Pinnacle Food Reports 57 Percent Revenue Increase and Net Profit of $286K in 2024

Rhea-AI Summary

Pinnacle Food Group (Nasdaq: PFAI), a provider of smart hydroponic growing systems, reported significant revenue growth but lower profits for fiscal year 2024. The company achieved revenue of $3.29M, marking a 57% increase from 2023, driven by higher system sales of over 3,000 units. However, net profit decreased to $286K ($0.03 per share) from $918K ($0.11 per share) in 2023.

The profit decline was attributed to increased cost of revenue, resulting in reduced gross margin of 47% (down from 61%), and a 303% rise in operating expenses related to IPO preparation. The company successfully completed its IPO in April 2025, raising $7.2M in gross proceeds. Management plans to focus on larger smart farming systems and expand into the APAC region.

Positive

• Revenue increased by 57% year-over-year to $3.29M
• Unit sales grew to over 3,000 smart farming systems (vs 2,600 in 2023)
• Cash position strengthened to $686K (from $121K in 2023)
• Successfully completed IPO raising $7.2M in gross proceeds
• Strategic shift towards larger systems targeting community groups and urban farms

Negative

• Net profit declined 69% to $286K from $918K year-over-year
• Gross profit margin decreased to 47% from 61% in 2023
• Operating costs increased significantly by 303% due to IPO preparation

Insights

Financial Analyst

Pinnacle shows strong revenue growth but declining profits amid IPO preparation and lower margins; recent capital raise provides growth runway.

Pinnacle Food's financial results present a mixed picture for investors. While revenue increased impressively by 57% to $3.29 million, net profit declined substantially from $917,687 to $286,142, representing a 69% decrease in profitability. This translated to earnings of $0.03 per share, down from $0.11 in 2023.

The profit decline stems from two key factors: First, gross margin compressed significantly from 61% to 47% due to a $915,998 increase in cost of revenue. Second, operating expenses surged by 303% ($707,085) related to IPO preparation.

Unit sales growth was more modest than revenue growth, with smart farming system sales increasing from 2,600 to 3,000 units (15.4% growth), suggesting either price increases or a shift toward higher-priced products. The company's cash position improved from $121,368 to $685,796 by year-end 2024, and was further bolstered by the April 2025 IPO that raised $7.2 million in gross proceeds.

This capital infusion provides significant runway for the company's growth initiatives, particularly important given the current compressed margins. The strategic shift toward larger systems for community groups and urban farms could potentially improve the company's economics if successfully executed, as could the planned expansion into the APAC market.

Agricultural Technology Specialist

Pinnacle's operational metrics reveal both opportunities and challenges in the smart hydroponic systems market. The 15.4% year-over-year increase in unit sales (from 2,600 to 3,000 systems) demonstrates growing market acceptance of their technology, though at a relatively small scale that suggests they're still in early market development.

The significant margin compression (from 61% to 47%) raises questions about cost structure and pricing power. This could reflect rising component costs, competitive pricing pressures, or inefficiencies in their production processes. The hydroponic systems market typically benefits from economies of scale, which Pinnacle hasn't yet fully realized given their current production volumes.

The CEO's strategy to shift toward larger systems for community groups and urban farms makes technical sense. Larger hydroponic installations generally offer better economics through more efficient resource utilization (water, energy, nutrients) per growing area. They also typically require more sophisticated controls and monitoring systems, potentially commanding higher margins than consumer-oriented products.

The planned expansion into APAC aligns with market trends, as urban farming has gained significant traction in space-constrained, food-security conscious Asian markets like Singapore, Japan, and urban China. These markets often have supportive government policies for urban agriculture technologies, potentially accelerating adoption of Pinnacle's systems if they can successfully navigate the region's unique requirements.

Vancouver, BC, July 17, 2025 (GLOBE NEWSWIRE) -- Pinnacle Food Group Limited (Nasdaq: PFAI) (“Pinnacle” or “the Company”), a seller of smart hydroponic growing systems and technical support services to individual households, community groups, and urban farms, today announced that, for the year ended December 31, 2024, the Company had revenue of $3,289,862, a 57 percent increase compared with revenue of $2,100,819 for the year ended December 31, 2023. The Company had a net profit of $286,142, or $.03 per share, for the year ended December 31, 2024, compared with a net profit of $917,687, or $.11 per share, in 2023.

Pinnacle’s increased revenue in 2024 resulted from an increase in sales of its smart farming systems compared to 2023. The Company sold over 3,000 smart farming systems in 2024 compared to 2,600 systems in fiscal 2023. 

The Company’s decrease in net profit in fiscal 2024 was primarily the result of an increase in cost of revenue of $915,998, which resulted in a decrease in gross profit margin to 47 percent compared with 61 percent in fiscal 2023, as well as an increase of $707,085, or 303 percent, in total operating costs and expenses as the Company prepared for its IPO.

The Company had cash of $685,796 at December 31, 2024 and $121,368 at the same date a year earlier.

Pinnacle closed its IPO on April 23, 2025, raising gross proceeds of $7.2 million.

“We are encouraged by our strong revenue performance in fiscal 2024,” said Pinnacle chief executive Jiulong You. “Going forward, we anticipate our sales mix shifting to include more of our larger smart farming systems sold to community groups and urban farms, thus improving our revenue base and margins. We also intend to expand our sales footprint into the APAC region, where we believe demand for smart farming systems is growing rapidly.”

Mr. You said he looked forward to sharing additional details on the above developments “in the near future.”

About Pinnacle Food Group Limited

Incorporated in Cayman Islands, Pinnacle Food Group Limited sells smart hydroponic growing systems and technical support services to individual households, community groups, and urban farms. Pinnacle offers both tailored hardware solutions and data-driven support, allowing users to optimize their smart farming productivity. For more information, please visit the Company’s website at https:// www.pinnaclefoodinc.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the expected trading commencement and closing dates. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These statements are subject to uncertainties and risks, including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the “Risk Factors” section of the registration statement for the offering filed with the SEC. 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 registration statement and other filings with the SEC. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov.

Pinnacle Food Group Limited Investor Contact:                                                                           
Wencai Pan                                                                                                                                                            
Chief Financial Officer                                                                                                                                           
Office: +1 604 727 7204                                                                                                                               
Email: ir@pinnaclefoodinc.com 

Investor Relations Inquiries:
Skyline Corporate Communications Group, LLC
Scott Powell, President
1177 Avenue of the Americas, 5th Floor
New York, New York 10036
Office: (646) 893-5835
Email: info@skylineccg.com 

FAQ

What was Pinnacle Food's (PFAI) revenue growth in 2024?

Pinnacle Food reported revenue of $3.29M in 2024, representing a 57% increase compared to $2.1M in 2023.

How many smart farming systems did PFAI sell in 2024?

Pinnacle Food sold over 3,000 smart farming systems in 2024, compared to 2,600 systems in 2023.

What was Pinnacle Food's (PFAI) net profit in 2024?

PFAI reported a net profit of $286,142 ($0.03 per share) in 2024, down from $917,687 ($0.11 per share) in 2023.

How much did Pinnacle Food raise in its IPO?

Pinnacle Food completed its IPO on April 23, 2025, raising gross proceeds of $7.2 million.

What caused PFAI's profit decline in 2024?

The profit decline was due to increased cost of revenue leading to lower gross margins (47% vs 61%) and a 303% increase in operating expenses related to IPO preparation.