Armlogi Holding Corp (BTOC) 2025 Q4 法說會逐字稿

Thank you for standing by and welcome to the Armlogi Holding Corp Fiscal Year 2025 earnings call. Please note that today's call is being recorded. I'll now turn the meeting over to Matthew Abenante, Investor Relations for Armlogi Holding Corp.

Thank you, and thanks to everyone joining us today for Armlogi's earnings conference call to discuss the results of fiscal year 2025. Please note that our earnings press release was issued earlier today along with our annual report on Form 10-K, which was also filed with the Securities and Exchange Commission. Both are available in the investor relations section of our website at ir.armlogi.com.

Joining us on the call today is Aidy Chou, Chairman and CEO of Armlogi, and Scott Hsu, Chief Financial Officer. The format of our call will consist of brief comments, followed by a question-and-answer session addressing the questions submitted by investors. We thank everyone for submitting these questions. Before we begin, I will review the safe harbor statement. Please note that today's discussion will contain forward-looking statements.

Additionally, from time to time, we or our representatives may make forward-looking statements either orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including our financial performance and projections, growth in revenue and earnings, and business prospects and opportunities.

You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as may, should, expects, anticipates, contemplates, estimates, intends, believes, plans, projected, predicts, potential, or hopes, or the negative of each of these or similar terms.

In evaluating these forward-looking statements, you should consider various factors, including our ability to change the direction of the company, our ability to keep pace with new technology, and changing market needs, and the competitive environment of our business.

These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties or assumptions.

The forward-looking events discussed on this call and other statements made from time to time by us or our representatives may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us. And with that, I would like to hand the call over to Aidy Chou, Chairman and CEO of Armlogi. Good afternoon, Aidy.

Good afternoon, ma, and thank you everyone for joining us today. Fiscal 2025, the year of significant growth and a strategic investment for logic. Despite navigating operational challenges and the cost pressures, we achieved strong revenue growth, reflecting the demand for our comprehensive supply chain solutions. Our expanding our warehousing footprint and the customer base to position the company for long-term access.

As a US-based warehousing and logistics service provider, we continue to support cross-border e-commerce merchants and a domestic customer with a one-stop, including custom brokerage, transportation, warehouse management. and the order fulfillment. Our 10 warehouses, spending approximately 39,050,020 square feet across the US.

Equipped with the advanced system for handling bogy item and we maintain high standard, including ISO 9,001 compliance, and an average inventory accuracy of 99.64%. I remain confident that our expanding footprint technology platform and a growing customer base position as well to capture future opportunities. With that, I would turn the call over to our CFO Scott Hsu, for a close look at the numbers.

Thank you, Aidy. Now, let's turn to our financial performance for the fiscal year 2025. For detailed breakdown of our financial results, I encourage you to refer to our earning press release and our Form 10-K, both of which are available on our investor relations website. My comments here will provide a high-level overview.

For the fiscal year in June 30, 2025, total revenue reached $190.4 million, an increase of the 14% compared to the $167 million in fiscal year 2024. This growth was largely driven by the continued demand for our transportation, and the warehousing services, as well as a more than fourfold increase in our active customer base to 5,005.

Cost of sales for the year were the $193.4 million, representing a 29.9% increase. These higher costs were primarily due to increase the freight cost from our carriers, as well as the higher rental, labor, and the warehouse expense, associated with the expansion of our operation blueprint. This impacts our gross profit, resulting in a loss of the $3 million for the fiscal year.

We are actively implementing measures to improve efficiency and the possibility. General and admission expenses totaled $14.7 million, representing a 47.2% increase from the previous year, primarily due to the investments in support of our growing operations. This resulted in a net loss of the $15.3 million for the fiscal year or $0.37 per basic and the diluted share.

We end this year with a solid balance sheet, comprising $13.6 million in cash equivalent, and the restricted cash. Looking ahead, our focus is on optimization or the operations, leveraging our technology to drive efficiency and the broaden the cost management.

We are confident that our expanded infrastructures with 10 warehouses across the US, positions as well to capitalize on future opportunities in the cross-border e-commerce market. We remain committed to our growth strategy, and to creating a long-term value for our shareholders. With that comprehensive financial overview, I will return back to Matt for the questions.

Thank you, Scott. We will now move to the question-and-answer portion of the call. Thank you to everyone who has committed questions. What do you see as the main drivers of revenue growth for fiscal year 2026? And are there any new contracts or customers expected to have a material impact on results?

Thank you, Matt. Thank you for the question. For fiscal year 2026, we anticipate revenue growth to be primarily driven by continued demand for our comprehensive warehousing, and the logicity services, particularly from cross-border e-commerce merchants, and our expanding US best customer base.

Key factors include the population of our 10 warehouse network, which provides around $3.9 million square feet of space equipped for bulky items, and our folks on diversifying our customer mix beyond PRC based clients who account for around 84% of revenue in fiscal year 2025.

We are actively see the growth strategies outlined in our annual report, including expanding our geographic coverage and the enhancing our technology platform, such as on large order management system to improve efficiency and attract more clients.

Well, we do not disclose a specific contracts. We anticipate receiving contributions from the new customers in both domestic and the international market. However, no single new contract is expected to have a material impact on our result in this time.

When does management expect the company to achieve consistent profitability and positive free cash flow?

This is an important question, and we appreciate the focus on our path to profitability. We are implementing the measures to address these issues, including operational optimization, cost management, and diversification of carrier regulations to mitigate the industry work pressures.

Well, we do not provide specific guidance on timelines, we expect to see gradual improvement in margins, as our expanded footprints reach the fuller utilization and the efficiencies from technology investments take hold. Consistent profitability and the positive free cash flow are key priorities, and we anticipate progress to this course in the coming fiscal years.

Assuming stable market conditions and the successful execution of our growth strategies, we will continue to monitor external factors such as the trade policies and inflation. But our broader investment approach position as well for the sustainable financial health.

How concentrated is revenue among your largest customers, and how does Armlogi plan to differentiate itself from larger logistics competitors or regional operators?

Customer concentration is a key consideration in our industry in fiscal year 2025, when customers accounting for around the 10% of our revenue, down from the fiscal year 2024, when two customers representing 20% and the 12% respectively.

This reflects our ongoing efforts to diversify our customer base, which grow from 105 to 505 active customers over the year, with the mixed PRC base and the US based clients. To differential from the larger competitors and the regional operators, we leverage all competitive strength, high quality. I saw 9,001 compliance services with the 99.64% inventory accuracy and the 24/7 multilingual support.

Reasonable fees enabled by high volume processing and the long-term carrier agreements. Advanced technologies like all the call-based OMS for efficient order management and an experiment management team with a decade of industry expertise.

I'll focus on booking item handling, one-stop solution for cross-border e-commerce, and the national-wide warehouse coverage position, also uniquely to serve niche needs that larger players may overlook. Our agility enable us to out pass regional operators in terms of stability and the innovation.

Thank you to everyone for participating in today's call. We look forward to providing additional updates in the near future. In the meantime, you can reach us at info@armlogi.com or contact me directly at matthew@strategic- ir.com. Thank you.

Ladies and gentlemen, that concludes our conference for today. Thank you for your participation, and you may now disconnect.