Aeries Technology (AERT) Q3 2025 earnings summary

Executive summary

• Leadership transition with new CEO and CFO appointments in February 2025, signaling a strategic shift toward transformation and growth.

• North American revenue grew 13.1% year-over-year, now representing over 93% of total revenue, while total revenue declined 6.8% to $17.6M for the quarter ended December 31, 2024.

• Net income was $2.0M, a turnaround from a $16.3M loss in the prior year quarter.

• Core adjusted EBITDA improved to $1.5M from $(0.02)M year-over-year, but adjusted EBITDA was $(2.0)M, down from $2.4M.

• Exited non-core segments, notably the Middle East, to sharpen focus and improve profitability.

Financial highlights

• North American revenue grew 13.1% year-over-year to $16.4M; total revenue was $17.6M, down 6.8% year-over-year.

• Gross profit was $4.0M with a gross margin of 23.0%, down from $6.0M and 32% year-over-year.

• Income from operations was negative $5.2M, down from $0.7M in the prior year quarter.

• Net income improved to $2.0M from negative $16.3M year-over-year, aided by a $5.1M gain from fair value changes in liabilities.

• Adjusted EBITDA was negative $2.0M; core adjusted EBITDA was $1.5M, up from negative $0.02M.

Outlook and guidance

• Fiscal 2025 revenue guidance reiterated at $71M–$73M; core adjusted EBITDA expected at $6M–$7M.

• Fiscal 2026 outlook: revenue $74M–$80M, adjusted EBITDA $6M–$8M; core adjusted EBITDA will be discontinued as non-core credit losses are expected to be fully addressed.

• Annual revenue is expected to decline by $11.9M due to a major customer non-renewal, partially offset by a $3.1M one-time buyout payment and a new service agreement.

• Management expects sufficient liquidity for the next 12 months if FPA liabilities are not settled in cash; otherwise, financial resources may be insufficient.

• The company is pursuing capital raising, cost-cutting, and restructuring to address liquidity and operational challenges.