$Ispire Technology (ISPR.US)$ Announced its financial performance for the 2024 fiscal year ending June 30, 2024, and submitted its 10-K annual report to the SEC on September 26, 2024.
Financial performance for the 2024 fiscal year.
Revenue increased by 31.4% to 0.1519 billion US dollars, compared to 0.1156 billion US dollars in the same period of the 2023 fiscal year.
Gross profit increased by 43.3% to 29.8 million US dollars, compared to 20.8 million US dollars in the same period of the 2023 fiscal year.
Gross margin increased to 19.6%, compared to 18.0% in the same period of the 2023 fiscal year.
Total operating expenses increased by 73.0% to 43.7 million US dollars, compared to 25.3 million US dollars in the same period of the 2023 fiscal year; and
The net loss was 14.8 million US dollars, while the net loss for the same period in the fiscal year 2023 was 6 million US dollars.
Co-CEO Michael Wang of FogTech commented,
"The fiscal year 2024 is a foundational year for FogTech, with record revenue this year, increase in gross margin. At the same time, we have strategically positioned our global operations for faster growth, and intend to focus our cannabis vaporization-related hardware business on high-quality multi-state operators (MSO) customers.
Our revenue continues to grow, and we have established long-term strategic partnerships with industry leaders such as Acreage Holdings, Hidden Hills Club, Dank Pack, and international singer-songwriter Burna Boy to produce and sell the BRKFST brand. These collaborations help expand our market share, increase distribution channels, and strengthen our global operational infrastructure.
This year, we established an advanced factory in Malaysia covering 31,000 square feet, enhancing our manufacturing capabilities. We aim to seize international markets while reducing costs and increasing profitability. With increased production efficiency, we expect the facility to continue to achieve incremental profit margins.
We successfully completed a 12.3 million US dollar public offering this spring, which will help strengthen our financial position and expand international growth opportunities in areas such as electronic cigarettes and cannabis vaporization.
In addition, we have appointed key talents to strengthen our leadership team: Jim McCormick as Chief Financial Officer, John Patterson as Senior Vice President of International, and Dennis Lider as Senior Vice President of Vaporization Hardware Sales.
While celebrating our achievements, we are even more optimistic about the future development path. We will continue to focus on providing industry-leading validation solutions for vaporization devices and introducing cutting-edge technology in the US electronic cigarette market.
We recently submitted the first PMTA application in four years, involving disposable electronic cigarette products in four flavors. This is an important milestone for the company because our goal is to re-enter the US electronic cigarette market. While we continue to focus on driving performance growth through innovation, we are also committed to achieving sustainable profit margin growth. At the same time, we are taking appropriate measures for responsible marketing in line with company values.
We believe that these measures collectively focus on our ability to seize future market opportunities and bring long-term value to our shareholders.
Fogtech CFO Jim McCormick added: "Our performance in the 2024 fiscal year reflects our ability to successfully execute in various business sectors, especially given the enormous market scale of international markets, which we prioritize as key focus areas for revenue, profit margin, and future profit growth."
During 2024, we made thoughtful risk decisions on our cannabis business investments in the USA. As the year progressed, we not only expanded our customer base, increased sales to existing customers, and improved gross margins. Despite significant progress in market share, we also encountered some challenges, particularly due to slow customer payments caused by the systemic cash demands in the US cannabis industry.
These issues are largely related to the specific 280E requirements of the cannabis industry, and their continuation is due to the slow process of reclassifying cannabis-related products from Schedule I to Schedule III controlled substances. In addition, the current industry landscape and regulatory and tax environment put pressure on our customers' cash flow and ability to make timely payments.
Despite these challenges, we remain confident in the company's growth path. Our strategic adjustments position the company to drive growth plans in areas such as electronic cigarettes and cannabis vaporization, and refocus on quality investments. Furthermore, with the increased utilization of our production facility in Malaysia, we will continue to lower costs. The facility significantly enhances our production capacity, improves operational efficiency, and reduces product costs.
Financial Performance for the fiscal year ended June 30, 2024
Revenue for the fiscal year 2024 ended June 30, 2024, increased by 31.4% to $0.1519 billion, compared to $0.1156 billion for the same period in fiscal year 2023. The increase in revenue was primarily attributable to the comprehensive effects including US product sales increasing from $41.6 million for the fiscal year ended June 30, 2023, by $21.5 million, to $63.1 million for the fiscal year ended June 30, 2024; European vapor product sales increasing from $58.8 million for the fiscal year ended June 30, 2023, by $6.5 million, to $65.3 million for the fiscal year ended June 30, 2024; and other market vapor product sales increasing from $0.3 million for the fiscal year ended June 30, 2023, by $5.2 million, to $6 million for the fiscal year ended June 30, 2024, with the increase mainly stemming from sales growth in the South African market.
The gross margin reached $29.8 million as of the fiscal year ended June 30, 2024, compared to $20.8 million in the same period of the 2023 fiscal year. The gross margin was 19.6% for the fiscal year ended June 30, 2024, compared to 18.0% in the same period of the 2023 fiscal year. The increase in gross margin amount and margin percentage in the 2024 fiscal year was mainly due to adjustments in the product mix, focusing on high-margin products. The increase in sales volume brought about economies of scale, as well as the production efficiency of the company's facilities in Malaysia.
Total operating expenses were $43.7 million for the fiscal year ended June 30, 2024, compared to $25.3 million in the same period of the 2023 fiscal year. This growth was mainly driven by expenses incurred to support business expansion in salaries and contract wages, sales and marketing expenses, professional fees, and additional stock compensation.
The net loss for the fiscal year ended June 30, 2024, was $14.8 million, or a net loss of $0.27 per share, compared to a net loss of $6 million, or a net loss of $0.12 per share, in the same period of the 2023 fiscal year.
As of June 30, 2024, Fog Technology's cash and cash equivalents were approximately $35.1 million, with operating capital of $16.6 million.
Non-GAAP Financial Information
Given the limitations of these adjustments, you should consider the adjusted Non-GAAP along with our other GAAP-based financial performance indicators such as net income (loss) and our other GAAP financial results.
Fog Hemp Technology
Consolidated balance sheet
(In US dollars, excluding number of shares and per share data)
