Aeries Technology, Inc. reported its financial results for the third quarter and six months ended September 30, 2024, revealing significant challenges in revenue and profitability compared to the previous fiscal period. The company generated revenue of $16.9 million for Q3 2024, a decrease of 4% from $17.6 million in Q3 2023. Year-to-date revenue also saw a slight decline, totaling $33.5 million, down from $33.9 million in the same period last year. The decline in revenue was attributed to a ramp-down in existing client engagements and project closures, which offset growth from new clients.
Gross profit for Q3 2024 was $3.6 million, reflecting a 26% decrease from $4.8 million in Q3 2023. The gross profit margin decreased significantly, primarily due to reduced business from project-based consulting, which typically yields higher margins. Selling, general, and administrative (SG&A) expenses surged to $7.7 million in Q3 2024, a 130% increase from $3.3 million in Q3 2023, driven by a provision for expected credit loss on customer receivables and increased employee compensation.
The company reported a net loss of $2.3 million for Q3 2024, compared to a net income of $927,000 in Q3 2023. For the six months ended September 30, 2024, the net loss was $17.6 million, a stark contrast to a net income of $1.4 million for the same period in 2023. The accumulated deficit increased significantly to $(28.7 million) as of September 30, 2024, from $(11.7 million) at the end of the previous fiscal year.
Aeries Technology's total assets rose to $52.0 million as of September 30, 2024, up from $49.4 million in March 2024, while total liabilities increased to $53.3 million from $50.6 million. The company’s working capital deficit stood at $9.8 million, primarily due to current liabilities related to Forward Purchase Agreements (FPAs) from its recent business combination.
Strategically, Aeries completed a business combination with Aark Singapore Pte. Ltd. on November 6, 2023, which has been accounted for as a reverse recapitalization. This transaction has positioned Aark as an indirect subsidiary of Aeries, with Aeries holding a 38.24% stake. The company is also facing challenges due to a non-renewal notice from a significant customer, which is expected to result in an annual revenue loss of approximately $11.5 million.
To address its financial challenges, Aeries has implemented cost-cutting measures, including reductions in non-core expenses and selective headcount and salary reductions. The company is also exploring options to raise additional funds and restructure its liabilities.
About Aeries Technology, Inc.
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