NEW YORK and TOKYO, Aug. 14, 2023 (GLOBE NEWSWIRE) -- HeartCore Enterprises, Inc. ( HTCR) (“HeartCore” or “the Company”), a leading software development company offering Customer Experience Management Platform (“CXM Platform”) and Digital Transformation (“DX”), reported financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 and Recent Operational Highlights
- Partnered with INTRIX, Inc. to license HeartCore’s Content Management System (CMS).
- Executed a deal with Honda Trading Corporation for HeartCore’s task mining software solution, CONTROLIO, a web-based cloud system for employee monitoring and productivity enhancement.
- Presented virtually and held one-on-one meetings at the Sidoti & Co.’s June Virtual Small-Cap Conference.
- Hosted a U.S. Exchange Listing seminar in Tokyo, Japan on June 9, 2023 to a myriad of Japanese companies on the realities of going public on U.S. Exchanges in addition to an overview of its very successful Go IPO consulting service.
- Partnered with Toppan Inc. to strengthen and expand Toppan’s digital marketing business utilizing HeartCore’s Contents Management System, in addition to both companies collaborating on joint business ventures.
- Signed tenth Go IPO consulting service agreement with rYojbaba Inc.
- Second quarter revenue grew 91% compared to same period 2022.
- Year-to-Date revenue grew 180% compared to same period 2022.
- Q2 2023 EPS loss of $0.04 was primarily due to lower consulting services revenue as none of HeartCore’s clients’ pending IPOs were completed in the second quarter.
- YTD 2023 Company remained profitable and expects significant growth in second half 2022.
Management Commentary
“This past quarter reflected a period of growth from our enterprise software division, in addition to a time of important back-end movement within our Go IPO segment as our two-pronged growth strategy continues to manifest into full effect,” said CEO Sumitaka Yamamoto. “As evidenced by growth of 102% and successfully hitting profitability within our enterprise software vertical, we continue to garner new customers and capitalize on synergistic opportunities with Sigmaways. Though we didn’t have any Go IPO clients go public in Q2, we have a significant amount of progress being made behind the scenes and expect to see a robust second half of the year and beyond. I am very encouraged by the results we’ve generated year to date and expect an even stronger end to the calendar year.”
Second Quarter 2023 Financial Results
Revenues increased 91% to $5.1 million compared to $2.7 million in the same period last year. The increase was primarily due to increased revenue from customized software development and services as a result of Sigmaway and its subsidiaries, and an increase from GO IPO consulting services as the Company obtained more IPO Consulting customers in 2023.
Gross profit increased 13% to $1.5 million (gross margin of 30%) from $1.3 million (gross margin of 50%) in the same period last year. The increase was primarily from increased maintenance and support services and customized software development and services, offset by decrease in sales of on-premise software.
Operating expenses remained consistent at $3.0 million from the same period last year. The increase in general and administrative expenses was offset by decreases in selling and research and development expenses.
Net loss was $1.0 million or $(0.04) per diluted share, compared to a net loss of $1.7 million or $(0.09) per diluted share, in the same period last year.
As of June 30, 2023, the Company had cash and cash equivalents of $4.2 million compared to $7.2 million in December 31, 2022.
Six Months 2023 Financial Results
Revenues increased 180% to $13.8 million compared to $4.9 million in the same period last year. The increase was primarily due to increased revenue from customized software development and services as a result of Sigmaways and its subsidiaries, and an increase from GO IPO consulting services as the Company obtained more IPO Consulting customers in 2023 and received warrants from its customers.
Gross profit increased 180% to $7.1 million (gross margin of 52%) from $2.6 million (gross margin of 52%) in the same period last year. The increase was primarily due to an increase from GO IPO consulting services and customized software development and services.
Operating expenses increased to $6.3 million from $5.8 million in the same period last year. The increase was primarily due to increases in selling and general and administrative expenses, offset by a decrease in research and development expenses.
Net income was about $785,000 or $0.05 per diluted share compared to a net loss of $3.3 million or $(0.18) per diluted share, in the same period last year.
About HeartCore Enterprises, Inc.
Headquartered in Tokyo, Japan, HeartCore Enterprises is a leading software development company offering Software as a Service (SaaS) solutions to enterprise customers in Japan and worldwide. The Company also provides data analytics services that allow enterprise businesses to create tailored web experiences for their clients through best-in-class design. HeartCore’s customer experience management platform (CXM Platform) includes marketing, sales, service and content management systems, as well as other tools and integrations, which enable companies to enhance the customer experience and drive engagement. HeartCore also operates a digital transformation business that provides customers with robotics process automation, process mining and task mining to accelerate the digital transformation of enterprises. Furthermore, HeartCore offers “Go IPO,” a consulting service where it assists private companies with uplisting onto the Nasdaq Stock Market. Additional information about the Company's products and services is available at and https://heartcore-enterprises.com/.
Forward-Looking Statements
All statements other than statements of historical facts included in this press release are forward- looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks, and uncertainties are discussed in HeartCore’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond HeartCore’s control which could, and likely will materially affect actual results, and levels of activity, performance, or achievements. Any forward-looking statement reflects HeartCore’s current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to operations, results of operations, growth strategy, and liquidity. HeartCore assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The contents of any website referenced in this press release are not incorporated by reference herein.
HeartCore Investor Relations Contact:
Gateway Group, Inc.
Matt Glover and John Yi
[email protected]
(949) 574-3860
| HeartCore Enterprises, Inc. | |||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||||||
| For the six months ended June 30, | For the three months ended June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenues | $ | 13,829,523 | $ | 4,946,298 | $ | 5,095,373 | $ | 2,670,297 | |||||||
| Cost of revenues | 6,688,004 | 2,392,652 | 3,586,938 | 1,337,296 | |||||||||||
| Gross profit | 7,141,519 | 2,553,646 | 1,508,435 | 1,333,001 | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling expenses | 1,056,704 | 934,754 | 488,062 | 728,836 | |||||||||||
| General and administrative expenses | 5,133,094 | 4,319,248 | 2,447,887 | 1,850,315 | |||||||||||
| Research and development expenses | 119,232 | 525,487 | 39,608 | 417,228 | |||||||||||
| Total operating expenses | 6,309,030 | 5,779,489 | 2,975,557 | 2,996,379 | |||||||||||
| Income (loss) from operations | 832,489 | (3,225,843 | ) | (1,467,122 | ) | (1,663,378 | ) | ||||||||
| Other income (expenses): | |||||||||||||||
| Changes in fair value of investments in marketable securities | (229,022 | ) | - | (229,022 | ) | - | |||||||||
| Changes in fair value of investments in warrants | 166,107 | - | (27,258 | ) | - | ||||||||||
| Interest income | 50,270 | 10,549 | 18,665 | 9,091 | |||||||||||
| Interest expenses | (82,454 | ) | (28,861 | ) | (42,614 | ) | (17,590 | ) | |||||||
| Other income | 124,001 | 25,450 | 109,800 | 8,777 | |||||||||||
| Other expenses | (36,754 | ) | (55,224 | ) | (7,297 | ) | (31,562 | ) | |||||||
| Total other expenses | (7,852 | ) | (48,086 | ) | (177,726 | ) | (31,284 | ) | |||||||
| Income (loss) before income tax provision | 824,637 | (3,273,929 | ) | (1,644,848 | ) | (1,694,662 | ) | ||||||||
| Income tax expense (benefit) | 39,446 | 8,163 | (622,002 | ) | 8,979 | ||||||||||
| Net income (loss) | 785,191 | (3,282,092 | ) | (1,022,846 | ) | (1,703,641 | ) | ||||||||
| Less: net loss attributable to non-controlling interest | (185,298 | ) | - | (111,046 | ) | - | |||||||||
| Net income (loss) attributable to HeartCore Enterprises, Inc. | $ | 970,489 | $ | (3,282,092 | ) | $ | (911,800 | ) | $ | (1,703,641 | ) | ||||
| Other comprehensive income: | |||||||||||||||
| Foreign currency translation adjustment | 5,499 | 299,413 | 30,533 | 219,360 | |||||||||||
| Total comprehensive income (loss) | 790,690 | (2,982,679 | ) | (992,313 | ) | (1,484,281 | ) | ||||||||
| Less: comprehensive loss attributable to non-controlling interest | (187,258 | ) | - | (110,716 | ) | - | |||||||||
| Comprehensive income (loss) attributable to HeartCore Enterprises, Inc. | $ | 977,948 | $ | (2,982,679 | ) | $ | (881,597 | ) | $ | (1,484,281 | ) | ||||
| Net income (loss) per common share attributable to HeartCore Enterprises, Inc. | |||||||||||||||
| Basic | $ | 0.05 | $ | (0.18 | ) | $ | (0.04 | ) | $ | (0.09 | ) | ||||
| Diluted | $ | 0.05 | $ | (0.18 | ) | $ | (0.04 | ) | $ | (0.09 | ) | ||||
| Weighted average common shares outstanding | |||||||||||||||
| Basic | 19,959,333 | 18,105,698 | 20,842,690 | 18,936,829 | |||||||||||
| Diluted | 19,959,333 | 18,105,698 | 20,842,690 | 18,936,829 | |||||||||||
| HeartCore Enterprises, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| June 30, | December 31, | |||||
| 2023 | 2022 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 4,238,741 | $ | 7,177,326 | ||
| Accounts receivable | 2,812,337 | 551,064 | ||||
| Investments in marketable securities | 1,028,846 | - | ||||
| Prepaid expenses | 878,539 | 538,230 | ||||
| Note receivable | 300,000 | - | ||||
| Due from related party | 43,782 | 48,447 | ||||
| Other current assets | 79,339 | 220,070 | ||||
