CLPS (CLPS) H2 2025 earnings summary

Executive summary

• Revenue grew 15.2% year-over-year to $164.5 million for fiscal 2025, driven by IT consulting services and strong international expansion, especially in APAC markets.

• A major client’s restructuring led to significant one-time severance costs, resulting in a net loss of $6.4 million for the year; adjusted net income excluding these costs was $78,000.

• The company accelerated its strategic shift toward high-value AI and RPA projects and diversified its client base, reducing client concentration risk.

Financial highlights

• IT consulting services revenue rose 16.0% to $158.8 million, accounting for 96.5% of total revenue.

• Revenue outside mainland China surged 90.5% to $42.5 million, with Singapore, Hong Kong SAR, and Japan showing triple-digit growth rates.

• Gross profit increased 10.2% to $36.3 million; gross margin slightly declined due to higher costs.

• Operating loss widened to $5.4 million from $2.5 million year-over-year; operating margin was -3.3%.

• Net loss attributable to shareholders was $7.0 million, or $0.26 per share; non-GAAP net loss was $4.5 million, or $0.16 per share.

• Accounts receivable turnover improved to 92 days from 111 days.

Outlook and guidance

• Fiscal 2026 sales growth expected in the range of 10% to 15% year-over-year.

• Non-GAAP net income forecasted between $4.4 million and $5.0 million.

• Guidance excludes material acquisitions or non-recurring transactions and is subject to exchange rate fluctuations and other risks.