On February 10th, Ispire (Nasdaq: ISPR), hereinafter referred to as "Ispire," announced on its official website its financial performance for the second quarter of the 2025 fiscal year ending on December 31, 2024.
The highlights of the performance report are as follows:
In the second quarter of the 2025 fiscal year, revenue reached $41.8 million, slightly higher than the $41.7 million in the second quarter of the 2024 fiscal year. The increase in revenue was mainly attributed to increased sales contributions from overseas expansion. Gross profit was $7.7 million, a 23.5% increase from the $6.3 million in the same period last year, with a gross profit margin of 18.5%. This increase was primarily due to changes in product mix, selling more higher-margin products in the three months ending December 31, 2024. Operating expenses totaled $15.1 million, a 48% increase from the $10.2 million in the previous fiscal year, mainly due to increased revenue, continued investment in Malaysia, and increased expenses related to product development. Net loss was $8 million, an increase from the $4 million in the same period last year. As of December 31, 2024, Ispire had $34.4 million in cash and $6.1 million in operating funds.
CEO Michael Wang of Ispire stated,
Despite the challenging macroeconomic environment, we achieved significant results this quarter. One important milestone was the company's further expansion into international markets, with the recent launch of the BrkFst brand in Africa marking our first international nicotine licensing arrangement and product release. The BrkFst brand has seen early success, expanding to over 500 retail points in South Africa and Nigeria, including major chain stores like Pick n Pay and Forecourts. We implemented a comprehensive market activation strategy, with brand ambassadors hosting daily events in major metropolitan areas, playing a crucial role in establishing strong relationships with retailers and consumers. We now plan to accelerate our expansion strategy through additional strategic partnerships, with the company aiming to expand to over 2,000 stores in the next six months through these additional collaborations.
Additionally, Ispire's joint venture IKE Tech's PMTA component strategy presents a revolutionary opportunity. The company has successfully completed a pre-PMTA meeting with the FDA, who has expressed willingness to accept Ispire's component PMTA submission and consider it for priority review. The legal market size for electronic nicotine delivery systems in the United States is approximately $110 billion, with an additional potential of $70 billion in other markets. This presents a significant opportunity for our blockchain-based age verification technology that could potentially change the industry and help prevent youth access.
Ispire's Chief Financial Officer, Jim McCormick, added that
The board's approval of a stock buyback plan of up to $10 million reflects our confidence in the long-term potential of the company and our commitment to creating value for shareholders. In Malaysia, we have obtained a nicotine import and export license and are preparing to apply for a manufacturing license, which we expect will allow us to expand our operations to 70 production lines in a new factory. Following the end of the quarter, the company will relocate certain daily functions to Malaysia to further streamline business processes, with an expected annual reduction of $8 million in operating expenses. This balanced approach allows us to invest in our growth strategy while also providing returns for shareholders, and we believe this will continue to lead our success in the evolving global nicotine products market.
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