Algorhythm Holdings Reports Second Quarter 2025 Financial Results

Rhea-AI Summary

Algorhythm Holdings (NASDAQ: RIME) reported its Q2 2025 financial results, marking significant improvements in performance. Revenue increased to $2.7 million from $2.4 million year-over-year, while gross profit margin expanded to 35.1% from 13.3%. The company substantially reduced its net loss to $0.8 million from $6.1 million in Q2 2024.

Key strategic moves included the acquisition of SMCB Solutions Private Ltd. (SemiCab India) and the sale of its Singing Machine subsidiary for $4.5 million. SemiCab secured five new contracts with major FMCG companies in India and expanded four existing contracts, growing its fleet from 140 to 450 trucks. The company projects its annualized revenue run rate to reach $23 million and aims to expand its fleet to over 1,000 vehicles by end-2025.

[ "Revenue increased to $2.7 million, up from $2.4 million year-over-year", "Gross profit margin significantly improved to 35.1% from 13.3%", "Net loss substantially decreased by $5.3 million to $0.8 million", "Sale of Singing Machine subsidiary for $4.5 million eliminated $4.0 million in liabilities", "SemiCab won five new FMCG contracts and expanded four existing ones by 100-200%", "Fleet size more than tripled from 140 to 450 trucks", "SemiCab's annualized revenue run rate grew from $2M to $7M since January" ]

Positive

• None.

Negative

• Operating expenses remain high at $1.7 million despite reduction
• Cash position relatively low at $1.1 million
• Company continues to operate at a net loss

Insights

Financial Analyst

Algorhythm's transformation shows improved financials but remains unprofitable despite strategic pivot to AI logistics.

Algorhythm Holdings has executed a strategic pivot that's starting to bear fruit in Q2 2025. Revenue increased modestly by 12.5% year-over-year to $2.7 million, but the real story lies in the dramatic improvement in gross margins—from 13.3% to 35.1%. This 21.8 percentage point expansion shows the company's shift toward higher-margin technology services is working.

The significant reduction in operating expenses ($4.8 million decrease) directly contributed to the improved bottom line, with net loss narrowing substantially from $6.1 million to $0.8 million. Two strategic moves drove this transformation: acquiring SemiCab India (expanding their AI logistics platform) and divesting the Singing Machine karaoke business for $4.5 million, which eliminated approximately $4.0 million in liabilities.

The cash position of $1.1 million remains concerning given the continued losses, representing less than two quarters of runway at current burn rates. However, management's guidance suggests further reductions in net losses over the next year.

The SemiCab business shows promising growth metrics—increasing from a $2 million annualized revenue run rate in January to $7 million currently (a 250% increase). The expansion of the fleet from 140 to 450 trucks and plans to reach 1,000 vehicles by year-end indicate strong demand. The company has secured five new contracts with multinational FMCG companies while expanding four existing contracts by 100-200% in volume, suggesting a potential $23 million annualized revenue run rate.

This transformation has repositioned Algorhythm as an asset-light, technology-focused AI logistics company with improving economics, but investors should note it remains unprofitable with limited cash reserves despite the positive trajectory.

Fort Lauderdale, FL, Aug. 20, 2025 (GLOBE NEWSWIRE) -- Algorhythm Holdings, Inc. (“Algorhythm”) (NASDAQ: RIME) – an AI technology holding company, announced today its results of operations for the second quarter ended June 30, 2025.

Second Quarter Financial Highlights:

• Revenues increased to $2.7 million in the second quarter of 2025 compared to $2.4 million in the same period last year.
  
  
• Gross profit margin increased to 35.1% in the second quarter of 2025 from 13.3% in the same period of the prior year. Gross profit was approximately $1.0 million for the second quarter 2025.
  
  
• Total operating expenses decreased by $4.8 million to $1.7 million in the second quarter of 2025, compared to $6.5 million in the same period last year.
  
  
• Net loss decreased by $5.3 million to $0.8 million for the second quarter of 2025 compared to $6.1 million in the same period last year.
  
  
• Cash on hand was $1.1 million as of June 30, 2025.
  

Second Quarter Business Highlights:

Algorhythm had a breakthrough quarter, marked by several major accomplishments since the beginning of the quarter. Most notable were the following:

• Algorhythm completed the acquisition of SMCB Solutions Private Ltd. (“SemiCab India”), the Indian managed services provider of SemiCab’s AI logistics platform.
  
  
• Algorhythm completed the sale of its consumer karaoke subsidiary, Singing Machine, for $4.5 million, trimming approximately $4.0 million in liabilities and strengthening its balance sheet.
  
  
• SemiCab won five new contracts with leading multinational fast moving consumer goods (“FMCG”) companies in India, expanding its footprint in the country’s high-growth logistics market.
  
  
• Four existing contracts were expanded, with lanes and volumes increasing by 100%–200%, driving significant revenue growth potential.
  
  
• Fleet size increased from 140 to 450 trucks, positioning SemiCab to raise its annualized revenue run rate to $23 million.
  

“Our second quarter was marked by the achievement of several milestones that built upon the momentum that we gathered during our first quarter,” stated Gary Atkinson, Chief Executive Officer of Algorhythm. “With the acquisition of SemiCab India and the sale of our Singing Machine business, we transformed Algorhythm Holdings into a high-growth, technology-focused AI distribution and logistics company while significantly reducing our cash burn and strengthening our balance sheet.”

Mr. Atkinson continued, “We are now a people-light, asset-light, nimble and a cutting-edge technology company serving some of the largest consumer packaged goods companies in the world. Our SemiCab business has grown almost 300% from an annualized revenue run rate (ARR) of approximately $2 million in January to more than $7 million today, and is still quickly growing. We plan to develop our pipeline of pending contracts with new transporters to grow our fleet to over 1,000 vehicles by the end of 2025 to keep pace with demand. As more shippers and carriers join our platform, the flywheel begins to spin—network effects grow, and opportunities to optimize truck utilization multiply, unlocking significant value.”

Q2 2025 Financial Summary

“Revenue for Q2 increased to $2.7 million, up from $2.4 million in the same period last year, driven primarily by the contribution from our SemiCab India acquisition, even for a partial quarter,” said Alex Andre, Chief Financial Officer of Algorhythm.

“Net loss improved dramatically to $0.8 million, compared to a net loss of $6.1 million last year, reflecting a $3.9 million reduction in operating lease impairment and lower general and administrative expenses,” Mr. Andre continued. “We expect net loss to continue trending lower over the next 12 months, primarily due to the sale of Singing Machine and the corresponding reduction in operating expenses which will be partially offset by strategic investments to accelerate growth in our SemiCab business.”

Conference Call Details:

Date: Wednesday, August 20, 2025
Time: 10:00 a.m. EDT
Dial-in number: 888-999-3182
Conference ID: RIME

An audio rebroadcast of the call will be available later in the day at:

https://ir.algoholdings.com

About Algorhythm Holdings

Algorhythm Holdings, Inc. is an AI technology company focused on the growth and development of SemiCab, an emerging leader in the global logistics and distribution industry. Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address these common supply-chain problems globally. Its AI-enabled, cloud-based Collaborative Transportation Platform achieves the scalability required to predict and optimize millions of loads and hundreds of thousands of trucks. SemiCab uses real-time data from API-based load tendering and pre-built integrations with TMS and ELD partners to orchestrate collaboration across manufacturers, retailers, distributors, and their carriers. SemiCab uses AI/ML predictions and advanced predictive optimization models to enable fully loaded round trips. With SemiCab’s AI platform, shippers pay less and carriers make more without having to change a thing.

For additional information, please go to: http://www.semicab.com

Investor Relations Contact:
Brendan Hopkins
407-645-5295
investors@algoholdings.com 
www.algoholdings.com

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as "expects," "anticipates," "believes," "will," "will likely result," "will continue," "plans to," "potential," "promising," and similar expressions. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including the risk factors described from time to time in Algorhythm’s reports to the SEC, including, without limitation Algorhythm’s Annual Report on Form 10-K for the year ended December 31, 2024. You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this press release. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this press release to conform our statements to actual results or changed expectations, or as a result of new information, future events or otherwise.

Algorhythm Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30, 2025				December 31, 2024
		(unaudited)
Assets
Current Assets
Cash		$	1,134,000			$	7,550,000
Accounts receivable, net of allowances of $101,000 and $274,000, respectively			2,317,000				4,373,000
Accounts receivable, related party			124,000				212,000
Note receivable - related party			-				701,000
Inventory			2,733,000				2,186,000
Returns asset			93,000				1,621,000
Prepaid expenses and other current assets			1,219,000				120,000
Total Current Assets			7,620,000				16,763,000
Property and equipment, net			252,000				284,000
Other non-current assets			90,000				124,000
Intangible assets, net			315,000				345,000
Goodwill			4,418,000				786,000
Total Assets		$	12,695,000			$	18,302,000
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable		$	1,996,000			$	3,808,000
Accrued expenses			3,295,000				4,224,000
Refund due to customer			1,232,000				38,000
Reserve for sales returns			521,000				3,355,000
Warrant liability			-				16,603,000
Promissory notes payable,net			379,000				-
Current portion of promissory note payable - SemiCab, Inc.			1,500,000				-
Current portion of notes payable to related parties			265,000				265,000
Other current liabilities			62,000				145,000
Total Current Liabilities			9,250,000				28,438,000
Notes payable to related parties, net of current portion			385,000				385,000
Promoissory note payable - SemiCab, Inc., net of current portion			250,000				-
Total Liabilities			9,885,000				28,823,000
Commitments and Contingencies
Shareholders’ Equity (Deficit)
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no shares issued and outstanding at June 30, 2025 and December 31, 2024			-				-
Common stock, $0.01 par value; 800,000,000 and 100,000,000 shares authorized; 2,514,571 and 470,825 shares issued and outstanding at June 30, 2025 and December 31, 2024			25,000				5,000
Additional paid-in capital			63,854,000				39,682,000
Accumulated deficit			(58,948,000	)			(49,172,000	)
Non-controlling interest			(1,363,000	)			(1,036,000	)
Treasury stock, 10,990 and 0 shares reserved at June 30, 2025 and December 31, 2024			(758,000	)			-
Total Algorhythm Holdings Shareholders’ Equity (Deficit)			2,810,000				(10,521,000	)
Total Liabilities and Shareholders’ Equity (Deficit)		$	12,695,000			$	18,302,000

Algorhythm Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		For the Three Months Ended								For the Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
Net Sales		$	2,716,000			$	2,440,000			$	4,709,000			$	4,866,000
Cost of Goods Sold			1,762,000				2,116,000				3,255,000				4,040,000
Gross Profit			954,000				324,000				1,454,000				826,000
Operating Expenses
Selling expenses			234,000				547,000				998,000				1,177,000
General and administrative expenses			1,502,000				2,053,000				4,048,000				4,212,000
Operating lease impairment expense			-				3,878,000				-				3,878,000
Total Operating Expenses			1,736,000				6,478,000				5,046,000				9,267,000
Loss from Operations			(782,000	)			(6,154,000	)			(3,592,000	)			(8,441,000	)
Other Expenses
Change in fair value of warrant liability			-				-				(6,468,000	)			-
Interest expense			(27,000	)			(17,000	)			(43,000	)			(45,000	)
Total Other Expenses			(27,000	)			(17,000	)			(6,511,000	)			(45,000	)
Loss Before Income Tax Benefit			(809,000	)			(6,171,000	)			(10,103,000	)			(8,486,000	)
Income Tax Benefit			-				52,000				-				-
Net Loss			(809,000	)			(6,119,000	)			(10,103,000	)			(8,486,000	)
Net loss attributable to non-controlling interest			224,000				-				327,000				-
Net Loss Available to Common Shareholders		$	(585,000	)		$	(6,119,000	)		$	(9,776,000	)		$	(8,486,000	)
Income (Loss) Per Common Share
Basic and diluted		$	(0.24	)		$	(190.68	)		$	(4.40	)		$	(264.44	)
Weighted Average Common and Common
Equivalent Shares:
Basic and diluted			2,472,464				32,090				2,224,047				32,090

Algorhythm Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		For the Six Months Ended
		June 30, 2025				June 30, 2024
Cash flows from operating activities
Net loss		$	(10,103,000	)		$	(8,486,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			96,000				125,000
Reduction in SMCB loan in exchange for services			304,000				-
Gain on allowance for credit loss			(439,000	)			-
Change in fair value of warrant liability			6,468,000				-
Provision for estimated cost of returns			1,528,000				1,301,000
Provision for inventory obsolescence			4,000				-
Credit losses			3,000				14,000
Impairment expense			-				3,878,000
Reserve for sales returns			(2,834,000	)			(1,217,000	)
Stock-based compensation			47,000				36,000
Changes in operating assets and liabilities:
Accounts receivable			2,372,000				4,945,000
Due from banks			-				(187,000	)
Accounts receivable - related parties			88,000				(145,000	)
Inventories			(551,000	)			(38,000	)
Prepaid expenses and other current assets			(722,000	)			69,000
Other non-current assets			523,000				(64,000	)
Accounts payable			(2,184,000	)			(3,940,000	)
Accrued expenses			(1,147,000	)			(771,000	)
Refunds due to customers			1,194,000				(649,000	)
Other liabilities			(83,000	)			(281,000	)
Net cash used in operating activities			(5,436,000	)			(5,410,000	)
Cash flows from investing activities
Purchase of property and equipment			(22,000	)			(6,000	)
Repurchase of shares of common stock			(758,000	)			-
Cash received from acquisition of SMCB			593,000				-
Advances to SMCB			(1,172,000	)			-
Net cash used in investing activities			(1,359,000	)			(6,000	)
Cash flows from financing activities
Proceeds from issuance of promissory notes, net			379,000				-
Other			-				(42,000	)
Net cash provided by (used in) financing activities			379,000				(42,000	)
Net change in cash			(6,416,000	)			(5,458,000	)
Cash at beginning of year			7,550,000				6,703,000
Cash at end of period		$	1,134,000			$	1,245,000
Supplemental disclosures of cash flow information:
Cash paid for interest		$	43,000			$	40,000
Non-Cash investing and financing cash flow information:
Reclassification of Series A warrants to equity		$	7,857,000			$	-
Common stock issued for exercise of Series B warrants		$	15,214,000			$	-
Common stock issued for acquisition of SMCB		$	316,000			$	-
Promissory note issued for acquisition of SMCB		$	1,750,000			$	-

FAQ

What were RIME's Q2 2025 earnings results?

Algorhythm Holdings reported revenue of $2.7 million, a gross profit margin of 35.1%, and reduced its net loss to $0.8 million in Q2 2025.

How much did Algorhythm Holdings sell its Singing Machine subsidiary for?

Algorhythm Holdings sold its Singing Machine subsidiary for $4.5 million, which helped eliminate approximately $4.0 million in liabilities.

What is RIME's projected fleet size and revenue run rate for 2025?

The company aims to grow its fleet to over 1,000 vehicles by the end of 2025, with a projected annualized revenue run rate of $23 million.

How many new contracts did SemiCab India secure in Q2 2025?

SemiCab secured five new contracts with leading FMCG companies in India and expanded four existing contracts with 100-200% increase in lanes and volumes.

What was RIME's cash position as of June 30, 2025?

Algorhythm Holdings reported cash on hand of $1.1 million as of June 30, 2025.