HUHUTECH International Group Inc. Announces First Half of Fiscal Year 2025 Financial Results

Rhea-AI Summary

HUHUTECH (NASDAQ:HUHU) reported mixed financial results for H1 FY2025. Total revenue increased 10.9% to $9.8 million, driven by significant expansion in the Japanese market, which contributed 60.9% of total revenue with 155 completed projects. However, the company swung to a net loss of $8.7 million, compared to net income of $0.8 million in the prior year period.

The company's gross margin declined to 32.0% from 35.6%, while operating expenses surged 511.5% to $11.8 million, primarily due to an $8.8 million increase in share-based compensation. HUHUTECH has expanded globally by establishing a U.S. subsidiary and acquiring a German operation to penetrate key semiconductor markets. The company ended the period with $3.0 million in cash.

Positive

• Revenue grew 10.9% year-over-year to $9.8 million
• Japanese operations expanded significantly with 155 projects, contributing 60.9% of total revenue
• Strategic expansion into U.S. and German semiconductor markets through new subsidiary establishment and acquisition
• Product sales revenue increased 1,029.8% to $0.4 million

Negative

• Swung to net loss of $8.7 million from $0.8 million profit last year
• Operating expenses surged 511.5% to $11.8 million due to increased share-based compensation
• Gross margin declined to 32.0% from 35.6% year-over-year
• Cash position decreased to $3.0 million from $3.1 million at end of 2024
• Net cash used in operating activities was $0.5 million versus $0.3 million provided last year

Insights

Financial Analyst

HUHUTECH reports revenue growth but significant net loss due to large increase in share-based compensation expenses.

HUHUTECH's H1 FY2025 results paint a mixed picture with revenue growth counterbalanced by profitability challenges. The company reported a 10.9% increase in total revenue to $9.8 million, primarily driven by expansion in the Japanese market, which now contributes 60.9% of total revenue. This geographic diversification strategy appears to be gaining traction, with their Japanese subsidiary completing 155 projects compared to 54 in the same period last year.

However, beneath the topline growth lies concerning profitability metrics. The company swung from a net income of $0.8 million to a substantial net loss of $8.7 million. This dramatic shift is largely attributable to an $8.8 million increase in share-based compensation, which drove a 1,035.3% surge in general and administrative expenses to $10.3 million. While management frames this as a "long-term investment" in talent retention, the magnitude of this expense relative to revenue (89.8%) raises questions about capital allocation efficiency.

Gross margin deterioration from 35.6% to 32.0% signals potential pricing pressure or higher project costs. This margin compression, coupled with a 17.1% increase in cost of revenue, suggests challenges in maintaining operational efficiency amid expansion. The cash position remains relatively stable at $3.0 million, but the company has shifted from generating $0.3 million in operating cash flow to consuming $0.5 million, highlighting deteriorating cash conversion.

HUHUTECH's expansion into US and German markets aligns with their global growth strategy and positions them in key semiconductor manufacturing regions. However, investors should monitor whether this geographic expansion delivers profitable growth or merely adds to the cost structure without proportionate returns.

WUXI, China, Sept. 19, 2025 /PRNewswire/ -- HUHUTECH International Group Inc. (Nasdaq: HUHU) (the "Company" or "HUHUTECH"), a professional provider of factory facility management and monitoring systems, today announced its unaudited financial results for the first half of fiscal year 2025 ended June 30, 2025.

Mr. Yujun Xiao, Chief Executive Officer of HUHUTECH, commented, "We are pleased to report a 10.9% increase in total revenue for the first half of fiscal year 2025, reaching $9.8 million. This growth is primarily driven by our strategic expansion into the Japanese market, where we have significantly increased our client base and project volume. Our Japanese subsidiary has completed 155 projects and contributed 60.9% of our total revenue in the first half of fiscal year 2025, a significant increase from 54 projects and 47.6% of total revenue in the same period last year. Excluding the impact of increased share-based compensation, our underlying business performance remained stable, and we are confident that our equity incentive plan is a long-term investment in our people that will enhance our ability to attract and retain talent, aligning our team's commitment with the interests of our shareholders."

Mr. Xiao continued, "In line with our global growth strategy, we have established a subsidiary in the United States and acquired our German subsidiary, extending our reach into two of the world's most dynamic semiconductor markets. By providing comprehensive and localized system integration solutions, we are well positioned to empower the development of infrastructure for local semiconductor manufacturing clusters. Looking ahead, we will continue to invest in our international operations and expand our capabilities to serve an increasingly global customer base. We remain confident in our strategic direction and are committed to delivering growing long-term value to our shareholders."

First Half of Fiscal Year 2025 Financial Summary

• Total revenue was $9.8 million for the first half of fiscal year 2025, an increase of 10.9% from $8.9 million for the same period of last year.
• Gross profit was $3.1 million for the first half of fiscal year 2025, compared to $3.2 million for the same period of last year.
• Gross margin was 32.0% for the first half of fiscal year 2025, compared to 35.6% for the same period of last year.
• Net loss was $8.7 million for the first half of fiscal year 2025, compared to net income of $0.8 million for the same period of last year.
• Basic and diluted loss per share were $0.38 for the first half of fiscal year 2025, compared to basic and diluted earnings per share of $0.04 for the same period of last year.

First Half of Fiscal Year 2025 Financial Results

Revenues

Total revenue was $9.8 million for the first half of fiscal year 2025, an increase of 10.9% from $8.9 million for the same period of last year. The overall increase in total revenue was primarily attributable to a $0.7 million increase in revenue from system integration projects and a $0.4 million increase in revenue from product sales.

• Revenue from system integration projects was $9.4 million for the first half of fiscal year 2025, an increase of 8.5% from $8.7 million for the same period of last year. The increase was due to the expansion of the Company's business in the Japanese market for the first half of fiscal year 2025.  
• The Company did not generate revenue from engineering consulting services for the first half of fiscal year 2025. Revenue from engineering consulting services was $0.2 million for the same period of last year. The decrease was mainly due to a shift of focus on system integration projects for first half of fiscal year 2025.
• Revenue from product sales was $0.4 million for the first half of fiscal year 2025, an increase of 1,029.8% from $0.04 million for the same period of last year. The increase of product sales revenue was due to increase in product needs along with system integration projects for the first half of fiscal year 2025.

Cost of Revenues

Cost of revenue was $6.7 million for the first half of fiscal year 2025, an increase of 17.1% from $5.7 million for the same period of last year.

Gross Profit and Gross Margin

Gross profit was $3.1 million for the first half of fiscal year 2025, a decrease of 0.4% from $3.2 million for the same period of last year. Gross profit for system integration projects was $3.1 million for the first half of fiscal year 2025, an increase of 2.7% from $3.0 million for the same period of last year. Gross profit for product sales was $39,864 for the first half of fiscal year 2025, an increase of 296.7% from $10,049 for the same period of last year.

Gross margin was 32.0% for the first half of fiscal year 2025, decreased from 35.6% for the same period of last year.

Operating Expenses

Total operating expenses were $11.8 million for the first half of fiscal year 2025, an increase of 511.5% from $1.9 million for the same period of last year.

• Selling expenses were $0.9 million for the first half of fiscal year 2025, an increase of 79.9% from $0.5 million for the same period of last year. The increase was mainly due to the operation increased business promotion expenses of HUHU Technology Co., Ltd. ("HUHU Japan").
• General and administrative expenses were $10.3 million for the first half of fiscal year 2025, an increase of 1,035.3% from $0.9 million for the same period of last year. The significant increase in G&A expenses was contributed by (i) an approximately $8.8 million increase in share-based compensation; (ii) an approximately $0.2 million increase in salary and compensation; (iii) an approximately $0.2 million increase in other items including lease expenses and office expenses.
• R&D expenses stayed at $0.5 million for the first half of fiscal year 2025 and 2024.

Net Income (Loss)

Net loss was $8.7 million for the first half of fiscal year 2025, compared to net income of $0.8 million for the same period of last year.

Basic and Diluted Earnings (Loss) per Share

Basic and diluted loss per share were $0.38 for the first half of fiscal year 2025, compared to basic and diluted earnings per share of $0.04 for the same period of last year.

Financial Condition

As of June 30, 2025, the Company had cash of $3.0 million, compared to $3.1 million as of December 31, 2024.

Net cash used in operating activities for the first half of fiscal year 2025 was $0.5 million, compared to net cash provided by operating activities of $0.3 million for the same period of last year.

Net cash used in investing activities for the first half of fiscal year 2025 was $0.1 million, compared to $1.6 million for the same period of last year.

Net cash used in financing activities for the first half of fiscal year 2025 was $0.04 million, compared to net cash provided by financing activities of $3.0 million for the same period of last year.

About HUHUTECH International Group Inc.

HUHUTECH International Group Inc. is a professional provider of factory facility management and monitoring systems. Through its subsidiaries in China, Japan, the United States, and Germany, HUHUTECH designs and provides customized high-purity gas and chemical production system and equipment. The Company's products mainly include high-purity process systems (HPS) and factory management control systems (FMCS), which effectively increase operation efficiency by using standardized module software. The modularity of HUHUTECH's software solution reduces the errors caused by frequent updates of the program. As a nationally recognized brand, HUHUTECH serves major players in the pan-semiconductor industry. Its products and services are widely used by semi-conductor manufacturers, LED and micro-electronics factories, as well as some pharmaceutical, food and beverage manufacturers. For more information, please visit the Company's website: ir.huhutech.com.cn.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," or other similar expressions in this announcement. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission ("SEC").

For more information, please contact:

HUHUTECH International Group Inc.
Investor Relations Department
Email: ir@huhutech.com.cn

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

 

 

 

HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
		As of  June 30,				As of December 31,
		2025				2024
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	2,978,868			$	3,102,865
Restricted cash			57,151				220,261
Note receivable			6,587				254,092
Accounts receivable, net			11,170,072				9,633,289
Accounts receivable – a related party			950,052				—
Inventories			982,954				1,175,241
Advance to vendors			348,713				150,637
Prepayments and other assets, net			181,046				80,137
TOTAL CURRENT ASSETS			16,675,443				14,616,522
Property, plant and equipment, net			5,016,051				4,978,080
Intangible assets, net			65,793				79,985
Deferred tax assets			526,349				326,087
Right-of-use assets, net			168,375				183,815
TOTAL ASSETS		$	22,452,011			$	20,184,489
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term bank loans		$	2,861,690			$	5,273,678
Long-term bank loan - current			251,270				—
Loan payable from third-party			500,000				—
Notes payable			190,501				733,996
Accounts payable			5,014,033				4,466,933
Due to a related party			506,115				246,454
Advance from customers			2,028,683				1,403,628
Accrued expenses and other liabilities			1,398,421				732,419
Taxes payable			204,332				356,889
Operating lease liabilities – current			119,579				104,088
TOTAL CURRENT LIABILITIES			13,074,624				13,318,085
Long term bank loans			2,421,807				260,299
Operating lease liabilities – non-current			13,867				80,636
TOTAL LIABILITIES			15,510,298				13,659,020
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY:
Ordinary shares, $0.0000025 par value, 20,000,000,000 shares authorized,       23,173,413 and 21,173,413 shares issued and outstanding as of June 30, 2025 and       December 31, 2024, respectively			58				53
Additional paid-in capital			13,495,345				4,695,350
Statutory reserves			343,077				343,077
(Accumulated deficit) retained earnings			(6,704,455)				2,026,786
Accumulated other comprehensive loss			(192,312)				(539,797)
TOTAL SHAREHOLDERS' EQUITY			6,941,713				6,525,469
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	22,452,011			$	20,184,489

 

 

 

HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited)
		For the Six Months Ended  June 30,
		2025				2024
Revenues – third parties		$	9,337,289			$	8,853,479
Revenues – related party			480,183				—
Total Revenues			9,817,472				8,853,479
Cost of revenues – third parties			6,533,648				5,137,460
Cost of revenues – related party			144,628				565,466
Total cost of revenues			6,678,276				5,702,926
Gross profit			3,139,196				3,150,553
Operating expenses:
Selling expenses			899,367				500,032
General and administrative expenses			10,330,446				909,952
Research and development expenses			520,479				511,674
Total operating expenses			11,750,292				1,921,658
(Loss) Income from operations			(8,611,096)				1,228,895
Other income (expense):
Interest income			6,736				1,523
Interest expense			(64,246)				(49,185)
Other expense, net			2,051				(100,698)
Total other expense, net			(55,459)				(148,360)
(Loss) income before income taxes			(8,666,555)				1,080,535
Provision for income taxes			64,686				231,208
Net (loss) income			(8,731,241)				849,327
Comprehensive income (loss)
Foreign currency translation adjustments			347,485				(336,141)
Comprehensive (loss) income		$	(8,383,756)			$	513,186
(Loss) earnings per share
Basic and diluted		$	(0.38)			$	0.04
Weighted average number of shares outstanding
Basic and diluted			23,018,717				20,000,000

 

 

 

HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
		For the Six Months Ended June 30,
		2025				2024
Cash flows from operating activities:
Net (loss) income		$	(8,731,241)			$	849,327
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization			169,951				223,891
Provision for credit losses			30,265				26,263
Deferred tax benefit			(191,703)				(3,939)
Amortization of operating lease right-of-use assets			73,034				55,659
Share-based compensation			8,800,000				—
Changes in operating assets and liabilities:
Accounts receivable			(1,375,962)				(1,365,703)
Accounts receivable - related party			(938,394)				—
Notes receivable			249,223				(3,881)
Inventories			211,917				(277,321)
Prepayments and other assets			(98,286)				(19,867)
Advance to vendors			(195,164)				(687,971)
Advance to vendors – related party			—				(69,300)
Due from related parties			—				(578,513)
Accounts payable			467,452				48,242
Accrued expenses and other liabilities			645,080				159,134
Advance from customers			591,122				1,710,559
Taxes payable			(157,026)				291,930
Operating leases liabilities			(73,671)				(55,428)
Net cash (used in) provided by operating activities			(523,403)				303,082
Cash flows from investing activities:
Additions to property, plant, and equipment			(93,665)				(1,556,739)
Additions to intangible assets			(5,236)				—
Net cash used in investing activities			(98,901)				(1,556,739)
Cash flows from financing activities:
Repayments to related parties			—				(868,438)
Advances from related parties			261,158				—
Loan from third-party			500,000				—
(Repayments of) proceeds from bank acceptance notes payable, net			(550,559)				427,044
Proceeds from short-term bank loans			5,403,440				4,487,582
Repayment of short-term bank loans			(7,995,277)				(1,663,202)
Proceeds from long-term bank loans			2,412,000				693,001
Repayment of long-term bank loans			(74,088)				—
Payment of offering costs			—				(89,667)
Net cash (used in) provided by financing activities			(43,326)				2,986,320
Effect of exchange rate changes on cash and restricted cash			378,523				(265,228)
Net (decrease) increase in cash and restricted cash			(287,107)				1,467,435
Cash and restricted cash at the beginning of period			3,323,126				2,846,659
Cash and restricted cash at the end of period		$	3,036,019			$	4,314,094
Reconciliation of cash and restricted cash, end of period
Cash		$	2,978,868			$	4,120,178
Restricted cash			57,151				193,916
Cash and restricted cash at the end of period		$	3,036,019			$	4,314,094
Supplemental cash flow disclosures:
Cash paid for income tax		$	1,795			$	97,101
Cash paid for interest		$	40,657			$	36,403
Non-cash investing activities:
Right-of-use assets obtained in exchange for operating lease obligations		$	54,345			$	15,287

 

 

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SOURCE HUHUTECH International Group Inc.

FAQ

What were HUHUTECH's (HUHU) key financial results for H1 FY2025?

HUHUTECH reported revenue of $9.8 million (up 10.9%), net loss of $8.7 million, and earnings per share loss of $0.38. Gross margin was 32.0%, down from 35.6% in the previous year.

Why did HUHUTECH (HUHU) report a net loss in H1 FY2025?

The net loss was primarily due to a 511.5% increase in operating expenses to $11.8 million, mainly attributed to an $8.8 million increase in share-based compensation.

How significant is HUHUTECH's Japanese market performance in H1 FY2025?

The Japanese market was highly significant, completing 155 projects and contributing 60.9% of total revenue, up from 54 projects and 47.6% of revenue in the same period last year.

What strategic expansions did HUHUTECH (HUHU) make in H1 FY2025?

HUHUTECH established a new subsidiary in the United States and acquired a German subsidiary to expand into key semiconductor markets globally.

How much cash does HUHUTECH (HUHU) have as of June 30, 2025?

HUHUTECH had $3.0 million in cash as of June 30, 2025, slightly down from $3.1 million at December 31, 2024.