Earning Date, Transcript Summary & Report

Positive Point: CLPS Incorporation demonstrated continuous revenue growth in the first half of fiscal year 2023 despite challenges, with an increase of $0.9 million or 1.1% to $76.8 million from $75.9 million.

• This growth was driven by an increase in revenue from IT consulting services, showcasing the company's improved service delivery capability and increased demand from existing and new clients.

Positive Point: The company focused on key operational areas in banking, wealth management, e-commerce, and automotive, achieving breakthrough growth in overseas markets.

• Revenue from the wealth management area increased by approximately 24% to $19 million, with a 35% year-over-year increase in RMB terms.
• Revenue from the e-commerce area increased by approximately 3% year-over-year in RMB terms.
• Revenue from the automotive area increased by approximately 30% to $7 million, with a 41% year-over-year increase in RMB terms.

Positive Point: CLPS implemented a global expansion strategy with a focus on the U.S. and Japan markets, resulting in significant revenue growth.

• Revenue in the U.S. market increased by 72%, showing positive momentum under strong leadership.
• Revenue in Japan increased by 156%, showcasing successful market expansion and partnership with key stakeholders.

Positive Point: The company made significant achievements in product development, with the launch of scenario-based digital currency application solutions and the improvement of key products like CAKU 2.0 and the new generation of loan systems.

• These products aim to streamline workflow, reduce processing time, and provide a more comprehensive and efficient loan process flow for clients.

Positive Point: CLPS focused on talent development, forming partnerships with educational institutions like Australian National University and the University of Hong Kong to provide high-skilled IT professionals to clients and foster sustainable development in the IT and banking industries.

Negative:

• Revenue increased only by 1.1% to $76.8 million, indicating minimal growth despite challenges in the market.
• Gross profit decreased from $22.3 million to $18.5 million, showcasing a decline in profitability.
• Operating income dropped significantly from $7.6 million to $1.3 million, reflecting lower operational efficiency.
• Net income decreased from $6.5 million to $1.4 million, showing a substantial decline in overall profitability.
• General and administrative expenses rose by 16.6% to $10.7 million, impacting the company's bottom line negatively.