PR Newswire
HONG KONG, Oct. 18, 2024
HONG KONG, Oct. 18, 2024 /PRNewswire/ -- CLPS Incorporation (the "Company" or "CLPS") (Nasdaq: CLPS), today announced its financial results for the six months ended June 30, 2024 and full year of fiscal 2024.
Fiscal year 2024 presented unique challenges due to global economic uncertainties and industry-wide layoffs. Despite these headwinds, CLPS demonstrated resilience and strategic foresight. We proactively adjusted our operations to navigate these complexities, positioning ourselves for continued growth. Our dual-engine strategy, focused on expanding our global reach and diversifying into new industry segments, proved instrumental in achieving this goal. In addition, the increasing demand for advanced IT services and skilled professionals offers a promising landscape for CLPS to capitalize on international business opportunities and drive future success.
Unaudited Second Half of Fiscal 2024 Highlights (all results compared to the six months ended June 30, 2023)
- Revenue from customized IT solution services increased by 40.0% to $1.9 million from $1.4 million.
- Revenue from academic education services reached $1.0 million during this period, as a result of the College of Allied Educators Pte. Ltd. ("CAE") acquisition.
- Revenue generated outside of mainland China increased by 48.0% to $13.3 million from $9.0 million. In particular:
- Revenue generated from Singapore increased by 34.3% to $6.3 million from $4.7 million.
- Revenue generated from Hong Kong SAR increased by 72.0% to $4.0 million from $2.3 million.
- Revenue generated from the United States increased by 37.9% to $2.5 million from $1.8 million.
- Gross profit increased by 7.3% to $17.2 million from $16.0 million.
- Net loss was $0.9 million, compared to a net loss of $1.2 million.
Audited Fiscal Year 2024 Highlights (all results compared to the twelve months ended June 30, 2023)
- Revenue generated outside of mainland China increased by 37.9% to $22.3 million from $16.2 million. In particular:
- Revenue generated from Singapore increased by 25.8% to $11.0 million from $8.7 million.
- Revenue generated from Hong Kong SAR increased by 44.9% to $6.2 million from $4.3 million.
- Revenue generated from the United States increased by 57.2% to $4.4 million from $2.8 million.
- Accounts receivable turnover period improved to 111 days, down from 123 days.
- Net cash provided by operating activities was $8.9 million, representing the third consecutive fiscal year of generating positive cash flow from operations.
Mr. Raymond Lin, Chief Executive Officer of CLPS, commented, "While our financial results for this fiscal year may not have met our initial expectations, I am proud of our team's tenacity and agility in navigating a challenging market environment. Despite facing headwinds primarily due to strategic shifts by some of our clients, we have taken proactive steps to mitigate potential losses and position ourselves for long-term growth.
Our commitment to providing exceptional service to our clients has enabled us to retain our loyal client base and attract new business. Additionally, our strategic acquisition of CAE, a Singapore-based learning institution, along with Shell Infotech Pte. Ltd. and its wholly-owned subsidiary, Shell Infotech Consulting Sdn. Bhd., has further strengthened our position in the Southeast Asia region for IT services, while expanding our capabilities and market reach. In addition, we have diversified our business by entering sectors such as loan, e-commerce, tourism, and education through acquisitions, enhancing and complementing our core offerings in these areas to drive growth.
Anticipating a surge in demand for IT solutions, driven by factors like accelerated digital transformation, widespread adoption of remote work, and the growing emphasis on efficient and flexible IT infrastructure by companies, we established the China Development Center ("CDC") and the Global Testing Center ("GTC") during this period. These centers will help us maintain a competitive edge in the evolving IT landscape going forward.
Looking ahead, we remain committed to delivering long-term value to our shareholders. By continuing to focus on operational excellence, financial discipline, and strategic growth, we are confident in our ability to navigate future challenges and capitalize on emerging opportunities."
Ms. Rui Yang, Chief Financial Officer of CLPS, commented, "Our global expansion strategy has been one of the key focus during this fiscal year, resulting in a 37.9% increase in revenue generated outside of mainland China. Our Asia-Pacific operations have demonstrated impressive growth, with Singapore, Hong Kong, and Japan reporting substantial increases of 25.8%, 44.9%, and 122.5%, respectively. In North America, our presence in Canada has been fortified, and our US operations have experienced a significant surge, driven by increased visibility, strategic hiring, and growing demand for our services, resulting in a 57.2% increase in revenue. Additionally, our recent expansion into Dubai, UAE, has further solidified our global footprint and opened up new opportunities to serve the thriving Middle East market. These achievements underscore the strength of our team, the value of our offerings, and the effectiveness of our global strategy.
Over the past three fiscal years, we have consistently generated positive operating cash flows, demonstrating our effective cash management strategies. In this fiscal year, we improved our accounts receivable turnover period to 111 days from 123 days, enhancing our liquidity and enabling future investments and business expansion."
Unaudited Second Half of Fiscal Year 2024 Financial Results
Revenues
In the second half of fiscal 2024, revenues decreased by $2.6 million, or 3.5%, to $71.0 million from $73.6 million in the prior year period. The decrease in revenue was mainly due to the decreased demand in IT consulting services.
Revenues by Service
- Revenue from IT consulting services decreased by $4.2 million, or 5.8%, to $67.3 million in the second half of fiscal 2024, from $71.5 million in the prior year period. Revenue from IT consulting services accounted for 94.8% of total revenue, compared to 97.1% in the prior year period. The decrease was due to the decreased demand from existing clients.
- Revenue from customized IT solution services increased by $0.5 million, or 40.0%, to $1.9 million in the second half of fiscal 2024, from $1.4 million in the prior year period. Revenue from customized IT solution services accounted for 2.7% of total revenue, compared to 1.9% in the prior year period. The increase was primarily due to the increased demand from existing automotive area clients.
- Revenue from academic education services was $1.0 million, primarily due to the acquisition of CAE.
- Revenue from other services decreased by $0.1 million, or 3.1%, to $0.7 million in the second half of fiscal 2024, from $0.8 million in the prior year period. Revenue from other services accounted for 1.0% of total revenue, consistent with the prior year's period. The decrease was primarily due to the decreased demand for other services, including head hunting service.
Revenues by Operational Areas
- Revenue from banking area decreased by $0.6 million, or 2.1% to $28.7 million in the second half of fiscal 2024, from $29.3 million in the prior year period. Revenue from banking area accounted for 40.3% and 39.8% of total revenues in the second half of fiscal 2024 and 2023, respectively.
- Revenue from wealth management area decreased by $1.6 million, or 8.5% to $17.0 million in the second half of fiscal 2024, from $18.6 million in the prior year period. Revenue from wealth management area accounted for 23.9% and 25.2% of total revenues in the second half of fiscal 2024 and 2023, respectively.
- Revenue from e-Commerce area decreased by $1.5 million, or 13.2% to $10.2 million in the second half of fiscal 2024, from $11.7 million in the prior year period. Revenue from e-Commerce area accounted for 14.3% and 16.0% of total revenues in the second half of fiscal 2024 and 2023, respectively.
- Revenue from automotive area decreased by $0.7 million, or 8.1% to $7.0 million in the second half of fiscal 2024, from $7.7 million in the prior year period. Revenue from automotive area accounted for 9.9% and 10.4% of total revenues in the second half of fiscal 2024 and 2023, respectively.
Revenues by Geography
- Revenue generated outside of mainland China increased by 48.0% to $13.3 million in the second half of fiscal year 2024, from $9.0 million in the prior year period. The increase was primarily due to strong performance of our operations in Singapore, Hong Kong SAR and the U.S., reflecting the Company's successful and continuous implementation of its global expansion strategy.
Gross Profit
Gross profit increased by $1.2 million, or 7.3%, to $17.2 million in the second half of fiscal 2024, from $16.0 million in the prior year period. The increase was primarily due to our efforts to optimize the cost of sales in response to the decrease in total revenue.
Operating Expenses
Selling and marketing expenses increased by $1.2 million, or 199.9%, to $1.8 million in the second half of fiscal 2024, from $0.6 million in the prior year period. As a percentage of total revenues, selling and marketing expenses increased to 2.6% in the second half of fiscal 2024, compared to 0.8% in the prior year period. The increase was primarily due to an increase in sales staff to capture business growth opportunities.
Research and development expenses decreased by $0.02 million, or 0.4%, to $3.96 million in the second half of fiscal 2024, from $3.98 million in the prior year period. As a percentage of total revenues, research and development expenses increased to 5.6% in the second half of fiscal 2024, compared to 5.4% in the prior year period. The research and development expenses approximately remained relatively stable compared to the same period last year.
General and administrative expenses increased by $3.0 million, or 27.3%, to $13.9 million in the second half of fiscal 2024, from $10.9 million in the prior year period. As a percentage of total revenues, general and administrative expenses increased to 19.6% in the second half of fiscal 2024, compared to 14.9% in the prior year period. The increase was primarily due to the establishment of our CDC and GTC, which supported our efforts to capture the anticipated growth in demand for customized IT solution services.
Operating Loss
Operating loss was $1.6 million in the second half of fiscal 2024, compared to operating loss of $1.3 million in the same period of the previous year. Operating margin was -2.3% compared to -1.7% in the prior year period.
Other Income and Expenses
Total other income, net of other expenses was $0.6 million in the second half of fiscal 2024, compared to $0.5 million total other income, net of other expenses in the same period of previous year.
(Benefit) Provision for Income Taxes
Benefit for income taxes was $0.2 million in the second half of fiscal 2024, compared to a provision for income taxes of $0.5 million in the same period of the previous year.
Net (Loss) Income and EPS
Net loss was $0.9 million in the second half of fiscal 2024, compared to a net loss of $1.2 million in the prior year period.
Non-GAAP net loss[1] was $0.4 million in the second half of fiscal 2024, compared to a Non-GAAP net income of $1.7 million in the prior year period.
Net loss attributable to CLPS Incorporation's shareholders was $0.8 million, or $0.03 basic and diluted losses per share in the second half of fiscal 2024, compared to a net loss attributable to CLPS Incorporation's shareholders of $1.1 million, or $0.05 basic and diluted losses per share in the second half of fiscal 2023.
Non-GAAP net loss attributable to CLPS Incorporation's shareholders2 was $0.4 million, or $0.02 basic and diluted losses per share in the second half of fiscal 2024, compared to non-GAAP net income attributable to CLPS Incorporation's shareholders of $1.8 million, or $0.08 basic and diluted earnings per share in the second half of fiscal 2023.
Audited Fiscal Year 2024 Financial Results
Revenues
Revenues decreased by $7.6 million, or 5.0%, to $142.8 million in the fiscal year 2024, from $150.4 million in the prior year period. The decrease in revenue was mainly due to the decreased demand in IT consulting services.
Revenues by Service
- Revenue from IT consulting services decreased by $7.5 million, or 5.2%, to $136.8 million in the fiscal year 2024, from $144.3 million in the prior year period. Revenue from IT consulting services accounted for 95.8% of total revenue, compared to 96.0% in the prior year period. The decrease was due to the decreased demand from existing clients.
- Revenue from customized IT solution services decreased by $1.5 million, or 30.9%, to $3.1 million in the fiscal year 2024, from $4.6 million in the prior year period. Revenue from customized IT solution services accounted for 2.2% of total revenue, compared to 3.0% in the prior year period. The decrease was primarily due to the decreased demand from existing clients.
- Revenue from academic education services was $1.0 million, primarily due to the acquisition of CAE.
- Revenue from other services increased by $0.3 million, or 17.3%, to $1.8 million in the fiscal year 2024, from $1.5 million in the prior year period. Revenue from other services accounted for 1.2% of total revenue, compared to 1.0% in the prior year period. The increase was primarily due to the increased demand for other services, including software sales.
Revenues by Operational Areas
- Revenue from banking area decreased by $4.3 million, or 7.1% to $57.2 million in the fiscal year 2024, from $61.5 million in the prior year period. Revenue from banking area accounted for 40.0% and 40.9% of total revenues in the fiscal year 2024 and 2023, respectively.
- Revenue from wealth management area decreased by $1.8 million, or 4.7% to $35.6 million in the fiscal year 2024, from $37.4 million in the prior year period. Revenue from wealth management area accounted for 24.9% of total revenues in the fiscal year 2024, consistent with the prior year's period.
- Revenue from e-Commerce area decreased by $4.3 million, or 17.0% to $21.2 million in the fiscal year 2024, from $25.5 million in the prior year period. Revenue from e-Commerce area accounted for 14.8% and 16.9% of total revenues in the fiscal year 2024 and 2023, respectively.
- Revenue from automotive area increased by $75.7 thousand, or 0.5% to $14.25 million from $14.17 million in the prior year period. Revenue from automotive area accounted for 10.0% and 9.4% of total revenues in the fiscal year 2024 and 2023, respectively.
Revenues by Geography
- Revenue generated outside of mainland China increased by 37.9% to $22.3 million in the fiscal year 2024, from $16.2 million in the prior year period. The increase was due to strong performance of our operations in Singapore, Hong Kong SAR and the U.S., reflecting the Company's successful and continuous implementation of its global expansion strategy.
Gross Profit
Gross profit decreased by $1.6 million, or 4.5%, to $32.9 million in the fiscal year 2024, from $34.5 million in the prior year period. The decrease was primarily attributed to a decline in total revenue.
Operating Expenses
Selling and marketing expenses increased by $1.3 million, or 38.6%, to $4.6 million in the fiscal year 2024, from $3.3 million in the prior year period. As a percentage of total revenues, selling and marketing expenses increased to 3.2% in the fiscal year 2024, compared to 2.2% in the prior year period. The increase was primarily due to an increase in sales staff to capture business growth opportunities.
Research and development expenses decreased by $1.1 million, or 14.2%, to $7.2 million in the fiscal year 2024, from $8.3 million in the prior year period. As a percentage of total revenues, research and development expenses decreased to 5.0% in the fiscal year 2024, compared to 5.5% in the prior year period. The decrease was primarily due to a strategic realignment of our R&D department.
General and administrative expenses increased by $3.5 million, or 16.1%, to $25.1 million in the fiscal year 2024, from $21.6 million in the prior year period. As a percentage of total revenues, general and administrative expenses increased to 17.6% in the fiscal year 2024, compared to 14.4% in the prior year period. The increase was primarily due to the establishment of our CDC and GTC, which supported our efforts to capture the anticipated growth in demand for customized IT solution services.
Operating (Loss) Income
Operating loss was $2.5 million, compared to an operating income of $76.4 thousand in the same period of the previous year. Operating margin was -1.8% in the fiscal year 2024, compared to 0.1% in the prior year period.
Other Income and Expenses
Total other income, net of other expenses was $0.70 million in the fiscal year 2024, compared to $0.69 million total other income, net of other expenses in the prior year period.
Provision for Income Taxes
Provision for income taxes was $0.2 million in the fiscal year 2024, compared to a provision for income taxes of $0.7 million in the same period of the previous year.
Net (Loss) Income and EPS
Net loss was $1.8 million in the fiscal year 2024, compared to a net income of $0.2 million in the prior year period.
Non-GAAP net income[1] decreased by $3.7 million, or 73.7%, to $1.3 million in the fiscal year 2024, from $5.0 million in the same period of the previous year.
Net loss attributable to CLPS Incorporation's shareholders was $2.3 million, or $0.09 basic and diluted losses per share in the fiscal year 2024, compared to net income attributable to CLPS Incorporation's shareholders of $0.2 million, or $0.01 basic and diluted earnings per share in fiscal year 2023.
Non-GAAP net income attributable to CLPS Incorporation's shareholders[2] was $0.8 million, or $0.03 basic and diluted earnings per share in the fiscal year 2024, compared to non-GAAP net income attributable to CLPS Incorporation's shareholders of $5.1 million, or $0.22 basic and diluted earnings per share in the fiscal year 2023.
Cash Flow
As of June 30, 2024, the Company had cash and cash equivalents of $29.1 million compared to $22.2 million as of June 30, 2023.
Net cash provided by operating activities was $8.9 million for the twelve months ended June 30, 2024. Net cash used in investing activities was $12.3 million. Net cash provided by financing activities was approximately $10.2 million. The effect of exchange rate change on cash was approximately negative $28.5 thousand. The Company believes that its current cash position and cash flow from operations are sufficient to meet its anticipated cash needs for at least the next 12 months.
Financial Outlook
Undeterred by the short-term challenges, we remain confident about our long-term business growth. For fiscal year 2025, the Company expects, considering our financial numbers could be affected by the floating exchange rate, and absent material acquisitions or non-recurring transactions, total sales growth in the range of approximately 12% to 17%, non-GAAP net income growth in the range of approximately 15% to 20% compared to fiscal year 2024 financial results.
This forecast reflects the Company's current and preliminary views, which are subject to change and are subject to risks and uncertainties, including, but not limited to various risks and uncertainties facing the Company's business and operations as identified in its public filings.
Exchange Rate
The balance sheet amounts with the exception of equity as of June 30, 2024, were translated at 7.2672 RMB to 1.00 USD compared to 7.2513 RMB to 1.00 USD as of June 30, 2023. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the periods ended June 30, 2024 and 2023 were 7.2248 RMB to 1.00 USD and 6.9536 RMB to 1.00 USD, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any underlying change in our business or results of operation.
About CLPS Incorporation
Headquartered in Hong Kong, CLPS Incorporation is a leading global information technology ("IT") consulting and solutions service provider, primarily focused on serving global institutions in the banking, wealth management, e-commerce, and automotive sectors. As an IT services provider for a growing network of clients within the fintech and financial services industry, CLPS has expanded its business beyond core IT services, venturing into the loan, e-commerce, academic education, and tourism sectors. Through its diversified offerings, CLPS is committed to providing comprehensive services and solutions for its clients. The Company maintains 20 delivery and/or research & development centers to serve different customers in various geographic locations. Mainland China centers are located in Shanghai, Beijing, Dalian, Tianjin, Xi'an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan. The remaining 10 global centers are located in Hong Kong SAR, USA, Japan, Singapore, Australia, Malaysia, India, Philippines, Canada, and UAE. For further information regarding the Company, please visit: https://ir.clpsglobal.com/, or follow CLPS on Facebook, Instagram, LinkedIn, X (formerly Twitter), and YouTube.
Forward-Looking Statements
Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company's control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All such statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties related to the Company's financial and operational performance in the second half and full year of fiscal 2024, its expectations of the Company's future performance, its preliminary outlook and guidance offered in this presentation, as well as the risks and uncertainties described in the Company's most recently filed SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.
Use of Non-GAAP Financial Measures
The consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the consolidated statement of changes in shareholders' equity, consolidated statements of cash flows, and the detailed notes have not been presented. The Company uses non-GAAP operating income (loss), non-GAAP general and administrative expenses, non-GAAP operating margin, non-GAAP net income (loss) attributable to CLPS Incorporation's shareholders, and basic and diluted non-GAAP earnings (losses) per share, which are non-GAAP financial measures. Non-GAAP operating income (loss) is operating income (loss) excluding share-based compensation expenses. Non-GAAP general and administrative expenses is a non-GAAP financial measure, which is defined as general and administrative expenses excluding share-based compensation expenses. Non-GAAP operating margin is non-GAAP operating income as a percentage of revenues. Non-GAAP net income (loss) attributable to CLPS Incorporation's shareholders is net income (loss) attributable to CLPS Incorporation's shareholders excluding share-based compensation expenses. Basic and diluted non-GAAP earnings (losses) per share is non-GAAP net income (loss) attributable to common shareholders divided by weighted average number of shares used in the calculation of basic and diluted net income per share. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation expenses clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measure for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measure is useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP and GAAP Results" near the end of this release.
Contact:
CLPS Incorporation
Rhon Galicha
Investor Relations Office
Phone: +86-182-2192-5378
Email: [email protected]
1 Non-GAAP net loss/income is a non-GAAP financial measure, which is defined as net loss/income excluding share-based compensation expenses. Please refer to the section titled "Reconciliation of Non-GAAP and GAAP Results" for details. |
2 Non-GAAP net loss/income attributable to CLPS Incorporation's shareholders is a non-GAAP financial measure, which is defined as net loss/income attributable to CLPS Incorporation's shareholders excluding share-based compensation expenses. Please refer to the section titled "Reconciliation of Non-GAAP and GAAP Results" for details. |
CLPS INCORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Amounts in U.S. dollars ("$"), except for number of shares) | ||||||||
As of | ||||||||
June 30, 2024 (Audited) | December 31, 2023 (Unaudited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 29,116,431 | 35,108,870 | ||||||
Restricted cash | 24,081 | 89,539 | ||||||
Short-term investments | 2,100,000 | - | ||||||
Accounts receivable, net | 38,779,209 | 39,092,817 | ||||||
Prepayments, deposits and other assets, net | 4,497,578 | 3,279,971 | ||||||
Amounts due from related parties | 3,559,109 | 465,582 | ||||||
Total Current Assets | $ | 78,076,408 | $ | 78,036,779 | ||||
Non-Current assets: | ||||||||
Property and equipment, net | 21,168,524 | 21,404,190 | ||||||
Intangible assets, net | 2,254,372 | 689,783 | ||||||
Operating lease right-of-use assets | 2,776,858 | 3,006,854 | ||||||
Goodwill | 1,473,899 | - | ||||||
Long-term investments | 613,807 | 612,843 | ||||||
Prepayments, deposits and other assets, net | 594,603 | 1,614,426 | ||||||
Amounts due from related parties | 2,374,298 | 422,541 | ||||||
Deferred tax assets, net | 697,047 | 115,975 | ||||||
Total Assets | $ | 110,029,816 | $ | 105,903,391 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Bank loans | $ | 23,232,856 | $ | 15,699,530 | ||||
Accounts payable | 949,137 | 925,425 | ||||||
Accrued expenses and other current liabilities | 799,495 | 379,474 | ||||||
Tax payables | 2,351,615 | 1,860,960 | ||||||
Contract liabilities | 1,139,001 | 1,189,953 | ||||||
Salaries and benefits payable | 9,941,541 | 13,228,752 | ||||||
Operating lease liabilities | 1,361,928 | 1,230,907 | ||||||
Amount due to related parties | 20,230 | 25,344 | ||||||
Total Current Liabilities | $ | 39,795,803 | $ | 34,540,345 | ||||
Non-Current liabilities: | ||||||||
Operating lease liabilities | 1,638,243 | 1,906,298 | ||||||
Deferred tax liabilities | 378,344 | 111,057 | ||||||
Unrecognized tax benefit | 3,413,850 | 2,843,667 | ||||||
Other non-current liabilities | 883,963 | 904,793 | ||||||
Total Liabilities | $ | 46,110,203 | $ | 40,306,160 | ||||
Commitments and Contingencies | ||||||||
Shareholders' Equity | ||||||||
Common shares, $0.0001 par value, 100,000,000 shares authorized; | 2,564 | 2,562 | ||||||
Additional paid-in capital | 61,351,200 | 60,914,080 | ||||||
Statutory reserves | 5,553,104 | 5,517,142 | ||||||
(Accumulated deficit) retained earnings | (51,728) | 826,631 | ||||||
Accumulated other comprehensive losses | (4,345,902) | (3,116,935) | ||||||
Total CLPS Incorporation's Shareholders' Equity | 62,509,238 | 64,143,480 | ||||||
Noncontrolling Interests | 1,410,375 | 1,453,751 | ||||||
Total Shareholders' Equity | 63,919,613 | 65,597,231 | ||||||
Total Liabilities and Shareholders' Equity | $ | 110,029,816 | $ | 105,903,391 | ||||
CLPS INCORPORATION | |||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS | |||||||||||||
(Amounts in U.S. dollars ("$"), except for number of shares) | |||||||||||||
For the six months ended June 30, | |||||||||||||
2024 | 2023 | ||||||||||||
Revenue | $ | 71,038,525 | $ | 73,595,728 | |||||||||
Cost of revenue (note 1) | (53,841,552) | (57,574,881) | |||||||||||
Gross profit | 17,196,973 | 16,020,847 | |||||||||||
Operating income (expenses): | |||||||||||||
Selling and marketing expenses (note 1) | (1,849,118) | (616,480) | |||||||||||
Research and development expenses | (3,961,031) | (3,977,785) | |||||||||||
General and administrative expenses (note 1) | (13,935,384) | (10,946,729) | |||||||||||
Impairment of goodwill | - | (2,382,538) | |||||||||||
Subsidies and other operating income | 926,159 | 635,368 | |||||||||||
Total operating expenses | (18,819,374) | (17,288,164) | |||||||||||
Losses from operations | (1,622,401) | (1,267,317) | |||||||||||
Other income | 943,448 | 723,695 | |||||||||||
Other expenses | (358,372) | (246,662) | |||||||||||
Loss before income tax and share of income in equity | (1,037,325) | (790,284) | |||||||||||
(Benefit) provision for income taxes | (176,838) | 489,148 | |||||||||||
Loss before share of income in equity investees | (860,487) | (1,279,432) | |||||||||||
Share of income in equity investees, net of tax | 6,632 | 47,686 | |||||||||||
Net loss | (853,855) | (1,231,746) | |||||||||||
Less: Net loss attributable to noncontrolling interests | (11,425) | (156,845) | |||||||||||
Net loss attributable to CLPS Incorporation's | $ | (842,430) | $ | (1,074,901) | |||||||||
Other comprehensive loss | |||||||||||||
Foreign currency translation loss | $ | (1,260,918) | $ | (2,785,938) | |||||||||
Less: Foreign currency translation loss attributable | (31,951) | (57,097) | |||||||||||
Other comprehensive loss attributable to CLPS | $ | (1,228,967) | $ | (2,728,841) | |||||||||
Comprehensive loss attributable to | |||||||||||||
CLPS Incorporation's shareholders | $ | (2,071,397) | $ | (3,803,742) | |||||||||
Comprehensive loss attributable to noncontrolling | (43,376) | (213,942) | |||||||||||
Comprehensive loss | $ | (2,114,773) | $ | (4,017,684) | |||||||||
Basic losses per common share | $ | (0.03) | $ | (0.05) | |||||||||
Weighted average number of share outstanding – basic | 25,619,294 | 23,629,200 | |||||||||||
Diluted losses per common share | $ | (0.03) | $ | (0.05) | |||||||||
Weighted average number of share outstanding – diluted | 25,619,294 | 23,629,200 | |||||||||||
Note: | |||||||||||||
(1) Includes share-based compensation expenses as Cost of revenues | 5,658 | 5,141 | |||||||||||
Selling and marketing expenses | 82,615 | 68,969 | |||||||||||
General and administrative expenses | 348,850 | 461,114 | |||||||||||
CLPS INCORPORATION | ||||||||
RECONCILIATION OF NON-GAAP AND GAAP RESULTS- UNAUDITED | ||||||||
(Amounts in U.S. dollars ("$"), except for number of shares) | ||||||||
For the six months ended | ||||||||
June 30, | ||||||||
2024 | 2023 | |||||||
Cost of revenue | $ | (53,841,552) | $ | (57,574,881) | ||||
Less: share-based compensation expenses | (5,658) | (5,141) | ||||||
Non-GAAP cost of revenue | $ | (53,835,894) | $ | (57,569,740) | ||||
Selling and marketing expenses | $ | (1,849,118) | $ | (616,480) | ||||
Less: share-based compensation expenses | (82,615) | (68,969) | ||||||
Non-GAAP selling and marketing expenses | $ | (1,766,503) | $ | (547,511) | ||||
General and administrative expenses | $ | (13,935,384) | $ | (10,946,729) | ||||
Less: share-based compensation expenses | (348,850) | (461,114) | ||||||
Non-GAAP general and administrative | $ | (13,586,534) | $ | (10,485,615) | ||||
Operating losses | $ | (1,622,401) | $ | (1,267,317) | ||||
Add: share-based compensation expenses | 437,123 | 535,224 | ||||||
Add: Impairment of goodwill | - | 2,382,538 | ||||||
Non-GAAP operating (loss) income | $ | (1,185,278) | $ | 1,650,445 | ||||
Operating margin | (2.3 %) | (1.7 %) | ||||||
Add: share-based compensation expenses | 0.6 % | 0.7 % | ||||||
Add: Impairment of goodwill | - | 3.2 % | ||||||
Non-GAAP operating margin | (1.7 %) | 2.2 % | ||||||
Net losses | $ | (853,855) | $ | (1,231,746) | ||||
Add: share-based compensation expenses | 437,123 | 535,224 | ||||||
Add: Impairment of goodwill | - | 2,382,538 | ||||||
Non-GAAP net (loss) income | $ | (416,732) | $ | 1,686,016 | ||||
Net losses attributable to CLPS Incorporation's | $ | (842,430) | $ | (1,074,901) | ||||
Add: share-based compensation expenses | 437,123 | 535,224 | ||||||
Add: Impairment of goodwill | - | 2,382,538 | ||||||
Non-GAAP net (loss) income attributable to | (405,307) | 1,842,861 | ||||||
$ | $ | |||||||
Weighted average number of share | 25,619,294 | 23,629,200 | ||||||
GAAP basic losses per common share | $ | (0.03) | $ | (0.05) | ||||
Add: share-based compensation expenses | 0.01 | 0.13 | ||||||
Non-GAAP basic (losses) earnings per | $ | (0.02) | $ | 0.08 | ||||
Weighted average number of share | 25,619,294 | 23,629,200 | ||||||
Weighted average number of share | 25,619,294 | 23,629,200 | ||||||
GAAP diluted losses per common share | $ | (0.03) | $ | (0.05) | ||||
Add: share-based compensation expenses | 0.01 | 0.13 | ||||||
Non-GAAP diluted (losses) earnings per | $ | (0.02) | $ | 0.08 | ||||
CLPS INCORPORATION | |||||
audited CONSOLIDATED BALANCE SHEETS | |||||
(Amounts in U.S. dollars ("$"), except for number of shares) | |||||
As of June 30, | |||||
2024 | 2023 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 29,116,431 | $ | 22,214,029 | |
Restricted cash | 24,081 | 87,604 | |||
Short-term investments | 2,100,000 | - | |||
Accounts receivable, net | 38,779,209 | 48,515,467 | |||
Prepayments, deposits and other assets, net | 4,497,578 | 1,665,736 | |||
Amounts due from related parties | 3,559,109 | 391,271 | |||
Total Current Assets | 78,076,408 | 72,874,107 | |||
Non-current assets: | |||||
Property and equipment, net | 21,168,524 | 20,112,305 | |||
Intangible assets, net | 2,254,372 | 726,175 | |||
Goodwill | 1,473,899 | - | |||
Operating lease right-of-use assets | 2,776,858 | 815,324 | |||
Long-term investments | 613,807 | 456,598 | |||
Prepayments, deposits and other assets, net | 594,603 | 252,656 | |||
Amounts due from related parties | 2,374,298 | - | |||
Deferred tax assets, net | 697,047 | 81,899 | |||
Total Assets | $ | 110,029,816 | $ | 95,319,064 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Current liabilities | |||||
Bank loans | $ | 23,232,856 | $ | 10,554,617 | |
Accounts payable | 949,137 | 690,035 | |||
Accrued expenses and other current liabilities | 799,495 | 324,021 | |||
Tax payables | 2,351,615 | 2,503,375 | |||
Contract liabilities | 1,139,001 | 918,470 | |||
Salaries and benefits payable | 9,941,541 | 10,586,239 | |||
Operating lease liabilities | 1,361,928 | 712,302 | |||
Amounts due to related party | 20,230 | 24,889 | |||
Total Current Liabilities | 39,795,803 | 26,313,948 | |||
Non-current liabilities | |||||
Operating lease liabilities | 1,638,243 | 104,114 | |||
Unrecognized tax benefits | 3,413,850 | 2,320,918 | |||
Deferred tax liabilities | 378,344 | 185,382 | |||
Other non-current liabilities | 883,963 | 885,901 | |||
Total Liabilities | 46,110,203 | 29,810,263 | |||
Commitments and Contingencies | |||||
Shareholders' Equity | |||||
Common shares, $0.0001 par value, 100,000,000 shares | 2,564 | 2,365 | |||
Additional paid-in capital | 61,351,200 | 58,183,383 | |||
Statutory reserves | 5,553,104 | 5,356,828 | |||
Retained earnings | (51,728) | 5,029,021 | |||
Accumulated other comprehensive losses | (4,345,902) | (3,990,594) | |||
Total CLPS Incorporation's Shareholders' Equity | 62,509,238 | 64,581,003 | |||
Noncontrolling Interests | 1,410,375 | 927,798 | |||
Total Shareholders' Equity | 63,919,613 | 65,508,801 | |||
Total Liabilities and Shareholders' Equity | $ | 110,029,816 | $ | 95,319,064 | |
CLPS INCORPORATION | ||||||||
AUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS | ||||||||
(Amounts in U.S. dollars ("$"), except for number of shares) | ||||||||
For the years ended June 30, | ||||||||
2024 | 2023 | |||||||
Revenue from third parties | $ | 142,725,554 | $ | 150,298,963 | ||||
Revenue from related party | 87,172 | 57,576 | ||||||
Cost of revenue from third parties (note 1) | (109,795,857) | (115,827,597) | ||||||
Cost of revenue from related party | (69,738) | (47,212) | ||||||
Gross profit | 32,947,131 | 34,481,730 | ||||||
Operating income (expenses): | ||||||||
Selling and marketing expenses (note 1) | (4,573,344) | (3,300,555) | ||||||
Research and development expenses | (7,155,949) | (8,336,999) | ||||||
General and administrative expenses (note 1) | (25,120,010) | (21,641,317) | ||||||
Impairment of goodwill | - | (2,382,538) | ||||||
Subsidies and other operating income | 1,363,757 | 1,256,070 | ||||||
Total operating expenses | (35,485,546) | (34,405,339) | ||||||
(Loss) income from operations | (2,538,415) | 76,391 | ||||||
Other income | 1,251,465 | 1,123,612 | ||||||
Other expenses | (556,415) | (430,357) | ||||||
(Loss) income before income tax and share of | (1,843,365) | 769,646 | ||||||
Provision for income taxes | 160,725 | 674,344 | ||||||
(Loss) income before share of income in equity | (2,004,090) | 95,302 | ||||||
Share of income in equity investees, net of tax | 156,780 | 70,263 | ||||||
Net (loss) income | (1,847,310) | 165,565 | ||||||
Less: Net income (loss) attributable to noncontrolling | 482,655 | (26,964) | ||||||
Net (loss) income attributable to CLPS | $ | (2,329,965) | $ | 192,529 | ||||
Other comprehensive loss | ||||||||
Foreign currency translation loss | $ | (355,386) | $ | (3,532,507) | ||||
Less: Foreign currency translation loss attributable | (78) | (92,161) | ||||||
Other comprehensive loss attributable to CLPS | $ | (355,308) | $ | (3,440,346) | ||||
Comprehensive loss attributable to | ||||||||
CLPS Incorporation's shareholders | $ | (2,685,273) | $ | (3,247,817) | ||||
Comprehensive income (loss) attributable to | 482,577 | (119,125) | ||||||
Comprehensive loss | $ | (2,202,696) | $ | (3,366,942) | ||||
Basic (losses) earnings per common share | $ | (0.09) | $ | 0.01 | ||||
Weighted average number of share outstanding – | 25,213,012 | 23,153,976 | ||||||
Diluted (losses) earnings per common share | $ | (0.09) | $ | 0.01 | ||||
Weighted average number of share outstanding – | 25,213,012 | 23,153,976 | ||||||
Note: | ||||||||
(1) Includes share-based compensation expenses Cost of revenues | 11,467 | 16,212 | ||||||
Selling and marketing expenses | 275,562 | 129,060 | ||||||
General and administrative expenses | 2,880,987 | 2,333,024 | ||||||
CLPS INCORPORATION | ||||||||
RECONCILIATION OF NON-GAAP AND GAAP RESULTS- UNAUDITED | ||||||||
(Amounts in U.S. dollars ("$"), except for number of shares) | ||||||||
For the years ended | ||||||||
June 30, | ||||||||
2024 | 2023 | |||||||
Cost of revenue | $ | (109,865,595) | $ | (115,874,809) | ||||
Less: share-based compensation expenses | (11,467) | (16,212) | ||||||
Non-GAAP cost of revenue | $ | (109,854,128) | $ | (115,858,597) | ||||
Selling and marketing expenses | $ | (4,573,344) | $ | (3,300,555) | ||||
Less: share-based compensation expenses | (275,562) | (129,060) | ||||||
Non-GAAP selling and marketing expenses | $ | (4,297,782) | $ | (3,171,495) | ||||
General and administrative expenses | $ | (25,120,010) | $ | (21,641,317) | ||||
Less: share-based compensation expenses | (2,880,987) | (2,333,024) | ||||||
Non-GAAP general and administrative | $ | (22,239,023) | $ | (19,308,293) | ||||
Operating (loss) income | $ | (2,538,415) | $ | 76,391 | ||||
Add: share-based compensation expenses | 3,168,016 | 2,478,296 | ||||||
Add: Impairment of goodwill | - | 2,382,538 | ||||||
Non-GAAP operating income | $ | 629,601 | $ | 4,937,225 | ||||
Operating margin | (1.8 %) | 0.1 % | ||||||
Add: share-based compensation expenses and | 2.2 % | 3.2 % | ||||||
Non-GAAP operating margin | 0.4 % | 3.3 % | ||||||
Net (loss) income | $ | (1,847,310) | $ | 165,565 | ||||
Add: share-based compensation expenses | 3,168,016 | 2,478,296 | ||||||
Add: Impairment of goodwill | - | 2,382,538 | ||||||
Non-GAAP net income | $ | 1,320,706 | $ | 5,026,399 | ||||
Net (loss) income attributable to CLPS | $ | (2,329,965) | $ | 192,529 | ||||
Add: share-based compensation expenses | 3,168,016 | 2,478,296 | ||||||
Add: Impairment of goodwill | - | 2,382,538 | ||||||
Non-GAAP net income attributable to CLPS | $ | 838,051 | $ | 5,053,363 | ||||
Weighted average number of share outstanding | 25,213,012 | 23,153,976 | ||||||
GAAP basic (losses) earnings per common share | $ | (0.09) | $ | 0.01 | ||||
Add: share-based compensation expenses and | 0.12 | 0.21 | ||||||
Non-GAAP basic earnings per common share | $ | 0.03 | $ | 0.22 | ||||
Weighted average number of share outstanding | 25,213,012 | 23,153,976 | ||||||
GAAP diluted (losses) earnings per common share | $ | (0.09) | $ | 0.01 | ||||
Add: share-based compensation expenses and | 0.12 | 0.21 | ||||||
Non-GAAP diluted earnings per common share | $ | 0.03 | $ | 0.22 | ||||
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SOURCE CLPS
