB's ability to inspect its auditor, which could impact its stock listing status. The company’s management has indicated that achieving its operational goals is critical for its future liquidity and overall business viability.