HONG KONG, Oct. 17, 2025 /PRNewswire/ -- 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 this fiscal year, we faced a significant challenge when our long-standing and historically largest client announced a broad downsizing of its technology employee workforce within its China Solution Centers (CSCs) in Dalian and Shanghai, as part of its global restructuring strategy. As a result, this unprecedented strategic realignment required the dissolution of most of our dedicated IT staff serving the client. This action, while necessary, resulted in a significant increase in one-time employee severance expenses. Consequently, this non-recurring expense created unavoidable short-term pressure on our current period's net income. After excluding all of the layoff compensation, our adjusted net income for the fiscal year 2025 was $78.0 thousand.

We are transforming this challenge into an opportunity to advance our strategic objectives. While sustaining organic growth, we are accelerating our strategic shift toward building a more resilient revenue framework. This involves pioneering new, high-value project work in artificial intelligence (AI) and Robotic Process Automation (RPA) while intensifying our efforts to expand our international market presence. We are confident that the positive impact of these transformative steps will materialize and become evident in our financial performance in subsequent reporting periods. CLPS will continue to focus on long-term value creation through diversification, technology innovation, and international growth.

Unaudited Second Half of Fiscal 2025 Highlights (all results compared to the six months ended June 30, 2024)

   -- Revenue increased by 15.0% to $81.7 million from $71.0 million. 
 
   -- Revenue from IT consulting services increased by 16.9% to $78.7 million 
      from $67.3 million. 
 
   -- Revenue generated outside of mainland China increased by 77.1% to $23.5 
      million from $13.3 million. In particular: 

- Revenue generated from Singapore increased by 96.1% to $12.4 million from $6.3 million.

- Revenue generated from Hong Kong SAR increased by 99.9% to $8.0 million from $4.0 million.

- Revenue generated from Japan increased by 174.6% to $1.1 million from $0.4 million.

Audited Fiscal Year 2025 Highlights (all results compared to the twelve months ended June 30, 2024)

   -- Revenue increased by 15.2% to $164.5 million from $142.8 million. 
 
   -- Revenue from IT consulting services increased by 16.0% to $158.8 million 
      from $136.8 million. 
 
   -- Revenue generated outside of mainland China increased by 90.5% to $42.5 
      million from $22.3 million. In particular: 

- Revenue generated from Singapore increased by 99.2% to $21.9 million from $11.0 million.

- Revenue generated from Hong Kong SAR increased by 130.5% to $14.4 million from $6.2 million.

- Revenue generated from Japan increased by 253.2% to $2.0 million from $0.6 million.

   -- Gross profit increased by 10.2% to $36.3 million from $32.9 million. 
 
   -- Accounts receivable turnover period improved to 92 days, down from 111 
      days. 
 
   -- Total number of clients from IT services segment increased by 6.3% to 319 
      from 300. 
 
   -- Total number of employees increased by 6.3% to 3,534 from 3,325. 

Mr. Raymond Lin, Chief Executive Officer of CLPS, commented, "The past 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, evidenced by the strategic push for global expansion which yielded substantial results. Overseas revenue grew 90.5% to $42.5 million, with the APAC region being a primary driver of this growth. The successful establishment of operations in key regional markets, including Indonesia and Canada, which has begun generating revenue, alongside our presence in Dubai, underscores a strategic pivot towards high-growth international territories. Our expanding global footprint not only contributed to this growth but also positions the Company for a more globally improved revenue stream in the future, mitigating regional economic fluctuations.

Navigating the operational and financial impact of the major client's global restructuring strategy was one of the central challenges of this fiscal year. It required a careful realignment of resources while simultaneously supporting growth from other existing and new clients. In parallel, we made pivotal investments in our future by advancing our proprietary RPA product Nibot, and AI solutions. These technological developments, which moved into real-world applications, represent a critical long-term asset. As we celebrate our 20th anniversary, these investments underscore a commitment to evolving our service offerings beyond our IT consulting services towards higher-value, IP-driven solutions."

Ms. Rui Yang, Chief Financial Officer of CLPS, commented, "The fiscal 2025 financial performance reflects a dual reality: achieving robust top-line growth while actively navigating the impact of unforeseen, non-recurring challenges.

Our operations outside Mainland China strongly validated our global expansion strategy, demonstrating impressive growth momentum. Specifically, during this fiscal year, our key international markets in APAC--Singapore, Hong Kong SAR, and Japan--recorded substantial year-over-year growth rates of 99.2%, 130.5%, and 253.2%, respectively. Furthermore, our focus on working capital management yielded positive results, with accounts receivable turnover days improving from 111 days in the previous fiscal year to 92 days.

However, the unexpected restructuring of CSCs in Dalian and Shanghai by our significant client resulted in material one-time severance expenses due to corresponding workforce reduction. This placed inevitable short-term pressure on our net income.

Moving forward, we are proactively addressing this challenge by accelerating the diversification of our revenue streams. For instance, with the market launch of Nibot, and further advancements in AI, we anticipate increased revenue generation from customized IT solutions segment, which will substantially reduce our reliance on any single client. Moreover, CLPS's diversified presence across sectors such as education and tourism, and continuous acquisition of new clients, will further mitigate this risk. We remain deeply committed to maintaining stringent financial discipline while simultaneously supporting initiatives that enhance CLPS's long-term competitive advantage and shareholder value."

Unaudited Second Half of Fiscal Year 2025 Financial Results

Revenues

In the second half of fiscal 2025, revenues increased by $10.7 million, or 15.0%, to $81.7 million from $71.0 million in the prior year period. The increase in revenue was mainly due to the increased demand in IT consulting services.

Revenues by Service

   -- Revenue from IT consulting services increased by $11.4 million, or 16.9%, 
      to $78.7 million in the second half of fiscal 2025, from $67.3 million in 
      the prior year period. Revenue from IT consulting services accounted for 
      96.3% of total revenue, compared to 94.8% in the prior year period. The 
      increase was due to the increased demand from existing and new clients. 
 
   -- Revenue from customized IT solution services decreased by $0.1 million, 
      or 4.7%, to $1.8 million in the second half of fiscal 2025, from $1.9 
      million in the prior year period. Revenue from customized IT solution 
      services accounted for 2.2% of total revenue, compared to 2.7% in the 
      prior year period. The decrease was primarily due to the decreased demand 
      from existing clients. In response, we are actively pursuing new client 
      acquisition and identifying emerging market needs, with an expectation 
      for this segment to resume growth in the next fiscal year. 
 
   -- Revenue from academic education services decreased by $0.08 million, or 
      7.8%, to $0.96 million in the second half of fiscal 2025, from $1.04 
      million in the prior year period. Revenue from academic education 
      services accounted for 1.2% of total revenue, compared to 1.5% in the 
      prior year period. The decrease was primarily attributable to resource 
      integration following the acquisition of the College of Allied Educators 
      $(CAE)$. Looking ahead, we are focused on generating new momentum by 
      launching innovative courses for CAE to boost enrollment and drive 
      segment revenue growth. 
 
   -- Revenue from other services decreased by $0.5 million, or 71.1%, to $0.2 
      million in the second half of fiscal 2025, from $0.7 million in the prior 
      year period. Revenue from other services accounted for 0.3% of total 
      revenue, compared to 1.0% in the prior year period. The decrease was 
      primarily due to the decreased demand for other services, including head 
      hunting service. 

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October 17, 2025 09:24 ET (13:24 GMT)