CLPS Incorporation Reports Financial Results for the Second Half and Full Year of Fiscal 2025

HONG KONG, Oct. 17, 2025 — CLPS Incorporation (the “Company” or “CLPS”) (Nasdaq: CLPS) today announced its financial results for the six months and full year of fiscal 2025 ended June 30, 2025.

During the fiscal year, CLPS experienced a major challenge when a long-standing and historically largest client announced a broad downsizing of its technology workforce within its China Solution Centers in Dalian and Shanghai as part of a global restructuring. That restructuring required the reduction of most of CLPS’s dedicated IT staff serving the client and produced significant one-time employee severance expenses, which placed short-term pressure on net income. Excluding layoff compensation, adjusted net income for fiscal year 2025 was $78.0 thousand.

CLPS is addressing this challenge by accelerating strategic shifts to enhance revenue resilience: expanding high-value AI and RPA project work, and broadening its international footprint. Management expects these initiatives to drive improved financial performance in future periods. The Company remains focused on diversification, technology innovation, and international growth to create long-term shareholder value.

Unaudited Second Half of Fiscal 2025 Highlights (vs. six months ended June 30, 2024)

• Revenue increased 15.0% to $81.7 million from $71.0 million.
• Revenue from IT consulting services rose 16.9% to $78.7 million from $67.3 million.
• Revenue generated outside mainland China increased 77.1% to $23.5 million from $13.3 million, driven by strong growth in regional markets:

• Singapore: +96.1% to $12.4 million (from $6.3 million)
• Hong Kong SAR: +99.9% to $8.0 million (from $4.0 million)
• Japan: +174.6% to $1.1 million (from $0.4 million)

Audited Fiscal Year 2025 Highlights (vs. twelve months ended June 30, 2024)

• Total revenue increased 15.2% to $164.5 million from $142.8 million.
• Revenue from IT consulting services increased 16.0% to $158.8 million from $136.8 million.
• Revenue generated outside mainland China increased 90.5% to $42.5 million from $22.3 million. Key country growth:

• Singapore: +99.2% to $21.9 million (from $11.0 million)
• Hong Kong SAR: +130.5% to $14.4 million (from $6.2 million)
• Japan: +253.2% to $2.0 million (from $0.6 million)

• Gross profit increased 10.2% to $36.3 million from $32.9 million.
• Accounts receivable turnover improved to 92 days from 111 days.
• Clients in the IT services segment increased to 319 from 300.
• Total employees increased to 3,534 from 3,325.

Management Commentary

Raymond Lin, Chief Executive Officer: “This fiscal year demonstrated meaningful progress in building a more resilient and diversified business model. A key achievement was the significant reduction in client concentration risk as a result of our global expansion. Overseas revenue grew 90.5% to $42.5 million, driven mainly by APAC. We established operations in regional markets including Indonesia and Canada (which have begun generating revenue) and maintain a presence in Dubai. These moves position the Company for a more balanced global revenue stream and reduce regional concentration risk. Although the major client’s global restructuring created short-term operational and financial impacts, we also advanced strategic investments in our RPA product Nibot and AI solutions, which have moved into real-world applications and represent important long-term assets as we mark our 20th anniversary.”

Rui Yang, Chief Financial Officer: “Fiscal 2025 reflects robust top-line growth and the impact of non-recurring severance expenses related to the unexpected restructuring by a significant client. Our international operations—especially Singapore, Hong Kong SAR and Japan—show strong momentum, and working capital management improved accounts receivable days from 111 to 92. The one-time severance expenses affected short-term net income, but we are accelerating revenue diversification, including commercialization of Nibot and expanded AI offerings, to reduce reliance on any single client. We remain committed to financial discipline while investing in initiatives that enhance CLPS’s long-term competitive position.”

Second Half of Fiscal 2025 — Financial Results (Unaudited)

Revenues

Revenues for the second half of fiscal 2025 increased $10.7 million, or 15.0%, to $81.7 million from $71.0 million, primarily due to increased demand for IT consulting services.

Revenues by Service

• IT consulting services: $78.7 million (96.3% of total revenue), up 16.9% year-over-year.
• Customized IT solutions: $1.8 million (2.2% of total), down 4.7% year-over-year; management is pursuing new clients and market opportunities.
• Academic education services: $0.96 million (1.2% of total), down 7.8% year-over-year; integration following the College of Allied Educators (CAE) acquisition is ongoing and new courses are planned to boost enrollment.
• Other services: $0.2 million, down 71.1% year-over-year.

Revenues by Operational Area

• Banking: $30.6 million, up 6.6% (37.5% of second-half revenue).
• Wealth management: $13.9 million, down 18.4% (17.0% of second-half revenue).
• e-Commerce: $14.9 million, up 46.1% (18.2% of second-half revenue).
• Automotive: $11.6 million, up 65.6% (14.3% of second-half revenue).

Gross Profit

Gross profit was $17.15 million in the second half of fiscal 2025, nearly flat versus $17.20 million in the prior-year period.

Operating Expenses

• Selling and marketing: $2.7 million (3.3% of revenues), up 47.5% year-over-year due to expanded sales staff.
• Research & development: $2.5 million (3.1% of revenues), down 36.0% as some R&D staff were redeployed and reclassified to cost of revenues.
• General & administrative: $17.7 million (21.7% of revenues), up 27.3% year-over-year, primarily reflecting significant one-time severance costs. Excluding layoff compensation, G&A increased by 0.3% versus prior year.

Operating Loss

Operating loss was $5.5 million for the second half of fiscal 2025, compared with an operating loss of $1.6 million in the prior-year period. Operating margin was -6.8% vs. -2.3% in the prior-year period.

Other Income (Expense) and Taxes

Total other income, net, was $87.5 thousand in the second half of fiscal 2025. Provision for income taxes was $0.7 million, compared with a benefit of $0.2 million in the prior-year period.

Net Loss

Net loss for the second half of fiscal 2025 was $6.6 million, compared to a net loss of $0.9 million in the prior-year period. Non-GAAP net loss (excluding share-based compensation) was $6.1 million for the period. Net loss attributable to CLPS shareholders was $6.7 million, or $0.24 basic and diluted loss per share. Non-GAAP net loss attributable to shareholders was $6.2 million, or $0.22 per share.

Audited Fiscal Year 2025 — Financial Results

Revenues

Revenue for fiscal 2025 increased $21.7 million, or 15.2%, to $164.5 million from $142.8 million, primarily driven by IT consulting services.

Revenues by Service (Fiscal Year)

• IT consulting services: $158.8 million, up 16.0% year-over-year (96.5% of total revenue).
• Customized IT solutions: $2.8 million, down 11.6% year-over-year.
• Academic education services: $2.0 million, up 96.3% (full-year consolidation of CAE).
• Other services: $0.9 million, down 49.7% year-over-year.

Revenues by Geography (Fiscal Year)

Revenue generated outside mainland China increased $20.2 million, or 90.5%, to $42.5 million, reflecting strong APAC performance (Singapore, Hong Kong SAR and Japan) and the Company’s global expansion efforts.

Gross Profit & Operating Expenses (Fiscal Year)

Gross profit increased 10.2% to $36.3 million. Selling & marketing totaled $5.2 million (3.1% of revenues). R&D decreased to $5.8 million (3.5% of revenues) mainly due to reclassification of some R&D costs. G&A increased to $31.9 million, largely due to one-time severance costs and investments in the China Development Center and Global Testing Center.

Operating Loss & Net Loss (Fiscal Year)

Operating loss was $5.4 million (operating margin -3.3%). Other income, net, totaled $0.3 million. Provision for income taxes was $0.9 million. Net loss for fiscal 2025 was $6.4 million. Non-GAAP net loss was $3.8 million. Net loss attributable to CLPS shareholders was $7.0 million, or $0.26 per share. Non-GAAP net loss attributable to shareholders was $4.5 million, or $0.16 per share.

Cash Flow

As of June 30, 2025, cash and cash equivalents were $28.2 million (vs. $29.1 million as of June 30, 2024). Net cash used in operating activities was $2.5 million for the twelve months ended June 30, 2025. Net cash used in investing activities was $1.8 million, and net cash provided by financing activities was approximately $2.9 million. The Company believes current cash and expected cash flow are sufficient to meet anticipated needs for at least the next 12 months.

Financial Outlook

For fiscal year 2026, and assuming no material acquisitions or non-recurring transactions, CLPS currently expects total sales growth of approximately 10% to 15% year-over-year and non-GAAP net income in the range of approximately $4.4 million to $5.0 million. This outlook is preliminary and subject to risks and uncertainties described in the Company’s SEC filings.

Exchange Rate

Balance sheet amounts (except equity) as of June 30, 2025, were translated at 7.1636 RMB to 1.00 USD (compared to 7.2672 RMB to 1.00 USD as of June 30, 2024). Average translation rates for income statement accounts for the periods ended June 30, 2025 and 2024 were 7.2143 and 7.2248 RMB to 1.00 USD, respectively. Currency fluctuations may affect reported results in USD without reflecting underlying business changes.

About CLPS Incorporation

CLPS Incorporation (Nasdaq: CLPS), established in 2005 and headquartered in Hong Kong, provides digital transformation services including artificial intelligence, cloud computing, and big data solutions across sectors such as fintech, payments and credit services, e-commerce, education, and tourism. The Company operates in 10 countries with regional hubs in Shanghai, Singapore and California, and subsidiaries in Japan and the UAE. For more information visit: https://ir.clpsglobal.com/. Follow CLPS on Facebook, Instagram, LinkedIn, X (formerly Twitter) and YouTube.

Forward-Looking Statements

Certain statements in this release are “forward-looking statements” that involve risks and uncertainties that could cause actual results to differ materially. These statements are qualified by cautionary language and the risk factors in the Company’s SEC filings. CLPS does not undertake to update forward-looking statements after the date hereof.

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures (e.g., non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP earnings (losses) per share) which exclude share-based compensation and impairment of goodwill. These measures are supplemental and should not be considered substitutes for GAAP results. Reconciliations to GAAP measures are included in the Company’s financial disclosures.

Contact

CLPS Incorporation
Rhon Galicha
Investor Relations Office
Phone: +86-182-2192-5378
Email: [email protected]

SOURCE CLPS