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HeartCore Reports Third Quarter 2024 Financial Results

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HeartCore Enterprises (HTCR) reported outstanding Q3 2024 financial results with revenues surging 281% to $17.9 million and net income increasing 526% to $10.8 million. The company's success was primarily driven by its Go IPO business, with two clients successfully listing on Nasdaq during the quarter. Gross profit saw a remarkable 1,640% increase to $14.4 million, while operating expenses decreased to $2.3 million. The company has implemented strategic changes including transitioning to multi-year software licensing agreements and expanding its CMS platform to a SaaS delivery model. HeartCore maintained its leading market share in Japan for the ninth consecutive year and authorized a second dividend payment of $0.02 per share.

HeartCore Enterprises (HTCR) ha riportato risultati finanziari eccezionali per il terzo trimestre del 2024, con ricavi in aumento del 281%, raggiungendo 17,9 milioni di dollari e un reddito netto che è cresciuto del 526%, arrivando a 10,8 milioni di dollari. Il successo dell'azienda è stato principalmente guidato dal suo business Go IPO, con due clienti che hanno effettuato la quotazione con successo su Nasdaq durante il trimestre. L'utile lordo ha visto un notevole incremento del 1.640%, arrivando a 14,4 milioni di dollari, mentre le spese operative sono diminuite a 2,3 milioni di dollari. L'azienda ha implementato cambiamenti strategici, tra cui la transizione verso accordi di licenza software pluriennali e l'espansione della sua piattaforma CMS verso un modello di consegna SaaS. HeartCore ha mantenuto la sua quota di mercato leader in Giappone per il nono anno consecutivo e ha autorizzato un secondo pagamento di dividendi di 0,02 dollari per azione.

HeartCore Enterprises (HTCR) informó resultados financieros sobresalientes para el tercer trimestre de 2024, con ingresos que ascendieron un 281% a 17,9 millones de dólares y un ingreso neto que aumentó un 526% a 10,8 millones de dólares. El éxito de la compañía fue impulsado principalmente por su negocio de Go IPO, con dos clientes que lograron listar en Nasdaq durante el trimestre. El beneficio bruto experimentó un notable aumento del 1.640%, alcanzando los 14,4 millones de dólares, mientras que los gastos operativos disminuyeron a 2,3 millones de dólares. La empresa ha implementado cambios estratégicos, incluyendo la transición a acuerdos de licencia de software a varios años y la expansión de su plataforma CMS a un modelo de entrega SaaS. HeartCore mantuvo su participación de mercado líder en Japón durante el noveno año consecutivo y autorizó un segundo pago de dividendos de 0,02 dólares por acción.

HeartCore Enterprises (HTCR)는 2024년 3분기에 뛰어난 재무 실적을 보고하며, 수익이 281% 증가하여 1,790만 달러에 이르고 순이익은 526% 증가하여 1,080만 달러에 달했다고 발표했습니다. 회사의 성공은 주로 Go IPO 사업 덕분이며, 두 고객이 분기 중 나스닥에 성공적으로 상장했습니다. 총 이익은 1,640% 증가하여 1,440만 달러에 이르렀고 운영 비용은 230만 달러로 감소했습니다. 이 회사는 다년 계약 소프트웨어 라이센스 전환과 SaaS 제공 모델로의 CMS 플랫폼 확장을 포함한 전략적 변화를 시행했습니다. HeartCore는 일본에서 아홉 번째 연속으로 시장 점유율 1위를 유지했으며, 주당 0.02달러의 두 번째 배당금을 승인했습니다.

HeartCore Enterprises (HTCR) a annoncé des résultats financiers exceptionnels pour le troisième trimestre 2024, avec des revenus en hausse de 281% atteignant 17,9 millions de dollars et un revenu net en augmentation de 526% à 10,8 millions de dollars. Le succès de l'entreprise a été principalement entraîné par son activité Go IPO, avec deux clients ayant réussi leur introduction en bourse sur Nasdaq durant le trimestre. Le bénéfice brut a connu une augmentation remarquable de 1.640%, atteignant 14,4 millions de dollars, tandis que les charges d'exploitation ont diminué à 2,3 millions de dollars. L'entreprise a mis en œuvre des changements stratégiques, y compris la transition vers des contrats de licence logicielle pluriannuels et l'expansion de sa plate-forme CMS vers un modèle de livraison SaaS. HeartCore a maintenu sa part de marché leader au Japon pour la neuvième année consécutive et a autorisé un second versement de dividende de 0,02 dollar par action.

HeartCore Enterprises (HTCR) berichtete überragende Finanzzahlen für das dritte Quartal 2024, mit einem Umsatzanstieg von 281% auf 17,9 Millionen Dollar und einem Nettogewinn, der um 526% auf 10,8 Millionen Dollar gestiegen ist. Der Erfolg des Unternehmens wurde hauptsächlich durch das Go IPO-Geschäft angetrieben, bei dem zwei Kunden erfolgreich im Nasdaq gelistet wurden. Der Bruttogewinn verzeichnete einen bemerkenswerten Anstieg von 1.640% auf 14,4 Millionen Dollar, während die Betriebskosten auf 2,3 Millionen Dollar gesenkt wurden. Das Unternehmen hat strategische Änderungen implementiert, einschließlich des Übergangs zu mehrjährigen Softwarelizenzverträgen und der Erweiterung seiner CMS-Plattform zu einem SaaS-Liefermodell. HeartCore behielt im neunten Jahr in Folge seine führende Marktposition in Japan und genehmigte eine zweite Dividendenzahlung von 0,02 Dollar pro Aktie.

Positive
  • Revenue increased 281% to $17.9 million in Q3 2024
  • Net income grew 526% to $10.8 million ($0.53 per diluted share)
  • Gross profit surged 1,640% to $14.4 million
  • Operating expenses decreased from $2.6M to $2.3M
  • Successful listing of two Go IPO clients on Nasdaq
  • Transition to multi-year software contracts for recurring revenue
  • Maintained top market share in Japan for ninth consecutive year
  • Authorized dividend payment of $0.02 per share
Negative
  • Cash position remains relatively low at $1.2 million

Insights

HeartCore's Q3 2024 results showcase remarkable growth with revenues surging 281% to $17.9 million and net income soaring 526% to $10.8 million. The stellar performance is primarily driven by their Go IPO consulting business, where successful listings generated significant revenue from warrants and ordinary shares.

Key financial metrics demonstrate robust improvement:

  • Gross profit increased dramatically by 1,640% to $14.4 million
  • Operating expenses decreased to $2.3 million
  • EPS improved from -$0.11 to $0.53

The strategic shift to multi-year software licensing agreements and SaaS delivery model positions the company for more predictable revenue streams. While cash position remains modest at $1.2 million, the profitable operations and business model transformation suggest improved financial stability going forward.

The transformation of HeartCore's business model presents a compelling growth narrative. The Go IPO consulting service has proven to be a significant value driver, with successful client listings on Nasdaq demonstrating the platform's viability. The expansion into SaaS and multi-year contracts indicates a strategic pivot toward recurring revenue streams, reducing dependence on one-time consulting fees.

Market positioning remains strong, maintaining top market share in Japan for nine consecutive years. New partnerships with established players like Hitachi Systems and NTT Data Business Brains enhance service capabilities and market reach. The positive outlook for Japanese companies seeking U.S. IPOs suggests continued momentum in the high-margin consulting segment.

Q3 2024 Revenues Increased 281% to $17.9 Million

Q3 2024 Net Income Increased 526% to $10.8 Million

NEW YORK and TOKYO, Nov. 14, 2024 (GLOBE NEWSWIRE) -- HeartCore Enterprises, Inc. (Nasdaq: HTCR) (“HeartCore” or “the Company”), a leading enterprise software and consulting services company based in Tokyo, reported financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 and Recent Operational Highlights

  • Regained compliance with Nasdaq Listing Requirements
  • Expanded CMS platform offering into a SaaS delivery model
  • Entered into a sales collaboration with Tosho Computer Systems Co., Ltd.
  • Announced transition from annual contracts to multi-year agreements for core software business contracts
  • Partnered with NTT Data Business Brains Corporation to enhance website development service capabilities
  • Achieved top market share in Japan for nine consecutive years
  • Awarded new contract from Fourmix Co., Ltd. to implement CMS platform
  • Announced Go IPO Client, SBC Medical Group Holdings Incorporated, began trading on the Nasdaq Stock Exchange
  • Partnered with INCUDATA Corp. to enhance corporate digital marketing strategies
  • Announced Go IPO Client, BloomZ Inc., began trading on the Nasdaq Stock Exchange
  • Authorized second dividend payment of $0.02 per share
  • Partnered with Hitachi Systems, Ltd. to offer combined package of HeartCore CMS and GRED Web Security Assessment Cloud

Management Commentary
“I am pleased to announce the strongest quarter of HeartCore’s history, supported by the progress made across our Go IPO business,” said HeartCore CEO Sumitaka Kanno. “The third quarter saw two new Go IPO clients successfully listed on the Nasdaq. The warrants and ordinary shares received from these deals contributed to our highest financial results since the inception of the service, driving us into profitable operations for the quarter and year-to-date. This quarter’s results showcased the immense value of our consulting business, and with an optimistic outlook on the U.S. IPO market for Japanese companies, we anticipate closing additional deals over the next several months that will further support the growth of our Go IPO business. We continue to remain in serious discussions with prospective Go IPO clients and look forward to sharing future wins as they come.”

“We also accomplished key developments in our software business, positioning us for sustained and predictable growth in the coming quarters. First, we transitioned towards offering multi-year software licensing agreements to our customers, a move designed to generate recurring revenue streams and enhance our margin profile. Furthermore, we added a SaaS delivery model for our CMS platform designed to support our sales and marketing team to tap into a new pool of prospective customers. While Go IPO contains the prospect of significant upside, our adjustments in the software business model are intended to create more stable, durable, and long-term revenue for future quarters. We look forward to continuing driving growth across both arms of the business and carrying this momentum into 2025.”

Third Quarter 2024 Financial Results
Revenues increased 281% to $17.9 million compared to $4.7 million in the same period last year. The increase was primarily due to revenue from warrants and ordinary shares associated with the successful listing of two Go IPO consulting service clients.

Gross profit increased 1,640% to $14.4 million compared to $0.8 million in the same period last year. The increase was primarily due to the aforementioned reason above.

Operating expenses decreased to $2.3 million compared to $2.6 million in the same period last year. The improvement was primarily due to lower selling, general and administrative, and research and development expenses.

Net income increased 526% to $10.8 million or $0.53 per diluted share compared to a net loss of $2.5 million or $(0.11) per diluted share, in the same period last year.

As of September 30, 2024, the Company had cash and cash equivalents of $1.2 million compared to $1.0 million on December 31, 2023.

Nine-Months 2024 Financial Results
Revenues increased 46% to $27.0 million compared to $18.5 million in the same period last year. The increase was primarily because revenue recognized from warrants and ordinary shares associated with the successful listing of two Go IPO consulting service clients in current periods was greater than that of recognized in the nine months ended September 30, 2023.

Gross profit increased 117% to $17.3 million compared to $8.0 million in the same period last year. The increase was primarily due to the aforementioned reason above.

Operating expenses decreased to $7.3 million compared to $8.9 million in the same period last year. The decrease was primarily due to lower selling and general and administrative expenses.

Net income increased 506% to $7.1 million or $0.37 per diluted share compared to a net loss of $1.8 million or $(0.07) per diluted share, in the same period last year.

About HeartCore Enterprises, Inc.
Headquartered in Tokyo, Japan, HeartCore Enterprises is a leading enterprise software and consulting services company. HeartCore offers Software as a Service (SaaS) solutions to enterprise customers in Japan and worldwide. The Company also provides data analytics services that allow enterprise businesses to create tailored web experiences for their clients through best-in-class design. HeartCore’s customer experience management platform (CXM Platform) includes marketing, sales, service and content management systems, as well as other tools and integrations, which enable companies to enhance the customer experience and drive engagement. HeartCore also operates a digital transformation business that provides customers with robotics process automation, process mining and task mining to accelerate the digital transformation of enterprises. HeartCore’s GO IPOSM consulting services helps Japanese-based companies go public in the U.S. Additional information about the Company's products and services is available at and https://heartcore-enterprises.com/.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, or the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believed,” “intend,” “expect,” “anticipate,” “plan,” “potential,” “continue,” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks, and uncertainties are discussed in HeartCore’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond HeartCore’s control which could, and likely will materially affect actual results, and levels of activity, performance, or achievements. Any forward-looking statement reflects HeartCore’s current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to operations, results of operations, growth strategy, and liquidity. HeartCore assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The contents of any website referenced in this press release are not incorporated by reference herein.

HeartCore Investor Relations Contact:
Gateway Group, Inc.
Matt Glover and John Yi
HTCR@gateway-grp.com
(949) 574-3860

HeartCore Enterprises, Inc.
Consolidated Balance Sheets
     
  September 30, December 31,
  2024 2023
  (Unaudited)  
ASSETS
     
Current assets:    
Cash and cash equivalents$1,232,117 $1,012,479 
Accounts receivable 2,578,855  2,623,682 
Investments in marketable securities 7,349,575  642,348 
Investment in equity securities -  300,000 
Prepaid expenses 769,183  536,865 
Current portion of long-term note receivable 100,000  100,000 
Due from related party 43,852  44,758 
Other current assets 177,381  234,761 
Total current assets 12,250,963  5,494,893 
     
Non-current assets:    
Accounts receivable, non-current 766,972  - 
Property and equipment, net 663,447  763,730 
Operating lease right-of-use assets 2,184,344  2,467,889 
Intangible asset, net 4,037,500  4,515,625 
Goodwill 3,276,441  3,276,441 
Long-term investment in SAFE 350,000  - 
Long-term investment in equity securities 300,000  - 
Long-term investment in warrants 551,787  2,004,308 
Long-term note receivable 200,000  200,000 
Deferred tax assets 392,617  369,436 
Security deposits 336,117  348,428 
Long-term loan receivable from related party 146,354  182,946 
Other non-current assets 15,812  71 
Total non-current assets 13,221,391  14,128,874 
     
Total assets$25,472,354 $19,623,767 
     
LIABILITIES AND SHAREHOLDERS' EQUITY
     
Current liabilities:    
Accounts payable and accrued expenses$1,779,799 $1,757,038 
Accounts payable and accrued expenses - related party 28,772  - 
Accrued payroll and other employee costs 633,514  723,305 
Due to related party 1,438  1,476 
Short-term debt -  135,937 
Current portion of long-term debts 462,121  371,783 
Insurance premium financing 65,392  - 
Factoring liability 305,472  562,767 
Operating lease liabilities, current 382,594  396,535 
Finance lease liabilities, current 17,375  17,445 
Income tax payables 170,453  162,689 
Deferred revenue 1,927,582  2,166,175 
Other current liabilities 756,766  216,405 
Total current liabilities 6,531,278  6,511,555 
  -   
Non-current liabilities:    
Long-term debts 1,382,048  1,770,352 
Operating lease liabilities, non-current 1,859,948  2,135,160 
Finance lease liabilities, non-current 52,005  66,779 
Deferred tax liabilities 1,130,500  1,264,375 
Other non-current liabilities 200,818  208,732 
Total non-current liabilities 4,625,319  5,445,398 
     
Total liabilities 11,156,597  11,956,953 
     
Shareholders' equity:    
Preferred shares ($0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023) -  - 
Common shares ($0.0001 par value, 200,000,000 shares authorized; 20,864,144 and 20,842,690 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively) 2,085  2,083 
Additional paid-in capital 18,997,059  19,594,801 
Accumulated deficit (6,990,113) (14,763,469)
Accumulated other comprehensive income 392,397  331,881 
Total HeartCore Enterprises, Inc. shareholders' equity 12,401,428  5,165,296 
Non-controlling interests 1,914,329  2,501,518 
Total shareholders' equity 14,315,757  7,666,814 
     
Total liabilities and shareholders' equity$25,472,354 $19,623,767 



HeartCore Enterprises, Inc.
Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)
            
            
  For the nine months ended September 30,   For the three months ended September 30,
  2024  2023  2024  2023
            
Revenues$26,963,531  $18,518,431  $17,850,411  $4,688,908 
Cost of revenues 9,708,074   10,548,245   3,433,024   3,860,241 
Gross profit 17,255,457   7,970,186   14,417,387   828,667 
            
Operating expenses:           
Selling expenses 642,225   1,330,747   243,110   274,043 
General and administrative expenses 6,395,429   7,305,392   1,966,717   2,172,298 
Research and development expenses 307,931   289,303   107,529   170,071 
Total operating expenses 7,345,585   8,925,442   2,317,356   2,616,412 
            
Income (loss) from operations 9,909,872   (955,256)  12,100,031   (1,787,745)
            
Other income (expenses):           
Changes in fair value of investments in marketable securities (308,059)  (500,762)  122,272   (271,740)
Changes in fair value of investment in warrants 1,631,700   (294,565)  2,869,407   (460,672)
Loss on sale of warrants (3,970,628)  -   (3,970,628)  - 
Interest income 15,557   64,633   10,933   14,363 
Interest expenses (105,094)  (125,073)  (31,393)  (42,619)
Other income 158,914   176,641   24,040   52,640 
Other expenses (131,507)  (62,701)  (82,457)  (25,947)
Total other expenses (2,709,117)  (741,827)  (1,057,826)  (733,975)
            
Income (loss) before income tax provision 7,200,755   (1,697,083)  11,042,205   (2,521,720)
            
Income tax expense 72,945   58,859   225,275   19,413 
            
Net income (loss) 7,127,810   (1,755,942)  10,816,930   (2,541,133)
Less: net loss attributable to non-controlling interests (645,546)  (419,211)  (240,876)  (233,913)
Net income (loss) attributable to HeartCore Enterprises, Inc.$7,773,356  $(1,336,731) $11,057,806  $(2,307,220)
            
Other comprehensive income (loss):           
Foreign currency translation adjustment 51,678   (85,244)  65,503   (90,743)
            
Total comprehensive income (loss) 7,179,488   (1,841,186)  10,882,433   (2,631,876)
Less: comprehensive loss attributable to non-controlling interests (654,384)  (422,352)  (241,913)  (235,094)
Comprehensive income (loss) attributable to HeartCore Enterprises, Inc.$7,833,872  $(1,418,834) $11,124,346  $(2,396,782)
            
Net income (loss) per common share attributable to HeartCore Enterprises, Inc.         
Basic$0.37  $(0.07) $0.53  $(0.11)
Diluted$0.37  $(0.07) $0.53  $(0.11)
            
Weighted average common shares outstanding           
Basic 20,861,012   20,257,020   20,864,144   20,842,690 
Diluted 20,861,012   20,257,020   20,864,144   20,842,690 



     
HeartCore Enterprises, Inc.
Unaudited Consolidated Statements of Cash Flows
     
  For the nine months ended September 30,
  2024 2023
     
Cash flows from operating activities    
Net income (loss)$7,127,810 $(1,755,942)
Adjustments to reconcile net income (loss) to net cash flows    
used in operating activities:    
Depreciation and amortization expenses 561,659  495,200 
Loss (gain) on disposal of property and equipment 1,894  (4,737)
Amortization of debt issuance costs 3,791  2,257 
Non-cash lease expense 272,208  254,876 
Loss (gain) on termination of lease (469) 76 
Deferred income taxes (163,199) (109,690)
Stock-based compensation 236,826  1,267,699 
Marketable securities received as noncash consideration (572,010) - 
Warrants received as noncash consideration (12,969,683) (4,009,335)
Changes in fair value of investments in marketable securities 308,059  500,762 
Changes in fair value of investment in warrants (1,631,700) 294,565 
Loss on sale of warrants 3,970,628  - 
Changes in assets and liabilities:    
Accounts receivable (685,531) (322,583)
Prepaid expenses (72,315) 187,269 
Other assets 40,761  (23,982)
Accounts payable and accrued expenses 34,752  597,247 
Accounts payable and accrued expenses - related party 28,315  - 
Accrued payroll and other employee costs (68,323) 7,471 
Due to related party (7) 7,562 
Operating lease liabilities (275,850) (231,499)
Income tax payables 17,971  101,058 
Deferred revenue (205,109) 200,256 
Other liabilities 540,008  83,809 
Net cash flows used in operating activities (3,499,514) (2,457,661)
     
Cash flows from investing activities    
Purchases of property and equipment (4,134) (516,658)
Proceeds from disposal of property and equipment -  24,935 
Advance on note receivable -  (600,000)
Purchase of long-term investment in SAFE (350,000) - 
Net proceeds from sale of warrants 5,640,000  - 
Repayment of loan provided to related party 31,457  34,823 
Payment for acquisition of subsidiary, net of cash acquired -  (724,910)
Net cash flows provided by (used in) investing activities 5,317,323  (1,781,810)
     
Cash flows from financing activities    
Payments for finance leases (12,568) (16,537)
Proceeds from short-term and long-term debts 68,138  219,427 
Repayment of short-term and long-term debts (453,048) (584,779)
Repayment of insurance premium financing (107,297) (266,756)
Net proceeds from factoring arrangement -  217,250 
Net repayment of factoring arrangement (257,295) - 
Payments for debt issuance costs -  (656)
Distribution of dividends (834,566) - 
Capital contribution from non-controlling shareholder 67,195  - 
Net cash flows used in financing activities (1,529,441) (432,051)
     
Effect of exchange rate changes (68,730) (306,239)
     
Net change in cash and cash equivalents 219,638  (4,977,761)
     
Cash and cash equivalents - beginning of the period 1,012,479  7,177,326 
     
Cash and cash equivalents - end of the period$1,232,117 $2,199,565 
     
Supplemental cash flow disclosures:    
Interest paid$104,880 $59,290 
Income taxes paid$201,035 $91,657 
     
Non-cash investing and financing transactions    
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$125,735 $317,040 
Finance lease right-of-use assets obtained in exchange for finance lease liabilities$- $93,117 
Remeasurement of operating lease liabilities and right-of-use assets due to lease modification$- $12,579 
Insurance premium financing$172,689 $389,035 
Liabilities assumed in connection with purchase of property and equipment$- $9,602 
Common shares issued for acquisition of subsidiary$- $3,150,000 
Warrants converted to marketable securities$6,443,276 $1,257,868 
     

FAQ

What was HeartCore's (HTCR) revenue growth in Q3 2024?

HeartCore's revenue grew 281% to $17.9 million in Q3 2024 compared to $4.7 million in the same period last year.

How much net income did HeartCore (HTCR) report in Q3 2024?

HeartCore reported net income of $10.8 million or $0.53 per diluted share in Q3 2024, a 526% increase from the previous year.

What drove HeartCore's (HTCR) financial performance in Q3 2024?

The strong performance was primarily driven by revenue from warrants and ordinary shares associated with the successful listing of two Go IPO consulting service clients on Nasdaq.

What strategic changes did HeartCore (HTCR) implement in Q3 2024?

HeartCore transitioned to multi-year software licensing agreements and expanded its CMS platform to a SaaS delivery model to generate more stable recurring revenue.

Heartcore Enterprises, Inc.

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