Armlogi Holding Corp. reported its financial results for the three months ended September 30, 2024, revealing a mixed performance compared to the same period in 2023. The company generated total revenue of $42.5 million, a slight increase from $41.2 million in the prior year. This growth was driven by a rise in warehousing services revenue, which increased to $14.0 million from $11.3 million, while revenue from transportation services decreased to $28.5 million from $29.7 million.

Despite the revenue growth, the company faced significant challenges in profitability. Gross profit turned negative, recording a loss of $3.6 million compared to a profit of $5.2 million in the same quarter of 2023. This decline was attributed to a substantial increase in costs of sales, which rose by 28% to $46.1 million, primarily due to higher freight expenses, increased lease costs, and rising employee salaries. Consequently, the company reported an operating loss of $7.3 million, a stark contrast to the $3.3 million profit from the previous year.

Net income for the quarter was a loss of $4.6 million, compared to a net income of $2.8 million in Q3 2023, marking a $7.4 million decrease. Basic and diluted earnings per share reflected this downturn, falling to $(0.11) from $0.07.

On the balance sheet, total current assets decreased to $31.7 million from $38.0 million as of June 30, 2024, with cash on hand dropping significantly to $2.9 million from $7.9 million. Total assets also declined from $167.0 million to $157.5 million, while total stockholders’ equity fell to $34.6 million from $39.2 million.

Strategically, Armlogi completed its initial public offering (IPO) on May 15, 2024, raising approximately $5.2 million in net proceeds. The company has been expanding its customer base, increasing from 83 to 156 active customers, primarily in the cross-border e-commerce sector. However, the company also reported increased general and administrative expenses, which rose to $3.7 million from $1.9 million, driven by higher office expenses and professional fees.

Overall, while Armlogi Holding Corp. experienced revenue growth, it faced significant challenges in profitability and cash flow, necessitating careful management of its operational costs and strategic initiatives moving forward.