Ispire Technology Inc. (Nasdaq: ISPR) posted a surge in revenue for the first quarter ended Sept. 30, driven by strong sales in its cannabis and tobacco vaping products.
The company reported a 59.1% increase in revenue, reaching $42.9 million, compared to $26.9 million in the same period last year. The growth is primarily attributed to a 35% increase in sales of tobacco vaping products, which contributed $25.5 million, and the 117% increase in sales of cannabis vaping products, which added $17.3 million during the quarter.
Despite the increase in gross profit, which rose 43.7% to $6.9 million, the company’s gross margin fell to 16.1% from 17.8% in the previous year. That suggests a higher cost of sales, possibly linked to expanding market reach and product development.
“The establishment of a new manufacturing facility in Malaysia marks a strategic step into the Southeast Asian market, signaling our readiness for scalable operations,” Wang said in a statement. “As we progress through the fiscal year, we are on track to not only meet but also exceed our revenue projections for both cannabis and tobacco vaping products.”
The company’s total operating expenses rose by 29.8% to $7.8 million. However, the increase in spending did not prevent a reduction in net loss, which improved to $1.4 million from a loss of $2 million in the same quarter of the previous year.
At the end of the period, Ispire reported having $25.7 million in cash and cash equivalents, with a working capital of $27.6 million. The company expressed confidence that its current financial resources, along with cash flows from operations, would support its working capital needs for the next 12 months.
For the fiscal year 2024, Ispire projects revenues for cannabis vaping products to be between $80 million and $90 million, and for tobacco vaping products to be between $100 million and $110 million. The projections represent a jump in growth from the fiscal year 2023, highlighting the company’s optimistic outlook.