#CLPS Incorporation #Hong Kong #financial results #Fiscal 2025

CLPS Incorporation Reveals Financial Performance for Fiscal 2025

On October 17, 2025, CLPS Incorporation (NASDAQ: CLPS) disclosed its financial performance for the second half and full fiscal year 2025. The report depicted a narrative of resilience, highlighting both challenges and growth opportunities.

Operational Challenges and Strategic Adjustments

The fiscal year presented a formidable challenge as CLPS's largest client initiated a substantial downsizing of its technology workforce in China. This strategic decision compelled CLPS to dissolve most of its dedicated IT staff assigned to this client. Although necessary, this move inflicted significant one-time severance expenses, impacting the company's short-term net income.

Despite these challenges, CLPS is turning adversity into opportunity. The company has refocused its strategic objectives to foster organic growth and build a more resilient revenue model. This involves embarking on new high-value projects in artificial intelligence (AI) and Robotic Process Automation (RPA) while aiming to strengthen its global market footprint.

Financial Highlights

Second Half of Fiscal 2025

• - Revenue Growth: Revenues increased by 15.0% to $81.7 million, up from $71.0 million.
• - IT Consulting Services: Revenue from IT consulting services surged by 16.9% to $78.7 million.
• - Global Operations Performance: Revenue from outside mainland China experienced a remarkable increase of 77.1%, totaling $23.5 million. Significant developments included a 96.1% rise in Singapore's revenue, reaching $12.4 million.

Full Year Fiscal 2025

• - Total Revenue: Overall revenue climbed 15.2% to $164.5 million compared to $142.8 million in the prior year.
• - IT Consulting Services Revenue: This segment alone accounted for $158.8 million, an increase of 16.0%.
• - International Revenue Surge: Revenues from international markets rose 90.5% to $42.5 million, showcasing a strong global presence with enormous growth potential, especially in the APAC region.

Strategic Focus for the Future

CEO Raymond Lin emphasized the importance of diversifying client portfolios in response to the year’s challenges. The international push, highlighted by revenue growth in Singapore, Hong Kong SAR, and Japan, reduces client concentration risks and establishes a more globally resilient revenue stream amid fluctuating regional economies.

Investments in technology, particularly regarding proprietary products like the AI-based Nibot, are crucial for CLPS's evolving service offerings, moving beyond conventional consulting to higher-value, intellectual property-driven solutions.

CFO Rui Yang echoed these sentiments, revealing robust performance amid navigating fiscal uncertainties, especially with the unexpected restructuring actions. The adjustment in working capital management yielded promising results, with accounts receivable turnover improving from 111 days to 92 days.

Looking Ahead

CLPS remains undeterred by recent struggles, forecasting a sales growth of approximately 10% to 15% for fiscal year 2026 based on current market conditions. Guidance estimates non-GAAP net income between $4.4 million and $5.0 million for the coming fiscal year. This forward outlook reflects CLPS's commitment to navigating challenges strategically while enhancing shareholder value.

In conclusion, CLPS Incorporation embodies a narrative of growth against adversity, leveraging challenges as catalysts for transformation. With a dedicated focus on expanding global operations and innovation in technology, CLPS is well-positioned for long-term success and resilience in the evolving global market landscape.