LOS ANGELES – Ispire Technology Inc., an innovator in vaping technology and precision dosing, reported results for the fiscal year 2024, which ended on June 30, 2024, and filed its annual report on Form 10-K with the U.S. Securities
and Exchange Commission.
Fiscal Year 2024 Financial Results
- Revenue increased 31.4% to $151.9 million as compared to $115.6 million in the 2023 fiscal year.
- Gross profit increased 43.3% to $29.8 million compared to $20.8 million in the 2023 fiscal year.
- Gross margin increased to 19.6% as compared to 18.0% in the 2023 fiscal year;
- Total operating expenses increased 73.0% to $43.7 million as compared to $25.3 million in the 2023 fiscal year.
- Net loss of ($14.8) million as compared to net loss of ($6.0) million in the 2023 fiscal year.
Michael Wang, Co-Chief Executive Officer of Ispire, commented, “Fiscal year 2024 was a foundational year for Ispire, marked by record revenue and substantial margin expansion while strategically positioning us for faster growth in our global nicotine business and intentionally
focusing our cannabis vaping hardware on high quality multi-state operator (MSO) customers. We continued to increase our revenue as we forged strategic long term partnerships with industry leaders such as Acreage Holdings, Hidden Hills Club, Dank Pack, and BRKFST, a brand produced and sold under
a license arrangement with international singer and songwriter Burna Boy. These collaborations helped to expand our market presence, increase distribution channels, and solidify our global operating infrastructure.
“We enhanced our manufacturing capabilities with the opening of a state-of-the-art 31,000 sq. ft. facility in Malaysia earlier this year as we aim to capitalize on the international nicotine market while
driving our costs down and increasing profitability. We expect to continue to realize incremental margin improvements with this facility as production throughput increases. We successfully closed on a $12.3 million public offering this past spring which helped strengthen our financial standing and has positioned us to expand on future international growth opportunities in both
the nicotine and cannabis sectors.
“Additionally, we bolstered our senior leadership team with key appointments: Jim McCormick as Chief Financial Officer, John Patterson as Senior Vice President of International Nicotine, and Dennis Lider
as Senior Vice President of Cannabis Vaping Hardware Sales.
“While we are excited by our results, we are even more optimistic about our path forward. We continue to work towards an industry-leading point-of-use age-verification solution for vapor devices as well
as continue to introduce cutting-edge technology across the U.S. e-cigarette market. We recently submitted our first PMTA application in four years for a disposable ENDS product with four flavors. This is an important milestone for the Company, as we aim to re-enter the U.S. ENDS market.
While we maintain our focus on innovation to drive topline growth, we are equally committed to achieving sustainable margin improvements. At the same time, we are taking steps to limit underage access to vaping products in line with the Company’s values which
focus on responsible marketing to adult consumers.
“We believe these initiatives have collectively positioned us to capitalize on future market opportunities while delivering long-term value to our stakeholders.”
Jim McCormick, Chief Financial Officer of Ispire, stated, “Our fiscal year 2024 results reflect our ability to successfully execute across our business segments, with a strategic focus on the international nicotine market as our primary
revenue, margin, and future profit driver given its significant market size.
We recognize we have taken calculated risks with our cannabis investments in the US over the course of 2024. We have expanded our customer base as well as sales to existing customers while improving our gross margins as the year progressed.
While we have made significant gains in market share, we also experienced challenges with slow-paying customers related to the systemic cash demands placed on the US cannabis industry.
Much of this can be linked to the cannabis specific 280E requirements, perpetuated by the lack of cannabis rescheduling from a Schedule I to a Schedule III controlled substance. In addition, ongoing industry conditions as well as the current
regulatory and taxation environment are placing pressure on our customer’s cash flow and ability to pay us in a timely manner.
Despite these challenges, we remain very confident in our growth trajectory. Our strategic realignment positions the Company to drive growth initiatives in both the nicotine and cannabis sectors, with a renewed focus on quality investments.
Furthermore, we are continuing to drive costs down as we expand our utilization of our Malaysian production facility. This facility significantly bolsters our manufacturing capabilities, while providing operational efficiency and reducing our product costs.”
Financial Results for the Fiscal Year Ended June 30, 2024
For the fiscal year ended June 30, 2024, Ispire reported revenue of $151.9 million compared to $115.6 million during the same period last year, an increase of 31.4%. The increase in revenue was primarily attributable to the combined effect
of increases in product sales in the United States of $21.5 million from $41.6 million for the year ended June 30, 2023 to $63.1 million for the year ended June 30, 2024, increases in sales of vaping products in Europe of $6.5 million from $58.8 million for
the year ended June 30, 2023 to $65.3 million for the year ended June 30, 2024, and increases in sales of vaping products in other markets of $5.7 million from $0.3 million for the year ended June 30, 2023 to $6.0 million for the year ended June 30, 2024,
mainly contributed by increase in sales to South Africa of $5.4 million.
Gross profit for the fiscal year ended June 30, 2024, was $29.8 million compared to $20.8 million for the same period in fiscal year 2023. Over this same period, our gross margin grew to 19.6%, from 18.0%. The increase in gross profit and
gross margin during the fiscal year 2024 was primarily due to a change in product mix focusing on higher margin products, higher sales volume leading to improved economies of scale, and the benefits derived from production in the Company’s Malaysia facility.
Total operating expenses for the fiscal year ended June 30, 2024 were $43.7 million as compared to $25.3 million in the same period in fiscal year 2023. This increase was primarily due to expenses to support the expanded business footprint
in the areas of payroll and contract wages, sales and marketing, professional fees as well as increased stock-based compensation.
For the fiscal year ended June 30, 2024, net loss was ($14.8) million or ($0.27) per share, compared to a net loss of ($6.0) million, or ($0.12) per share for fiscal year 2023.
As of June 30, 2024, Ispire had $35.1 million in cash and cash equivalents and working capital of $16.6 million.
About Ispire Technology Inc.
Ispire is engaged in the research and development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products. The Company’s operating subsidiaries own or license more than 200 patents received or
filed globally. Ispire’s tobacco products are marketed under the Aspire brand name and are sold worldwide (except in the U.S., People’s Republic of China and Russia) primarily through its global distribution network. The Company’s cannabis products are marketed
under the Ispire brand name primarily on an original design manufacturer basis to other cannabis vapor companies. Ispire sells its cannabis vaping hardware in the US, Canada, Germany and South Africa.
