Linkage Global Inc Announces First Half 2025 Financial Results

Rhea-AI Summary

Linkage Global Inc (LGCB) reported challenging financial results for H1 2025, with total revenues declining 27.02% to $3.50 million from $4.80 million in H1 2024. Despite revenue decline, gross profit increased significantly by 280.57% to $2.70 million, driven by the company's strategic pivot to fully managed e-commerce services.

The company's traditional cross-border sales dropped sharply by 82.35% to $0.80 million, while integrated e-commerce services surged by 930.08% to $2.70 million. Operating expenses increased 91.01% to $4.34 million, primarily due to higher administrative costs. The net loss widened by 119.62% to $3.09 million, impacted by significant interest expenses from a $10 million convertible bond issuance with a 42.52% interest rate.

Positive

• None.

Negative

• Total revenue declined 27.02% to $3.50 million
• Net loss widened 119.62% to $3.09 million
• Cross-border sales dropped 82.35% to $0.80 million
• Operating expenses increased 91.01% to $4.34 million
• High interest expenses of $1.50 million from convertible bonds with 42.52% interest rate

TOKYO, July 03, 2025 (GLOBE NEWSWIRE) -- Linkage Global Inc (“Linkage Cayman”, or the “Company”), a cross-border e-commerce integrated services provider headquartered in Japan, today announced its unaudited financial results for the six months ended March 31, 2025.

First Half 2025 Selected Financial Metrics

• Total revenues decreased by approximately $1.30 million to approximately $3.50 million for the six months ended March 31, 2025, compared to approximately $4.80 million for the same period of 2024.
• Gross profit increased by approximately $1.99 million to $2.70 million for the six months ended March 31, 2025, from approximately $0.71 million for the same period of 2024. Cross-border sales margin improved from 12.70% to 21.31%, while integrated e-commerce services margin rose from 50.67% to 93.56% during the same period.
• Net loss increased from approximately $1.41 million for the six months ended March 31, 2024 to approximately $3.09 million for the six months ended March 31, 2025.
  

First Half 2025 Financial Results

Revenues

Total revenues declined by approximately $1.30 million, or 27.02%, from approximately $4.80 million for the six months ended March 31, 2024, to approximately $3.50 million for the same period of 2025, mainly due to a sharp drop in cross-border sales.

Revenues from cross-border sales fell by approximately $3.74 million, or 82.35%, from approximately $4.54 million for the six months ended March 31, 2024 to approximately $0.80 million for the six months ended March 31, 2025. EXTEND, our Japanese subsidiary, contributed $0.43 million or 12.32% of total revenue, down 87.66% year-over-year. This decline was driven by poor market response to its 3C electronics product strategy. In response, the Company shifted focus to higher-margin, fully managed e-commerce services and reallocated staff accordingly. The cross-border business is now being restructured, with new product selections and the Company plans to explore TikTok store and livestream sales in Japan.

Revenues from Integrated e-commerce services surged by $2.44 million, or 930.08%, from approximately $0.26 million to $2.70 million for the six months ended March 31, 2025, largely due to the launch of fully managed e-commerce operations in 2025. This new model, contributing $2.59 million in revenue and $2.46 million in gross profit, involves end-to-end store management for merchants, with fees based on gross merchandize volume (GMV).

Revenues from digital marketing dropped from approximately $0.13 million for the six months ended March 31, 2024 to approximately $0.08 million for the six months ended March 31, 2025, after ending the Google partnership in January 2025 and beginning deregistration in April. Revenues from training and consulting, TikTok agent services declined by $0.10 million, or 75.25%, from $0.13 million to $0.03 million.

Cost of Revenues

Cost of revenues fell 80.34%, from approximately $4.09 million for the six months ended March 31, 2024, to approximately $0.80 million for the same period in 2025. This was mainly due to a sharp drop in cross-border sales costs, which declined $3.33 million, or 84.09%, from $3.96 million to $0.63 million, reflecting reduced procurement in line with lower sales. In contrast, costs for integrated e-commerce services rose $0.04 million, or 34.55%, from $0.13 million to $0.17 million. Of this, $0.13 million was related to the new fully managed e-commerce business, primarily covering staff salaries. Commission costs declined due to the termination of related services.

Gross Profit        

Gross profit increased by approximately $1.99 million, or 280.57%, from approximately $0.71 million to approximately $2.70 million, mainly driven by the new fully managed e-commerce business, which contributed $2.46 million in profit with a 95.12% margin. The high margin was due to low operating costs, mostly staff salaries, with no enterprise resource planning development expenses in the current period as they were previously recognized. Cross-border sales margin improved from 12.70% to 21.31% due to a shift toward higher-margin products. Integrated e-commerce services margin rose from 50.67% to 93.56%, also driven by the new business model.

Operating Expenses

Operating expenses rose by 91.01%, from approximately $2.27 million to approximately $4.34 million, mainly due to higher general and administrative expenses, which increased 123.94%, from $1.74 million to $3.90 million for the six months ended March 31, 2025, which was primarily attributable to the allowance for credit loss, stock-based compensation and post-IPO financial and legal consulting fees.

Selling and marketing expenses dropped 31.15%, from approximately $0.23 million to approximately $0.16 million, due to lower freight and advertising costs, as well as lower marketing and promotion expenses.

Research and development expenses declined 7.87%, from approximately $0.30 million to approximately $0.27 million, as ERP development staff shifted to operational roles and their salaries were reclassified under business costs.

Other Expenses

Other expenses mainly include non-operating income and interest expenses, net. Non-operating income rose from $998 to approximately $0.39 million. Net interest expenses increased significantly from approximately $0.06 million to approximately $1.50 million, mainly due to the issuance of $10 million in convertible bonds in October 2024, with an actual interest rate of 42.52%, generating $1.56 million in interest expenses during the reporting period.

Income Tax (Provision)/Benefit

Income tax (provision) /benefit decreased by approximately $0.56 million, from approximately $0.02 million of tax benefit for the six months ended March 31, 2024 to approximately $0.34 million of tax expenses for the six months ended March 31, 2025. This decrease was primarily attributable to net profit for the fully managed e-commerce operation services with a tax rate of 16.5%.

Net Loss

As a result, net loss increased by approximately $1.68 million, or 119.62%, from approximately $1.41 million to approximately $3.09 million.

About Linkage Global Inc

Linkage Global Inc is a holding company incorporated in the Cayman Islands with no operations of its own. Linkage Cayman conducts its operations through its operating subsidiaries in Japan, Hong Kong, and mainland China. As a cross-border e-commerce integrated services provider headquartered in Japan, through its operating subsidiaries, the Company has developed a comprehensive service system comprised of two lines of business complementary to each other, including (i) cross-border sales and (ii) integrated e-commerce services. For more information, please visit www.linkagecc.com.

Safe Harbor Statement

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 identify these forward-looking statements by words or phrases such as “approximates,” “assesses,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or similar expressions. 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 reports on Form 20-F and other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

Investor Relations

WFS Investor Relations Inc.

Connie Kang, Partner

Email: ckang@wealthfsllc.com

Tel: +86 1381 185 7742

Linkage Global Inc UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2025 AND SEPTEMBER 30, 2024 (In U.S. dollars, except for share and per share data, or otherwise noted)
		As of March 31, 2025				As of September 30, 2024
		USD
ASSETS
Current assets
Cash and cash equivalents			328,081				2,000,732
Accounts receivable, net			6,405,486				6,302,696
Inventories, net			35,675				66,331
Deposits paid to media platforms			—				482,650
Prepaid expenses and other current assets, net			1,625,517				2,689,581
Amount due from related parties			1,243,450				—
Short-term loan to third party			8,993,306				410,000
Interest receivable from loan to third party			386,261				—
Total current assets			19,017,776				11,951,990
Non-current assets
Property and equipment, net			50,594				85,807
Right-of-use assets, net			516,167				653,730
Total non-current assets			566,761				739,537
TOTAL ASSETS			19,584,537				12,691,527
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable			324,069				624,723
Accrued expenses and other current liabilities			303,413				236,813
Short-term debts			—				32,810
Current portion of long-term debts			243,557				428,702
Contract liabilities			208,483				533,625
Amounts due to related parties			—				314,544
Lease liabilities - current			203,600				231,978
Convertible notes			7,884,325				964,865
Interest payable of convertible notes			1,555,689				—
Income tax payable			850,866				1,017,619
Total current liabilities			11,574,002				4,385,679
Non-current liabilities
Long-term debts			734,023				839,560
Lease liabilities – non-current			334,973				441,504
Total non-current liabilities			1,068,996				1,281,064
Total liabilities			12,642,998				5,666,743
Commitments and contingencies (Note 21)
Shareholders’ equity
Class A ordinary shares (par value of US$0.0025 per share; 998,000,000 ordinary shares authorized, 3,080,000 and 2,150,000 ordinary shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively) *			7,700				5,375
Class B ordinary shares (par value of US$0.0025 per share; 2,000,000 ordinary shares authorized, 700,000 and nil ordinary shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively) *			1,750				—
Additional paid in capital			8,564,021				5,591,596
Treasury Shares			(500	)			—
Statutory reserve			11,348				11,348
Retained earnings			(1,474,142	)			1,613,217
Accumulated other comprehensive loss			(168,638	)			(196,752	)
Total shareholders’ equity			6,941,539				7,024,784
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			19,584,537				12,691,527

Linkage Global Inc UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024 (In U.S. dollars, except for share and per share data, or otherwise noted)
		For the six months ended March 31,
		2025				2024
		USD
Revenues			3,501,947				4,798,363
Cost of revenues			(804,142	)			(4,089,486	)
Gross profit			2,697,805				708,877
Operating expenses
General and administrative expenses			(3,904,027	)			(1,743,309	)
Selling and marketing expenses			(157,637	)			(228,956	)
Research and development expenses			(274,371	)			(297,811	)
Total operating expenses			(4,336,035	)			(2,270,076	)
Operating loss			(1,638,230	)			(1,561,199	)
Other expenses
Interest expenses, net			(1,496,504	)			(60,726	)
Other non-operating income			387,816				998
Total other expenses			(1,108,688	)			(59,728	)
Loss before income taxes			(2,746,918	)			(1,620,927	)
Income tax (provision)/ benefit			(340,441	)			215,161
Net loss			(3,087,359	)			(1,405,766	)
Net loss attributable to the Company’s ordinary shareholders			(3,087,359	)			—
Other comprehensive income/(loss)
Foreign currency translation adjustment			28,114				(10,107	)
Total comprehensive loss attributable to the Company’s ordinary shareholders			(3,059,245	)			(1,415,873	)
Loss per ordinary share attributable to ordinary shareholders
Basic and Diluted*			(0.90	)			(0.67	)
Weighted average number of ordinary shares outstanding
Basic and Diluted*			3,415,533				2,084,890

Linkage Global Inc UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024 (In U.S. dollars, except for share and per share data, or otherwise noted)
		For the six months ended March 31,
		2025				2024
		USD
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			(3,087,359	)			(1,405,766	)
Adjustments to reconcile net loss to net cash used in operating activities:
Effect of exchange rate changes			202,551				1,184
Allowance for credit loss			1,344,218				568,229
Interest payable of convertible notes			1,555,689				—
Interest receivable from loan to third party			(386,261	)			—
Stock-Based Compensation			1,209,000				—
Depreciation			22,205				40,959
Amortization of lease right-of-use assets			114,791				110,229
Inventory provision			4,328				2,203
Deferred tax benefits			—				(216,713	)
Changes in operating assets and liabilities:
Accounts receivable, net			(1,649,559	)			(725,166	)
Prepaid expenses and other current assets, net			(261,232	)			(3,233,957	)
Inventories, net			26,328				539,517
Accounts payable			(300,654	)			(320,628	)
Contract liabilities			(325,142	)			25,350
Accrued expenses and other current liabilities			66,600				(5,188	)
Amounts due from related parties			341,426				—
Amounts due to related parties			(314,238	)			(16,189	)
Tax payable			(166,753	)			928,135
Operating lease liabilities			(134,909	)			(103,326	)
Net cash used in operating activities			(1,738,971	)			(3,811,127	)
Cash flow from investing activities
Repayments of loan to a related party			(99,876	)			—
Loan to third party			(8,640,000	)			—
Net cash used in investing activities			(8,739,876	)			—
Cash flow from financing activities
Proceeds from issuance of Class A ordinary shares upon the completion of IPO			—				5,356,792
Proceeds from Issuance of convertible notes			9,002,368				—
Proceeds from short-term debts			—				132,258
Repayments of short-term debts			(32,810	)			(33,726	)
Repayments of long-term debts			(124,959	)			(179,420	)
Repayments of other long-term debts			(108,037	)			(878,962	)
Payments of listing expenses			—				(150,606	)
Net cash provided by financing activities			8,736,562				4,246,336
Effect of exchange rate changes			69,634				(58,969	)
Net change in cash and cash equivalents			(1,672,651	)			376,240
Cash and cash equivalents, beginning of the period			2,000,732				1,107,480
Cash and cash equivalents, end of the period			328,081				1,483,720
Supplemental disclosures of cash flow information:
Income tax paid			—				150,124
Interest expense paid			33,056				65,901
Supplemental disclosures of non-cash activities:
Obtaining right-of-use assets in exchange for operating lease liabilities			155,160				147,083

FAQ

What were Linkage Global's (LGCB) key financial results for H1 2025?

LGCB reported total revenues of $3.50 million (down 27.02%), gross profit of $2.70 million (up 280.57%), and a net loss of $3.09 million (increased 119.62%) for H1 2025.

How did Linkage Global's business segments perform in H1 2025?

Cross-border sales declined 82.35% to $0.80 million, while integrated e-commerce services surged 930.08% to $2.70 million. The new fully managed e-commerce business achieved a 95.12% profit margin.

What caused the increase in Linkage Global's net loss for H1 2025?

The increased net loss was primarily due to higher operating expenses (up 91.01% to $4.34 million) and significant interest expenses ($1.50 million) from convertible bonds with a 42.52% interest rate.

How has Linkage Global's business strategy changed in 2025?

The company shifted focus from cross-border 3C electronics sales to higher-margin fully managed e-commerce services, plans to explore TikTok store and livestream sales in Japan, and is restructuring its cross-border business.

What were the main factors affecting LGCB's operating expenses in H1 2025?

Operating expenses increased due to higher general and administrative expenses (up 123.94% to $3.90 million), including allowance for credit loss, stock-based compensation, and post-IPO financial and legal consulting fees.