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Dec 31, 2024
Aeries Q3 2025 Earnings Report
Aeries Technology, Inc. reported a decrease in revenue and gross profit, alongside a net income, for the three months ended December 31, 2024.
Key Takeaways
Aeries Technology, Inc. reported a net income of $2,048,000 for the three months ended December 31, 2024, a significant improvement from a net loss in the prior year. However, revenue decreased by 7% to $17,607,000, and gross profit saw a substantial 33% decline. The company's financial condition is impacted by a working capital deficit and obligations under forward purchase agreements, raising substantial doubt about its ability to continue as a going concern.
Net income for the three months ended December 31, 2024, was $2,048,000, a significant improvement from a net loss of $16,301,000 in the same period last year.
Revenue decreased by 7% to $17,607,000 for the three months ended December 31, 2024, compared to $18,897,000 in the prior year.
Gross profit declined by 33% to $4,042,000, with the gross profit margin decreasing by 900 basis points to 23%.
The company reported a working capital deficit of $10,419,000 as of December 31, 2024, and faces an obligation to settle $7,500,000 in forward purchase agreement liabilities.
Aeries
Aeries
Aeries Revenue by Geographic Location
Revenue by Geographic Location
North America Revenue
CapyFin.comAsia-Pacific and Other Revenue
CapyFin.com Forward Guidance
The Company's ability to continue as a going concern is dependent on successfully executing its mitigation plan, which includes raising additional funds, restructuring liabilities, and further reducing non-core expenses. Management is hopeful but there is no guarantee of success.
Positive Outlook
- The non-renewal of a customer contract includes a one-time buyout payment of approximately $3,100,000.
- The Company has executed a Master Service Agreement to provide technology-enabled services to the customer under a new engagement model.
- The Company settled $625,000 of maturity consideration liability with Meteora Capital Partners LP through the issuance of additional shares.
- Targeted cost-cutting measures have been instituted, focusing on non-core expenses and selective headcount/salary reductions.
- Management expects to have sufficient cash from operations, cash reserves, and debt capacity for the next 12 months, assuming FPA liabilities do not require immediate cash settlement.
Challenges Ahead
- The Company reported a net loss of $15,575,000 for the nine months ended December 31, 2024.
- The Company had a working capital deficit of $10,419,000 as of December 31, 2024, primarily due to current liabilities related to forward purchase agreements.
- The Company is obligated to pay a maturity consideration of $8,000,000 under the FPAs, with a remaining balance of $7,500,000 owed to FPA holders.
- A non-renewal notice from a significant customer is expected to result in an annual revenue loss of approximately $11,900,000.
- If an immediate cash settlement is required for the remaining FPA liabilities, the Company may lack the necessary financial resources to sustain operations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income