Ispire Technology (ISPR) 11 Nov 242025 Q1 Earnings call transcript

Hello, everyone, and welcome to today's conference call to discuss Ispire's financial results for the fiscal first quarter 2025 ended September 30, 2024. At this time, I'd like to inform you that, this conference call is being recorded [Operator Instructions].

Joining us today are Mr. Michael Wang, the company's Co-CEO; and Mr. Jim McCormick, the company's CFO.

Mr. First, you key brief Mr. and the on will highlights, company's then Wang will results. financial the McCormick company's review

Before I the statements. conference XXXX. historical call Private we facts that Litigation All contains you begin, Securities announcement the forward-looking would statements like in other statements statements Act its within Reform meaning than the remind of of to of this forward-looking are

to by the trends, company its in on conditions historical implied current or that involve included no differ company's to the Forward-looking and actual to now assumptions update its ahead. company risks are company many this its required and believes the may Please future in and forward-looking SEC. uncertainties, regarding performance based expected or materially factors are relevant. from as current These forward-looking and The events the Michael Mr. estimates the as the terms or results known statements those information as subsequent call statements the Wang. risk to undertakes by would statements turn to Wang. factors like and factors perception other go expressed circumstances statements. Further experience reflect cause developments could and are by company's made to obligation of other of and or well expectation, unknown with filings in be Mr. law. I except over changes forward-looking or

joining thank for you us and Thank all morning. operator, this you,

partially delayed in nicotine This as or a from of careful X.X% our our last This For period the generated ramp-up $XX.X impacted shipments business. measured of decrease the quarter, we by million, $X.X global as of was represents well and revenues same million. year.

revenue the shift #X decrease to strategy. U.S. is the the However, for due driver our in in

is business cannabis As from Hardware the reported previously, our industry. U.S. XXX% we

U.S. banking services of the on is stability, on the Revenue available will Internal enhancing flow, of know, XXXE general quarters, and quality last due business Ispire. In lead than Code our X and line Section of operation key industry challenge quality this we we industry. In cash customer the of all facing more focused to accounts of high-quality believe lack bottom to As the focused you we for largely the customers to quantity. strong better financial overall the have ultimately the portfolio other revenue our and rather words, have which

we U.S. from result, a the period saw As same decrease in last year. revenue

strong approach management. in better performance. payment fundamentals However, notable a receivable long-term we of U.S. lead this improvements to and margin, in operation, better seeing on We gross believe gross focusing also will receivable accounts financial more account sustainable and have with terms margin, started our terms payment

believe reflects encouraging higher higher lower and deliver of were strategic and to gross enhanced on what with to seeing initiatives vaping dosing is the profit validate accounts resonate which technology margin a year-over-year This increase strategic step direction. And our that profit operational high-quality quarter, achieved Malaysian XXXX same facility. We our previous especially the particularly profitability through quarter we results metrics. to our XX.X% report XX.X% use margin and continue this line to is revenue XX% million, are expect in these of this we gross improvements and revenue, is While solutions consumers. period including improvements in notable and to have innovative saw able taken with as our pleased the top in expanded We gross the our $X.X we directly year. temporarily I'm we be the substantial delivered nature, significant our dip a precision from the focus of success to first fiscal efficiency, in that in right dip a gross key

Malaysian facility. increase asset while our the state-of-the-art build to nicotine driving continues margin continues as expansion look help further drive to international in Our This operating which international footprint expansion down to by best-in-class our global momentum, market highlighted we is costs.

with access Chemular and technology point-of-use improve will creating verification next-generation experience. This quarter, age our on make continued that progress we to for through and e-cigarettes a joint prevent Berify significant venture youth user

Wednesday XX. We our As on we the vape with this forward particularly first FDA security this cutting to for previously, have blockchain look using gating updating continued of that age advancement discussion we is hardware this excited this of -edge I outcome technology that November needs will regarding safety that understand the have and initiative. am transformative share a this and as the technology we investors is to stated in innovation critical industry. meeting

maintaining We for recently a strong X disposable again PMTA submitted regulatory are application as X for product we flavors. a also ENDS our flavors, posture

to XX We USD technology. system the close are as on U.S. submit nicotine is PMTA a application track finalizing are age market. XXXX gating This for in approximately further important we billion the capitalize aim to on Pod to step company for as we in the an

we remain global as front strategic to us opportunities we scaling business. nicotine ahead, our confident As in of and the the to take ability look significant in our capture we approach direction thoughtful

fill in boost automated up twice quarter to fast contrast methods subsequent to faster also of to I-XX given post compared revolutionary objective The quarter industry-changing efficiency being region see redefine seal X.X machine precision global we cigarettes. overall Chicago gram The I-XX leading savings will production current over the traditional the methods productivity capping, as manual Master I-XX in for it is Benzinga improvement need perfectly industry dosing world with our vapor systems. Current systems are at of is and significant technology device we solutions. Also, X,XXX% up for to landmark portfolio the devices have workflow the XXx of XXX% Agreement they a being eliminates vape helps nicotine Hills the as the and as Distributor to end, through markets. the cost our vape expanded fully Cannabis to Additionally, X,XXX device automated the per in than end, in our used, in to and and current offering Global and provider users announced machine partnership as must-have early the North our Hidden I-XX seeing. bring Club able current reach systems. I-XX Duty-Free fits new by harm-reduced the innovative, unveiling filling enable alternatives to efficiency The Conference October. hour. In and and to overall the adult ANDS to combustible a for will markets, Africa Middle X-Year us with consumers This best-in-class which East

Ispire this we as McCormick, continued mission advance will our technology will growth and and industry-leading position worldwide. With comment our vaping call for Jim who I of that the We over are confident CFO, success to on turn financial our results. collaboration providing review will that,

In financial the Thank our fiscal fiscal X are XXXX. you, the to Michael. for first All XXXX. to opportunity to I'd September otherwise XX, quarter key results unless XX, comments, September will prior like the XXXX the refer stated. summarize take months to I ended comparisons my this as XXXX, quarter first year-ended

million or million $XX.X our fiscal last by was by approximately This period improved gross regions. European in as QX $X.X $X.X following North In key previous XXXX first result we year. of lower vaping XXXX over million, This quarter slightly million increased was decline of America, X.X% across As Ispire sales increased $X.X XX% previously. year. to margins, year. performance million, of or was fiscal Overall, in by revenue. in higher with in achieved compared revenues of approximately driven QX decrease decrease vaping to to as products the revenue or the the represented XX% revenues primarily The by a our compared cannabis period U.S., revenue the Michael total even profit, sales the $XX driven mentioned the same a for the Michael region. decreased same last of hardware a mentioned,

were million, Asia same a decrease $X.X $X.X of to million period compared the approximately year. Pacific last revenues

million, Africa For due million. of last the rest level from the same million $X.X increased of an world, sales were $X.X increase the of $X.X an South in period of year to revenues

XX%. in X year. period, our XX, this compensation. as gross million, professional an support was to increase During to in approximately $X.X contract fees, for increase wages, September ended due $X.X first footprint areas XXXX, million profit $XX.X primarily payroll, September well primarily months increase ended Over in XXXX. Total with during compared due for business to gross first fiscal gross the the the the million quarter year. favorable fiscal $X.X XX, XX, approximately profit were mix and XX.X% This operating ended being same in margin last the the stock-based XXXX, margin expanded was increased same compared last period gross period changes The the quarter million, from product to sales was and expenses September to our to approximately marketing, of approximately higher sold as grew for margin expenses same products

As $X.XX quarter or for September per our of per loss fiscal share was a $X.X million, $X.X compared million, ended XXXX. these $X.XX a share or net loss result net activities, of the first to XX,

of to activities with no for of review company's was Net the September quarter used for investing operating $XX.X cash Michael. year. the that, compared capital I $X.X period $XX.X same financing the the XXXX for last of compared the will turn XX, first was $XX.X ended million the the results. XXXX. With activities activities was in activities $X.X first a investing end in quarter As in period million. Net compared provided the cash million by Ispire's million of year. back the this the to to used $X.X There last balance working in used million for million $X.X first quarter over cash XXXX, cash call operating same in fiscal fiscal financial in position activities was fiscal fiscal XXXX, financing activities to used million X-month first period now quarter concludes of provided

Thanks, Jim.

close continued we I'm we that have to this quarter, our significant global As across make lines. progress business pleased

the to of softened were gross the our margin, of revenue shipments, our While timing innovative product we portfolio. achieve growth major able our to the U.S. shift strategy in in and strength due reflecting slightly still

operations. on our and efficient strategic as relationships, well the Our higher customer as of quality Malaysian state-of-the-art focus global use facilities

critical our the to initiative. We our We committed fiscal an age also with this transformative technology, industry operational as we in transformative remain venture from to to joint on milestone securing profitability FDA the build excellence discuss fast-tracked XXXX. the year a meeting important momentum gating reached and develop

of move today, sharing we and our quarter your second profitable XXXX, we continued all you and us sustained the for for continued time thank again growth. I position into well forward progress our to to we ahead. quarters As in would forward are like confident the fiscal investments look innovation strategic the

our completes ahead. this have If are remarks, questions, questions. prepared us through any email ir@ispiretechnology.com. Operator, Please you contact to go open and please we at now

[Operator first today Instructions] Pei Securities. comes Bo The question Tiger from U.S. with

U.S. first is So, shift in our my about market. the question strategic

So, it Or is more a, should meaning in period the we I that quarter? it a a the like about recover So, more bottom U.S. first quarter? to guess, second revenue? Is in fiscal start longer our effect? starting will it like think

U.S. quarter cannabis-related say, reported, the quarter, out. should bottom the last would I the revenue, So, meaning first

Our before. repositioning of the strategy really started quarter the

assisted Certainly, accounts. financial the with decision. We much effect just XX by on accounts. have machine. the our of to toward, quarter year, reflected U.S. out primary top next say, this strategy strongly filling repositioned believe is recent bottomed the So, going entertaining completely the have focus we focus top I-XX and XX introduction as that the of shifted the And our is be but primary we the we let's are

because Ispire the I the the line, simplicity involved the that's product previously of customers tested love As self-sealing and in efficiency, have filling hardware packing reported, ONE the really who our line, all device.

the have on last filling X been capacity for we months, a higher working However, machine.

had X machine only first-generation needle. The

you filled each still within time. only at device X a fill can even be So, though could device seconds, XX

name we moved efficiency. And So, improved we to launched machine, a hence XX-needle production machine then the I-XX. or the the that much X-needle finally, device

need is, process a XX tray can single on minutes, without needles XX with capping the X how you device. the of fast imagine that filling just especially in whole devices So,

for it, our up negotiations machine sped had the we it while. MSOs several been a that certainly, and launched this with waiting and large after accounts So, conversations for

up, hand, accounts the few one our revenue MSO, quarters, accounts U.S. with in side signing on have Bo. coming believe the on only their increase, strongly reordering. will additionally, large So, prior new the And we accelerated

revenue that. and you expect Maybe And hear can fiscal the with total the That's the good helpful is shift to question the and do my in also revenue? U.S., about talk in total to second strategy year? grow you then the revenue in the XXXX still U.S.

Yes.

quarter overall very Even we very -- the terms still about encouraging of though very, first be we year. in result that year confident we still will the full For are a revenue, rate. the dip, are very our saw are optimistic growth

Of grow pace same last course, we striving we to the are as at that with confident year, are and endeavor.

think, to U.S. exceed overall, X the in year, of Bo. to I from revenue, meet more given revenue U.S., year. Specifically, our course, come should quarters But the go fiscal last we initiatives, to or striving global are, still nicotine global

fiscal going margin Got it. shift? from than this or XXXX, And a about profit then the revenue declined bit Is how Can And think for little quite should just a talk XX%. bit actually you maybe total gross there? but the to margin U.S. less the for I mean, gross from margin, year? about sequentially quarter a profit strategy fiscal we about XX.X% driver forward, gross then fourth grew it

Yes.

will I have corresponding parts. to On revenue increase. and X into margin one break gross the U.S. So hand, down continued its

more over relationships, because initial well we and that strategy, our gross as on. same a to view, be be point of deal the last of our can do of seems back, mainly And as negotiation from to of -- will any price then margin, great lower imagine, a track. Relative beginning quarter inefficiency of the So this with as is more execution from quarters accounts large involved. And there ODM relationship you European XX.X% like and a couple from point in you still a early up any picking customer is before. of was should And of some mentioned both our That are of supply peak new with on work, labor as ours, is increase, because a learning certainly the side chain view. than efficiency ODM there brand. time, leverage

the So the same out, margin. gross like I last driven margin a is with back. say a in an from That would relatively pointed that revenue we speaking, increase peak quarter contributor the to gross still the Bo. was by a to lower quarters of relative you cannabis/U.S. higher key couple a quarter saw indeed But year, margin,

my And about question our receivable. it. Got is accounts last

accounts So the cash flow should strategic sheet operating receivable activities? shift should also now we some on to U.S., the balance with in in see line to expect when related cash the when the we improvement in that flow the see the improvement statement,

that Yes. a This is asked. much bigger question you

nicotine operation. Right we'll phase strongly initiative. only is global AR normalized a by improvement, but global more as your importantly, I think our from are of quarter, -- part will the now, question quarter. That, I'll break we business down into X to nicotine the parts. believe by not the cash I a more we of we will cycle second then, first start positive actually normal the and of early flow March cash flow-wise, by flow. not as striving turn the current answer far course, it's of in into result still a Cash get the are

you As there a attack enter time heavy a is flow. channel, you new gets know, you market, before a lifting normal any into rather everything new

that's our side. flow So to quarter. And we strongly and turn why strategy we'll in the positive now believe AR execution, cash back the with March

you recent about before. AR quarter this only $X As million quarter the versus saw, increased actually

increasing million. is our AR So, hand, effect. an $XX.X total that, it's on having indication one with million only and strategy of revenue the by $X U.S.

payment On diligently the have with collecting reinforcing the a customers. has base on agreements we also it's AR, a that other hand, team broader reflection in the worked

all quarter as the well. the the AR we will next into way So continue on think this and quarter side progress that

think And to we of increase I now view, healthy the hoping into slowed. are rapid point has So from get cadence, an Bo. a AR

for This to Instructions] [Operator the question-and-answer turn closing like concludes conference our session. Michael back would I to remarks. over any

you the please once your reach And forward questions, free I today. out. to call. you for the you. all any Thanks thank again. meanwhile, look Thank In to again, if want time next We to feel have

you is presentation. now Thank for conference attending The concluded. today's

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