WeTouch Announces First Quarter Fiscal Year 2024 Financial Results with Cash Reserves of $94.8 Million
WeTouch Technology (NASDAQ: WETH) reported its first-quarter fiscal year 2024 results, showing a revenue increase of 11.2% to $14.9 million compared to $13.4 million in 1Q 2023. Overseas market revenue rose by 34.1% to $5.5 million. Cash reserves remained robust at $94.8 million. Total shipment volume increased by 7.3% to 681,370 units. Despite the revenue growth, net income dropped to $0.6 million, or $0.04 per diluted share, from $2.8 million, or $0.35 per diluted share, due to higher sales costs and increased shares outstanding. Gross margin decreased significantly to $3.3 million, or 22.4% of sales, down from $6.0 million, or 45.0% of sales. However, operating expenses reduced by 41.1% to $1.0 million. Shareholders' equity grew to $120.5 million.
- Revenue rose by 11.2% to $14.9 million compared to $13.4 million in 1Q 2023.
- Overseas market revenue increased by 34.1% to $5.5 million.
- Total shipment volume grew by 7.3% to 681,370 units.
- Cash reserves remained high at $94.8 million.
- Operating expenses decreased by 41.1% to $1.0 million.
- Shareholders' equity increased to $120.5 million.
- Net income decreased to $0.6 million, or $0.04 per diluted share, from $2.8 million, or $0.35 per diluted share.
- Gross margin fell by 45.0% to $3.3 million, or 22.4% of sales, from $6.0 million, or 45.0% of sales.
- The decline in net income was attributed to higher sales costs and increased shares outstanding.
Insights
WeTouch's first quarter financial results reveal a mixed performance. The 11.2% increase in revenue to
Additionally, the 34.1% growth in overseas market revenue is promising, reflecting robust international demand for WeTouch's products. The decrease in operating expenses by 41.1% due to reduced professional fees is a positive sign of cost management. However, the increase in outstanding shares dilutes earnings, evident from the drop in earnings per share. Overall, the financial picture is complex, with both positive revenue growth and concerning profitability metrics.
The reported increase in sales volume and average selling price for industrial control, automotive and gaming touchscreens suggests that WeTouch is successfully capitalizing on the higher-end segments of the touch display market. The demand for advanced touchscreens in various industries indicates a shift towards more sophisticated user interfaces and better quality components, reflecting a trend in technological advancements.
However, the impact of U.S. export controls on advanced computing and semiconductor manufacturing to China is a significant challenge. WeTouch's expectation that procurement costs will stabilize post-second quarter as suppliers increase production volumes is a critical point to watch. This stabilization could mitigate the cost pressures currently affecting gross margins and net income, potentially improving financial performance in the upcoming quarters.
Investors should monitor the technological innovation and supply chain strategies closely, as these will be key determinants of WeTouch's ability to sustain growth and profitability in a competitive and regulation-constrained environment.
The positive trend in overseas market revenue, particularly with a 34.1% increase, indicates that WeTouch is expanding its international footprint effectively. This growth is complemented by a 12.9% increase in sales volume and an 18.1% rise in average selling prices for specific product segments. This suggests that WeTouch's products are well-received in the international markets, possibly due to superior quality and technological advantage.
However, the decrease in net income and gross margin signals that the company is facing significant cost challenges. The seasonal short-term increase in labor and material costs has heavily impacted profitability, a factor that potential investors should consider. The reduction in operating expenses by 41.1% is a positive development, indicating effective cost-cutting measures that could help in maintaining financial health amidst rising costs.
It's also worth noting the increase in shareholders' equity to
First Quarter Fiscal Year 2024 Revenue Reaches
"We achieved higher revenue in the first quarter of fiscal 2024 by aggressively promoting our high-end products. Although our cost of goods sold increased due to the export controls imposed by the
First Half Fiscal Year 2024 Financial Highlights
- Cash Reserves: The company's cash reserves remain high at
- Total Revenue: Increased
- Overseas Market Revenue: Reached
- Total Volume Shipped: Increased
- Net Income: Decreased to
- Gross Margin: Decreased
- Operating Expenses: Decreased
- Shareholders' Equity: Increased to
About WeTouch Technology Inc.
Wetouch Technology Inc. is at the forefront of providing premium touch display solutions, dedicated to reshaping human-machine interaction across diverse industries. With a relentless focus on innovation and customer satisfaction, Wetouch consistently delivers cutting-edge technology and unparalleled performance in touch display solutions globally.
For additional information, please visit: WeTouch Technology Inc.at http://en.usa-wetouch.com/
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and as defined in the
Investor and Media Contact:
Horizon Research Management Consultancy
Michael Wei,
Email: hwey@horizonconsultancy.co
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SOURCE Wetouch Technology Inc.
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